Rastriya Banijya Bank Launches Vital SME Credit Security Program to Empower Local Businesses

25th May 2026, Kathmandu

Rastriya Banijya Bank Limited has launched a highly progressive financial initiative named the Portfolio Protection Scheme for Contribution-Based Loans 2082. This groundbreaking credit protection plan has been established through a strategic partnership with the Deposit and Credit Guarantee Fund Nepal. The primary purpose of this collaborative framework is to provide a robust security net for financial investments directed toward small and medium-sized enterprises operating within regional economies. By mitigating credit risks for lenders and expanding borrowing capacities for local entrepreneurs, this scheme marks a major turning point for business financing structures across the country.

RBB SME Loan Scheme

The innovative program has been introduced to encourage substantial investment in localized small and medium-sized businesses. It is being executed under the umbrella of the Udaya Project, an initiative that receives joint financial backing and administrative resources from the Swiss Agency for Development and Cooperation alongside the Koshi Province Government. Through this multi-organizational alliance, the financial sector aims to bridge the historical gap between available credit and deserving local entrepreneurs who often struggle with strict collateral demands or high risk assessments.

Securing Business Investments in Koshi Province

Under the newly deployed guidelines of this program, commercial loans extended to qualified small and medium-sized enterprises operating within Koshi Province will receive formalized credit protection. This risk-reduction mechanism is operated directly through the Koshi Province Small and Medium Entrepreneur Credit Protection Fund. The dedicated fund itself was brought to fruition through extensive structural cooperation between the Ministry of Economic Affairs and Planning of Koshi Province and the Deposit and Credit Guarantee Fund.

By insuring loan portfolios against default risks, the credit protection fund ensures that commercial banks can confidently extend capital to emerging enterprises. This localized focus helps address regional economic imbalances by ensuring that provincial entrepreneurs receive the exact financial backup necessary to scale their operations, hire local workers, and boost production capacity.

Key Features of the SME Credit Financing Structure

The credit product designed for this initiative offers highly flexible financing limits tailored to meet the varying scales of small and medium business operations. Entrepreneurs can access substantial financial packages designed to fund working capital or capital expenditures.

• Minimum Available Financing: NPR 3 million
• Maximum Available Financing: NPR 30 million
• Targeted Commercial Sectors: Agriculture, Manufacturing Industry, and the Service Sector
• Financial Conditions: Minimum interest rates and optimized processing fees applied in accordance with prevailing banking policies

By covering vital sectors like agriculture and manufacturing, the credit facility targets the structural pillars of the provincial economy. The inclusion of minimized interest rates and low processing overheads ensures that borrowing businesses can maintain healthy cash flows without being weighed down by massive debt-servicing obligations during their early growth phases.

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The Financial Strength of Rastriya Banijya Bank

Established on Magh 10, 2022 B.S., Rastriya Banijya Bank has consistently evolved to become one of the most prominent, trusted, and expansive banking institutions operating in the nation. Over decades of service, the state-backed commercial bank has prioritized financial inclusion by taking modern banking services out of urban centers and into the most remote corners of the country.

The bank currently manages an extensive institutional footprint consisting of 314 fully equipped branch offices, 71 strategic extension counters, 334 functional ATMs, and 99 branchless banking service units. This vast operational distribution spans across all 77 district headquarters, ensuring that even remote rural communities have access to structured financial tools. Through this expansive network, the institution proudly serves a massive customer base exceeding 4.7 million nationwide customers.

Strategic Economic Impacts of Credit Portfolio Insurance

The introduction of portfolio insurance for enterprise development loans addresses a fundamental challenge within the Nepalese financial sector. Traditionally, commercial lenders have maintained a highly conservative approach toward small business lending due to perceived high default risks and volatile market conditions. By stepping in to guarantee these portfolios, the Deposit and Credit Guarantee Fund absorbs a significant portion of the risk burden.

This risk-sharing model fundamentally alters the credit landscape. It gives branch managers across Koshi Province the confidence to approve larger loan amounts for viable business concepts, even if those businesses lack extensive physical collateral. Consequently, local markets experience a surge in liquidity, enabling small agro-processing units, local factories, and modern service providers to expand their market reach.

Driving Long Term Entrepreneurial Success

Beyond immediate credit availability, the partnership between the Swiss Agency for Development and Cooperation, provincial ministries, and the commercial banking sector introduces a sustainable model for public-private economic development. When local businesses have reliable access to financing ranging up to NPR 30 million, they can transition from survival-oriented operations into competitive, growth-driven enterprises.

This transition is critical for generating sustainable employment opportunities within Koshi Province, reducing the need for youth migration, and strengthening local supply chains. Aspiring entrepreneurs, existing business owners, and cooperative societies involved in production fields are encouraged to leverage this protected credit pathway to upgrade infrastructure, procure advanced machinery, or expand commercial distribution networks. To learn more about specific application steps, necessary documents, and localized criteria, interested business operators should visit their nearest branch office or get in touch with the central management team directly.

For More: RBB SME Loan Scheme