KATHMANDU, May 4: IFC has said that it was partnering with the Nepal Rastra Bank (NRB) to promote sustainable and inclusive finance.
The commercial lending arm of the World Bank Group has said that it would help the central bank to adopt improved environmental and social risk management practices for strengthening its portfolio performance, generating business opportunities and boosting competitiveness in the region.
Improved risk management practices will help minimize potential risks for financial institutions and will create increased access to finance for businesses with strong environment and social performance, IFC said in a statement issued after the conclusion of a workshop in Kathmandu on Thursday. “IFC will assist the NRB in adopting a robust Environmental and Social Risk Management Guideline and promoting its adoption by financial institutions in Nepal,” the statement added.
At the workshop, senior representatives from government, the financial sector, and international organizations shared information, propose ideas, and build a consensus on how Nepal's financial sector can better identify, manage and mitigate risks.
Speaking at the workshop, Shiva Raj Shrestha, a deputy governor of the NRB, said: “We want to help financial institutions effectively manage environmental and social risks associated with the projects they finance and increase support to businesses that are greener, climate friendly, and socially inclusive.”
As a member of IFC's Sustainable Banking Network (SBN), the NRB also benefits from the experience and knowledge of other members. The SBN works with associations and regulators to level the playing field for banks and encourage green investment. So far, 15 SBN member countries have launched sustainable finance policies, guidelines and roadmaps.
“Financial institutions can strengthen their portfolio by better assessing risks during loan or investment appraisal, when considering projects,” IFC Nepal's Resident Representative Rehan Rashid said.