The International Finance Corporation (IFC) is providing a US$2 million facility to the Bank of Kathmandu in Nepal as part of its substantially letter of credit (L/C)-based Global Trade Finance Programme (GTFP).

The IFC's SouthAsia Enterprise Development Facility (SEDF) meanwhile will help the bank tailor a programme for institutional capacity building that will help enhance the bank's services to its small- and medium-sized enterprise (SME) clients.

Global network

The GTFP supports trade with emerging markets worldwide and promotes the flow of goods and services between developing countries, with IFC providing partial or full guarantees against underlying trade instruments and covering the payment risk of participating issuing banks.

Trade-related instruments issued by Bank of Kathmandu, including L/Cs and bank guarantees, will now be confirmed by a large number of confirming banks worldwide because of IFC's guarantee.

More benefits

The GTFP also allows issuing banks to increase the volume and value of trade transactions, with enhanced tenors and access to competitive pricing terms.

Established in 1993, the Bank of Kathmandu has 14 branches and four service centres located across Nepal and is involved in all types of commercial banking activities in Nepal.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.