Kathmandu, Nepal, 2026 – British International Investment (BII), the UK’s development finance institution and impact investor, and Laxmi Sunrise Bank Limited (LSL) have signed a $25 million credit facility agreement, aimed at strengthening access to finance for Micro, Small and Medium-sized Enterprises (MSMEs), with a focus on women businesses in Nepal.

MSMEs contribute 22 per cent of the country’s GDP and employ nearly 2 million people. Yet only 16 per cent have access to financing through formal channels due to limited reach of financial institutions and a mismatch between MSME needs and lender requirements, according to the World Bank and Nepal Rastra Bank data.

Through this investment, Laxmi Sunrise Bank will expand lending to MSMEs over the deployment period, with 30 per cent of the facility expected to support women-led MSMEs. By channeling long-term capital to underserved businesses, the partnership is expected to support jobs, entrepreneurship and more inclusive private sector growth across the country.

The bank has qualified for the 2X Challenge, a global initiative to advance women’s economic empowerment, of which BII is a founding member. The qualification recognizes the bank’s commitment to gender-smart financing practices, with demonstrated progress across governance, leadership, employment, and portfolio inclusion. BII’s technical assistance programme, Invest for Impact Nepal (IIN), has also supported the bank in strengthening its approach to serving women-owned and women-led businesses.

LSL has also committed to strengthening its Environmental and Social Management System (ESMS), aligned with its broader sustainability agenda and responsible banking practices. This will further strengthen the bank’s environmental and social risk management framework and support its sustainable financing initiatives.

Seema Malhotra, UK’s Minister for the Indo-Pacific and Minister for Equalities, said: “The UK has been a long-term partner to Nepal, backing its journey towards a more resilient, inclusive and prosperous economy. It is encouraging to see British International Investment supporting Laxmi Sunrise Bank to expand finance for MSMEs, particularly women-owned businesses. This partnership reflects our shared ambition to unlock economic opportunity, back women entrepreneurs and support sustainable growth.”

Srini Nagarajan, Managing Director and Head of Asia, BII, commented: “At British International Investment, we focus where we can deliver the greatest impact, and Nepal is an important part of our frontier markets approach. Through this, at least 25 per cent of our new investments will be in UN-defined least developed countries. By partnering with Laxmi Sunrise Bank, we are backing a leading financial institution with the reach and ambition to support underserved businesses across Nepal, where getting access to financing is challenging but critical for the private sector to grow.”
Sumed Bhattarai, Officiating Chief Executive Officer, Laxmi Sunrise Bank, added: “This partnership with British International Investment marks a significant milestone in our journey toward more inclusive and sustainable banking. MSMEs are the backbone of Nepal’s economy, yet far too many – particularly women-led businesses – remain underserved by formal financial institutions. This $25 million facility empowers us to bridge that gap meaningfully.

 

Our qualification for the 2X Challenge further reflects our commitment to gender-smart finance, and we look forward to working alongside BII to create lasting economic opportunities for entrepreneurs and communities across Nepal.”