Koshi Province SME Loan Guarantee Funds: Udaya Project Launch, Nepal Business Growth
25th March 2025, Kathmandu
On Monday, the Koshi Province Government launched two new funds to support small and medium enterprises (SMEs): the Udaya Guarantee Fund and the Udaya Challenge Fund. These funds will provide loan guarantees, making it easier for SMEs to access financing.
Koshi Province SME Loan Guarantee Funds
The initiative aims to foster the growth of local businesses by addressing their financial challenges, enabling them to expand and contribute to the province’s economic development. This move is a significant step toward supporting entrepreneurship in the region.
Key Leaders Inaugurate Funds
Minister for Industry, Commerce, and Supplies Damodar Bhandari, Koshi Province Economic Affairs Minister Ram Bahadur Magar, and Swiss Ambassador Danielle Meuwly attended the launch event in Kathmandu.
SMEs Critical for the Economy
Minister Bhandari stressed the importance of SMEs for Nepal’s economy. He said many SMEs struggle due to a lack of collateral. “This initiative will help them secure loans and grow,” he added.
Minister Magar called the funds a major step forward. “They will create jobs and attract investment to Koshi Province,” he said.
Swiss Support for Sustainable Growth
Ambassador Meuwly praised the province’s efforts. She said Switzerland has long supported Nepal’s development. “These funds will help shift Nepal from aid-based to trade-based growth,” she explained.
How the Funds Work
The Provincial Credit Guarantee Fund has a budget of NPR 600 million.
The Koshi Province Government and Swiss Development Cooperation each fund 50%.
Banks will receive partial guarantees, reducing risks when lending to SMEs.
Over 3,000 SMEs could benefit.
Part of the Udaya Project
The funds fall under the Udaya Project, a Nepal-Swiss partnership started in November 2023. The project runs until 2027 and focuses on:
Business training for SMEs.
Financial and technical support.
Reducing risks for lenders.
A digital portal for SME resources.
The total budget is NPR 1.149 billion, with 62% from Switzerland and 38% from Koshi Province.
A Model for Nepal
Ramesh Ghimire, CEO of the Deposit and Credit Guarantee Fund, said this approach could expand nationwide. “It makes SME lending safer for banks,” he noted.
Expected Benefits
The funds aim to:
Increase SME access to loans.
Boost business growth and innovation.
Strengthen Koshi Province’s economy.
This initiative marks a major effort to empower SMEs, create jobs, and drive sustainable economic growth in Nepal.
For more: Koshi Province SME Loan Guarantee Funds
