IFC ramps up impact investments in South Asia to protect jobs and livelihoods, drive green recovery

 In a bid to protect the most vulnerable people and help companies maintain operations and jobs, IFC's focused and sustained investments in South Asia continued to have strong impact in the fiscal year 2021, with support for medical facilities, vaccines and supplies, and to hard-hit micro, small, and medium enterprises (MSMEs) while also spurring investments in renewable energy, affordable housing, and distressed assets resolution.

In the midst of a difficult year with massive and ongoing social and economic disruptions caused by Covid-19, IFC committed over $3.8 billion, including mobilisation and short-term finance, in South Asia as of June 2021 — resulting in a record investment volume of over $14.9 billion in the last five years in the region, towards a green, inclusive, and resilient recovery.

In India, IFC’s largest client country globally, total commitments at the end of June stood at $1.7 billion representing an increase of over 51 per cent from last year, according to a press note issued by the IFC today. "Likewise, in Bangladesh, IFC made total commitments of $791 million, an increase of almost 33 per cent from last year."

"The Covid-19 crisis has drastically impacted the region’s private sector, which has severely affected the region’s most vulnerable people," IFC's vice president for Asia and the Pacific region Alfonso Garcia Mora said, adding that Covid-19 has laid bare the region’s existing vulnerabilities in the financial sector, disrupting businesses -- particularly micro, small, and medium enterprises -- and leaving so many people exposed. "That’s why we’ve focused our attention on supporting moves to improve resilience on multiple fronts, as all indications are that the road to recovery will be long."

IFC has committed $590 million in Covid-response deals in South Asia -- with additional deals worth over $100 million in the pipeline. IFC’s fast-track financial support has helped clients across sectors at a time when the economic fallouts of the pandemic have severely impacted market sentiment. Further, IFC committed $353 million in climate finance and $490 million in IDA/FCS (International Development Association/Fragile and Conflict-Affected Situations) countries in the region.

IFC already provided financing and advisory support for the production of critical pharmaceutical products and medical equipment such as personal protective equipment (PPE) and vaccines, the press note reads, adding that IFC will further focus on providing much needed liquidity to private sector companies in the region so they can maintain operations, preserve, and create jobs.

"The impact of the pandemic coupled with the region’s vulnerability to climate change, has highlighted the need for a collaborative, resilient and climate friendly recovery that can withstand future shocks,” IFC’s new regional director for South Asia Hector Gomez Ang said, adding that it is especially important for South Asia, which is home to three of the top five countries in terms of vulnerability to climate change globally.

While South Asia is one of the fastest growing regions in the world, estimates suggest that climate impacts could reduce its annual gross domestic product by an average of 1.8 per cent by 2050, rising to 8.8 per cent by 2100, if the countries fail to take adequate measures. The region is also estimated to have an untapped climate investment potential of $3.4 trillion by 2030.

Under the World Bank Group’s Climate Change Action Plan (2021-2025), IFC has committed to aligning all new real sector operations with the objectives of the Paris Agreement by July 1, 2025 and set the target of reaching 35 per cent financing for climate on average over the next five years. In addition, IFC will intensify its effort to create bankable investment opportunities and to mobilize private financing towards decarbonising five key sectors as outlined in the CCAP.

One to Watch, NMB Bank, Laxmi Bank, and SDC join forces to support MSMEs

 One to Watch, with support from the Swiss Agency for Development and Cooperation (SDC), and in partnership with NMB Bank and Laxmi Bank, has announced the launch of Covid-19 Micro, Small and Medium Enterprises (MSME) Fund Nepal.

The fund seeks to support MSMEs that are struggling to cope with the challenges brought forth by Covid-19. It will do so by providing them with bridge financing in order to meet the working capital needs and technical assistance in the form of business development services to be able to retain employees, preserve business continuity, and build resilience. The fund is expected to support up to 100 MSMEs continue their businesses and help them retain up to 1000 jobs, according to a press note issued by the One to watch.

The fund will provide collateral-free loans to MSMEs that are evaluated to have the potential to bounce back based on a pre-determined set of criteria. It will pay interest on such loans for a period of up to 18 months. Additionally, a subset of such firms will also be provided with business development support that are tailored to meet the needs of beneficiary enterprises, it claimed.

“In unprecedented times like these, the Fund will leverage One to Watch’s expertise in investment and business development, its robust network of investors and entrepreneurs to identify and support high-impact SMEs,” managing partner of One to Watch Suman Joshi said, hoping that the initiative will be a ‘pilot’ that can be scaled with participation from more bank partners.

“Micro, Small and Medium Enterprises are the backbone of Nepal’s economy,” ambassador of Switzerland to Nepal Elisabeth von Capeller said, adding that the MSMEs employ a large share of the workforce and are drivers of innovation and new job creation. “Their rebound, therefore, will set the foundation for overall economic recovery.”

As a long standing development partner of Nepal, SDC is proud to be able to support this initiative together with private sector partners, she added.

“As a Retail and MSE focused bank, we are hopeful this collaboration will directly benefit credit-worthy smaller entrepreneurs, who require access to bank loans in order to sustain their businesses and livelihoods during an economy under stress,” Laxmi Bank chief executive officer Ajaya Bikram Shah said, adding that the MSMEs need special attention and support at this point in time and this sector will play a key role in helping the economy revive and regain momentum over the medium and long term.

“NMB Bank is focused on sustainable banking and MSMEs are key drivers for sustainable growth of the economy,” chief executive officer of NMB Bank Sunil KC said, adding that businesses across a range of economic sectors, especially MSMEs, are the most vulnerable and facing losses. “To support their revival plan, NMB, as a partner bank, is committed to providing collateral-free loans to those highly impacted by the current crisis.”

MSMEs and farmers benefit from more than half a billion dollars in Covid-19 support in Asia-Pacific Region

 Thousands of micro, small, and medium enterprises (MSMEs), and millions of farmers across Asia and the Pacific stand to benefit from the first phase of Covid-19 crisis response funding from IFC, a member of the World Bank Group.

As the pandemic continues to send shockwaves through the global economy, IFC supported 13 companies in the region – over 190,000 employees in the manufacturing, agriculture, services and energy sectors – with $554 million in Covid-19 related funding in the fiscal year ending June 30. Also, IFC deployed $492 million in Covid-19 related trade finance lines in the region. This has helped financial institutions provide liquidity to businesses dependent on trade, especially small and medium enterprises (SMEs).

About 17,500 MSMEs and corporates in the region are also expected to be among the beneficiaries of IFC’s $2 billion Working Capital Solutions (WCS) programme in the fiscal year 2020. The aim of the programme is to help emerging-market banks extend credit so that businesses can continue to operate, stemming job losses. IFC’s first Covid-19 WCS programme in Asia-Pacific was signed in Sri Lanka with the Commercial Bank of Ceylon to help over 1,200 SMEs – nearly 790 of them women led – deal with the crisis. 

“The economic and social impact of Covid-19 will continue to exact a toll on people and businesses, leaving an indelible mark on the region’s economies and private sector” said IFC’s newly appointed regional vice president for Asia and the Pacific Alfonso Garcia Mora. “To address this, we are stepping up efforts to support companies strengthening also our support to the financial sector so that businesses and firms can build resilience on the road to recovery,” he added.

The WCS programme is part of IFC’s $8 billion global Covid-19 fast-track financing facility developed to help businesses cope with the ongoing global slowdown, marked by a collapse in tourism, plunging trade, disruptions to supply chains, and diminished foreign direct investment.

As an early rapid response when Covid-19 first began impacting Asia, IFC expanded trade financing limits for four banks in Vietnam by $294 million to address, in advance, potential trade finance challenges. The move resulted in over 330 export and import transactions by local SMEs valued at over $200 million. 

Since the outbreak, IFC has made efforts to help both small and large businesses in Bangladesh, Pakistan, Sri Lanka, India, and Vietnam. The support to companies focused on agriculture – between 15,000 and five million farmers and SMEs in their supply chain networks – will help boost farmers’ incomes, strengthening agribusiness and contributing to food security.

IFC is now working on the second phase of its Covid-19 response to help financial institutions and companies in the region on their path to recovery, Garcia Mora, who is a Spanish national. Mora has moved to IFC after eight years with the World Bank. Before that, he worked in the private sector for over 12 years, including as Partner-Managing Director at Analistas Financieros Internacionales Consulting Group.

“As part of our bid to advance workable development solutions to the challenges posed by COVID-19, IFC will also step up its engagement with the World Bank in the Asia-Pacific region,” he said, adding that the IFC will focus on its strategy to create markets by working upstream, tackling barriers to spurring the private sector and creating jobs. “This approach is critical to attract investors in the most vulnerable markets.”

The fiscal year 2020 also saw IFC work upstream and with the World Bank on complex projects with potentially transformative impact to deliver power to millions of people in Afghanistan, Nepal, and Pakistan. IFC also advised governments and the private sector in a range of areas from green sustainable finance and gender issues to helping companies and institutions through webinars to cope with Covid-19 impacts.

Overall, IFC committed $6.7 billion in private sector investments in Asia and the Pacific in the fiscal year ending June 30. This includes the $554 million in IFC financing in response to Covid-19 under the new Covid-19 fast-track facility. Just under half of this was for countries classified as poor and fragile and conflict affected. In addition, IFC supported around $ 1.1 billion of cross-border trade in the region through its Global Trade Finance Programme (GTFP). 

Some other examples of IFC’s support in the fiscal year 2020 in Nepal includes the Upper Trishuli-1 (UT-1) project, a 216 MW run-of-river hydropower project, one of the largest foreign direct investments in Nepal’s history, set to deliver improved power to millions of people.

CDC Group, WorldLink ink investment deal

The UK’s development finance institution CDC Group today announced its investment of Rs 1.35 billion (approximately $12 million) in the private sector internet service provider WorldLink.
The investment is expected to facilitate WorldLink in aggressively expanding its internet network throughout the nation reaching out to the most marginalised areas, according to a press note issued by the company. “CDC Group has made the investment in WorldLink as equity, securing 10 per cent share in the company.”
This marks CDC’s first equity investment in Nepal but also second investment in the country this year. Earlier, CDC Group has injected a three-year loan of $15 million in NMB Bank.
“The investment will help fund WorldLink’s ambitious expansion throughout Nepal, reaching further remote territories and connecting hundreds of thousands of households and small enterprises to the internet,” confirmed the WorldLink that has grown into the country’s largest internet service provider, laying over 8000-km of fibre and reaching some of the most remote places like Chhatrakot Rural Municipality and Ruru Rural Municipality.
CDC’s capital will accelerate its expansion, helping WorldLink to provide even more small businesses and families with a reliable internet source. WorldLink – as claimed by itself – is already a large employer, particularly of young people, with nearly 3000 employees. “CDC’s investment will support the hiring of over 1,000 additional employees,” the WorldLink, said, adding that CDC will also help develop a skills and training programme for all staff and progress health and safety standards.
“We firmly believe in the power of connectivity to help bring communities out of poverty,” managing director and head of Asia at CDC Srini Nagarajan said, adding that advancing the internet to MSMEs across Nepal gives them access to global trade and markets. “It also brings families into contact in Nepal and overseas.”
CDC’s capital will help accelerate this, helping it reach further remote regions.
“We are delighted to be creating long term partnerships in a country where our capital will make a meaningful difference to people’s lives,” he added.
“We feel honoured to be the first CDC equity investment in Nepal,” managing director of WorldLink Dileep Agrawal. “It is a recognition of our 24 years’ hard work and commitment to Nepal’s internet and telecoms industry,” he said, adding that with CDC’s backing, our ambition is to transform Worldlink into a world-class company that will serve as a model and inspiration to other companies in Nepal. “Our partnership will accelerate our pursuit to connect everyone, anywhere, all the time.”
Compared to other countries in Asia, access to digital services remains low in Nepal and presents a real challenge for the development of businesses. Improving access to affordable and quality internet is central to Nepal’s development and economic growth, and a key part of UN Sustainable Development Goal 9 (SDG9).

World Trade Report sees increasing role for services trade, need for global cooperation

The 2019 edition of the WTO’s World Trade Report highlights that services have become the most dynamic component of international trade and that its role will continue to expand in the coming decades. It stresses the need to enhance cooperation in the international community to support this expansion. The report was launched during the WTO Public Forum today by director-general Roberto Azevêdo.
“From logistics, to finance, to informatics, services have become the indispensable backbone of our economies,” said DG Azevêdo in his opening remarks. “Services generate more than two-thirds of economic output,” he said, adding that they account for more than two thirds of jobs in developing countries, and four-fifths of employment in developed ones. “But services also play an increasingly important role in international trade. Global value chains for merchandise could not function without logistics and communications services. And thanks to digitalisation, services that once had to be delivered face-to-face, like education, can now be delivered remotely.Yet services are often overlooked in discussions on global trade, and the extent of their contributions to global trade is not always fully appreciated. This report attempts to remedy this oversight.”
The report underlines that trade in services – ranging from distribution to financial services – can help countries boost economic growth, enhance domestic firms' competitiveness and promote inclusiveness. It illustrates how the share of services in international trade has continued to grow, and how technology, climate change, rising incomes and demographic changes will have an impact on services trade in the future. It also suggests ways to maximize the potential of services trade globally in the years to come.
On average, services account for about half of GDP worldwide. For developed economies, they account for around three-quarters of GDP and their proportion is increasing rapidly in developing economies.
According to the report, services trade has grown 5.4 per cent per year since 2005, while trade in goods has grown at 4.6 per cent on average. Trade in computer services and research and development have recorded the most rapid annual growth over the past decade.
According to the WTO Global Trade Model, a new quantitative trade model used by the WTO to make projections about global trade, the share of services in global trade could increase by 50 per cent by 2040. This is thanks to lower trade costs and the reduced need for face-to-face interaction due to digitalization. It is also dependent on policy barriers to services trade being lowered. 
Many developing economies are becoming increasingly services-based and their share of world services trade has grown by over 10 percentage points since 2005. However, services trade is concentrated in five developing economies – China; Hong-Kong China; India; the Republic of Korea and Singapore – accounting for over 50 per cent of developing economies’ services trade in 2017.
The report reads that services trade may help women and micro, small and medium-sized enterprises (MSMEs) play a more active role in world trade, particularly in developing economies, helping to reduce economic inequality. When MSMEs in developing countries start exporting services, they are on average two years younger than manufacturing firms. However, they export less than 5 per cent of total sales. Services are the main source of employment for women. However, the service sectors that account for most women employment have been so far among the least traded.
Despite their decline by 9 per cent between 2000 and 2017, barriers to trade in services remain much higher than in goods trade. This is largely due to the limited possibilities to supply certain services across the border and the regulatory intensity of many service sectors.
Technologies are key drivers of services trade, enabling cross-border trade of services that have traditionally needed face-to-face interaction. Digital technologies are also reducing the cost of trading services. The report finds that if developing countries are able to adopt digital technologies, their share in world services trade could increase by about 15 per cent by 2040.
The report notes that policy barriers to services trade – mainly regulatory measures – are much more complex than in goods trade. The authors of the report note that for services trade to be a powerful engine of economic growth, development and poverty reduction international cooperation will need to be intensified and new pathways will need to be found to advance global trade cooperation and make services a central element of trade policy.

Marg ERP Nepal to offer better support to the MSMEs to join the Global Value Chain

The Nepal Chapter of Marg ERP Ltd – a leading Indian company with the largest range of the most accessible, affordable inventory management and effective accounting software – is strengthening its presence and operations to fuel the growth of Micro, Small and Medium Enterprise (MSME) sector in Nepal. Marg ERP has also opened its service support center in Kathmandu to cater better to the under-served MSME sector in Nepal.
Marg ERP started its operations in Nepal just two years ago, under its Nepal Chapter ‘Nepal ERP Enterprises’, and has already started disrupting the MSME sector with its customised technology solutions. The company aims to automate and computerize 350+ enterprises and businesses each month with the support of 15 local partners and a team of Marg employees. They will be appointing additional human resource in Nepal to enable both horizontal and vertical expansion of the company.
To increase their engagement and interaction with stakeholders in the country, Nepal ERP Enterprises (Marg ERP) organised Nepal Business Partners Meet, where Marg ERP country head (India) Pritesh Prabhakar Patil and senior manager (International Marketing) at Marg ERP Tarkeyrav Singh also witnessed attendance of partners from all 7 Nepal provinces.
Progressing on the road to growth, Marg ERP has launched bigger operations in Nepal and shared its growth roadmap in the meet. During the event, senior management of Marg ERP Nepal had constructive discussions with president of Pharmacy Association of Nepal Amrit Khanal, chief executive officer of Auditors Association of Nepal Naresh Kahnal and vice president of Federation of Nepal Gold and Silver Dealer Association Manik Ratna. These esteemed associations have seen promise in the company’s solutions and have consented to sign Memorandum of Understandings (MoUs) in this respect.
Marg ERP Nepal will actively be training local talent and building skilled workforce in the country. The company is committed to developing high skilled human resource in the country to support the growing needs of the MSME sector, reads a press note issued by the Marg ERP.
Speaking about the plans of the company and its future plans, managing director of Marg ERP Sudhir Singh said, “Nepal MSME Sector is vibrant and has unmatched offerings for the global market,”
“We are committed to work closely with the MSME fraternity to add value and support them in their growth journey in the best possible way,” he said, adding that the company is increasing its presence and strengthening the company’s core to deliver latest technology solutions, quality services and reach closer to our customers. “Due to their varied and dynamic businesses the country’s MSMEs require customised technology solutions which can efficiently manage existing operations and enable them to explore more growth avenues in the global market.”
“We have the experience of working with the MSME sector for a long time and understand their business needs in depth, accordingly we develop best suited solutions,” he added, “With our new initiatives we hope to transform the MSME sector in the country.”
Marg ERP is a leading software application provider working towards ease of doing business.

Canada grant supports UN ESCAP’s project to help women entrepreneurs in Nepal

Global Affairs Canada, in partnership with the United Nations (UN) Economic and Social Commission for Asia and the Pacific (ESCAP) and the Government of Nepal, held a consultation today related to a new initiative to support the growth of women entrepreneurs as a strategy to address poverty reduction, improve social well-being and promote sustainable economic growth.
The five-year project titled, ‘Catalyzing Women’s Entrepreneurship: Creating a Gender-Responsive Entrepreneurial Ecosystem’ aims to create an enabling policy and business environment that enhances women entrepreneurs’ access to capital through innovative financing mechanisms as well as increase their use of ICT and digital solutions.
In September 2018, Global Affairs Canada announced a $13.9 million grant to ESCAP, over five years (2018-2023) for projects that aim to reduce the barriers women-owned micro, small and medium-sized enterprises (MSMEs) in South Asia, Southeast Asia and the South Pacific face in growing their businesses. For example, access to finance is a key barrier that the project will address through the use of innovative financing mechanisms, such as impact investing and women`s bonds.
More than 110 policymakers, MSME representatives and other stakeholders participated in today’s national consultation on integrating women’s needs and considerations into policy and other initiatives supporting entrepreneurship, financial inclusion and creating an enabling environment for businesses.
“Promoting gender equality and empowering women and girls is the most effective approach to achieving sustainable development goals,” said acting deputy ambassador of Canada to Nepal Amanda Strohan. “However, women entrepreneurs continue to face barriers,” she said, adding that tackling the unique challenges faced by women entrepreneurs will require innovative approaches, including novel financing mechanisms and technologies. “Canada is pleased to support the Catalysing Women’s Entrepreneurship project to provide women-owned enterprises in Nepal with the resources, skills and an enabling environment needed to grow their businesses and generate sustainable and inclusive economic growth.”
“Developing women’s entrepreneurship presents an invaluable tool for boosting Nepal’s economy as well as empowering women,” said UN under-secretary-general and executive secretary of ESCAP Armida Alisjahbana. “Yet women’s entrepreneurship is hindered by lack of access to finance and ICT tools for business development,” she said, adding that the case for investing in women’s economic empowerment is compelling. “Women are true agents of change whose innovations can lift companies, communities, and countries. Together, governments, the UN, civil society and the private sector can improve women’s and girls’ prospects.”
During the consultation, ESCAP and the UN Capital Development Fund (UNCDF) announced the winners of the project’s Women Fintech MSME Innovation Fund and thanked the Government of Canada, the Dutch Development Bank (FMO) and Visa Inc for their support to this initiative.
Nepal’s Aeloi Technologies and Khalti (Sparrow Pay) were among the 10 winning innovative business models.
In recent years, Nepal has made significant progress regarding its socio-economic status. However, it is estimated that women own only three per cent of MSMEs and face various barriers to entrepreneurship. These barriers include, amongst others, limited access to finance and ICT infrastructure, lack of financial and business knowledge, and discriminatory social norms.
The Canada Fund for Local Initiatives announced a total grant of $77,900 to three projects to be implemented by civil society organizations in Nepal this year. The projects include reducing incidences of sexual and gender-based violence in Godavari Municipality in Nepal through transformative behavioural change, including awareness-raising, training and advocacy; to be implemented by Prerana. Likewise, decreasing violence and discrimination against LGBTIQ+ people in Nepal through sensitisation workshops, capacity building, media messaging, and local stakeholder coordination meetings; to be implemented by Blue Diamond Society, and promoting the adoption of climate smart agriculture practices among female smallholder farmers of Kageshwori Manohara Municipality through integrated training and establishment of resource centres/demonstration sites of Climate Smart technologies; to be implemented by Small Earth Nepal.

Nepal, German sign financial accord

Finance Secretary Rajan Khanal and German Ambassador to Nepal Roland Schäfer today signed a financial cooperation agreement of Euro 24.3 million (equivalent to Rs 3.2 billion) on behalf of their respective governments. The total volume of bilateral technical and financial cooperation from Germany since cooperation began in 1959 amounts to around Euro 979.6 million of grant assistance, according to a press release issued by the German Embassy today.
The grant assistance committed by the Federal Government of Germany in September 2018 will be used for the promotion of solar energy in rural areas, improvement of mother and child care in urban areas and sustainable economic development in rural and semi-urban areas, the release reads.
Under these programmes, German Development Bank KfW, on behalf of the German Federal Ministry for Economic Cooperation and Development, is implementing promotion of solar energy in rural areas to support solar energy technologies such as solar pumping systems for drinking water and for irrigation, solar systems for public institutions like schools, health centres and government offices.
The bank is also implementing a project related to ‘improvement of mother and child care in urban areas including in Kathmandu-based Paropakar Maternity and Women’s Hospital. The project will construct and rehabilitate the extension of health facilities for up to four satellite centres. These satellite centres will provide both in-patient and out-patient services to women and children closer to their residencies.
Sustainable economic development project in rural and semi-urban areas is the continuation of earlier support to improve access to target-group oriented loans, predominantly in rural and semi-urban Nepal and in particular for loan sizes which go beyond microfinance but remain below traditional corporate finance.
Both governments expressed their commitments to ensuring a successful and timely implementation of these key projects, according to the press release.

The projects:
Improvement of Mother-Child Care in Urban Areas – Paropakar Maternity and Women’s Hospital, Kathmandu – Support in terms of construction and rehabilitation of health facilities to up to four satellite centers for
• Promotion of Solar Energy in Rural Areas – Support for Nepal’s solar energy technologies such as solar pumping systems for drinking water/irrigation, solar systems for public institutions – health centers, government offices and schools
• Sustainable Economic Development in Rural and Semi-Urban-Areas-MSME Finance/Phase 2 – Support in terms of improving access to sustainable and target-group oriented loans mainly in rural and semi-urban areas of Nepal. This support also includes loan sizes beyond microfinance but remain below traditional corporate finance.

Nepali startup Khalti wins UN Fintech Innovation Fund

Khalti – a homegrown financial technology startup in Nepal – has won Fintech Innovation Fund from the United Nations (UN). The fund was jointly launched by the UN Capital Development Fund (UNCDF) and the UN Economic and Social Commission for Asia and the Pacific (UNESCAP) earlier this year.
Along with Khalti, a total of10 companies from across Asia-Pacific region have won the Innovation Fund, according to a press note. 
After being announced the winner for the Fintech Innovation Fund, Khalti is rolling out a special project within July 2019. The project will support women-led micro, small, and medium-sized enterprises (MSMEs) in 12 different districts across the country – from Sankhuwasabha in the east to Darchula in the west – aiming at solving gaps between production and sales of goods produced by 3500 women involved in MSMEs in Nepal. Women involved in Dhaka Weaving to Allo Processing and Weaving to Food Processing will be supported as part of this project, the press note reads, adding that the project intends to deliver financial and digital literacy and skills to women-owned, managed or led MSMEs by bringing all the MSMEs to a digital platform and upgrade their current style of working. “Khalti will be providing them necessary training to be self-sufficient and help them in expanding their business and resources.”
Khalti is partnering with SAARC Business Association of Home Based Workers (SABAH Nepal) to implement the project. Furthermore, Khalti is also mobilising Smart Chhoris to assist the MSMEs.
Over the next year, UNESCAP and UNCDF will provide financial and technical support for Khalti to conduct the project and introduce digital and financial solutions that improve access to finance and enhance operational efficiency of these women-led MSMEs.
“Micro, Small and Medium Sized Enterprises are a vital source of employment and a significant contributor to the country’s GDP in Nepal,” director of Khalti Arvind Sah Elated by this achievement shared, adding, “However, most MSMEs have been facing difficulty in accessing loans and other financial services.”
We are building a hyper local market in Khalti platform and conducting marketing and sales of goods produced by the women and enabling payments of goods directly through Khalti app, he said, adding that we will recommend – on the basis of their monthly income level – for loan from our partner bank so that they can expand their business. “This project offers payment solutions and improved access to finance to the women-led MSMEs in Nepal.”
Through Khalti’s innovations: hyper local market and bulk payment processing system, the women-led MSMEs will be able to connect with their end users directly and receive payments on their mobile phone. The project seeks to uplift the livelihood of women involved in MSMEs in Nepal.
Launched in January 2017, Khalti is an emerging mobile payment solution in Nepal. During this very short period of time, Khalti has emerged as one of the most preferred payment choices amongst customers in Nepal. Khalti allows users to top-up their mobile balance, pay DTH bills, internet bills, various utility bills, book movie tickets, flight tickets, hotel rooms, top up Tootle balance, make payments for food ordered online at Foodmandu, and pay at various online shopping sites in Nepal. Users can avail all these services through its app and website.
The United Nations Capital Development Fund (UNCDF) and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) launched the Women MSME FinTech Innovation Fund in March 2019 in partnership with the Australian Government (DFAT), the Dutch development Bank (FMO), and Visa Inc, with the financial support from the Government of Canada provided through Global Affairs Canada.
According to the World Bank’s statistics, more than 90 per cent of enterprises in developing Asia-Pacific region are MSMEs, making them a vital source of income and employment. However, more than 45 per cent of micro, small and medium sized companies (MSMEs) in Asia and the Pacific experience access to finance as a constraint. The constraints faced by MSMEs limits regional economic growth.

10 digital solutions for women entrepreneurs win support from UN FinTech Innovation Fund

A crowdfunding platform for women farmers, online marketplaces for women-produced goods and services, and e-wallet enabled lending were among ten of the winning business models which will be co-funded by the United Nations (UN) to improve access to finance for women-owned, managed or led micro, small and medium enterprises (MSMEs) in the region.
Launched by the UN Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations Capital Development Fund (UNCDF) in March 2019, the Women Fintech MSME Innovation Fund will support the implementation of the winning private sector FinTech and digital business solutions for women entrepreneurs in Bangladesh, Cambodia, Fiji, Myanmar, Nepal, Samoa and Viet Nam.
“We received over 100 innovative proposals from businesses registered in more than 20 countries around the region,” ESCAP deputy executive secretary Hongjoo Hahm said, adding that the breadth of proposals received was impressive. “It is encouraging to see how digital finance and digital solutions can be used to address some of the barriers women-led MSMEs face in accessing finance and advancing their business.”
“ESCAP is grateful to the Government of Canada for their support to this initiative,” Hahm added.
MSMEs are a vital source of employment and a significant contributor to the GDP. However, more than 45 per cent of MSMEs in Asia and the Pacific experience financial access constraints. Socio-cultural norms mean women-led enterprises have to overcome gender-specific barriers to access institutional credit and other financial services.
“To address the issues that female business owners face, we need entrepreneur-centric solutions that will allow her to grow her business and reach her full potential,” said senior advisor at the Fintech and Financial Inclusion at the Dutch development Bank (FMO) Andrew Shaw.
The Women MSME Fintech Innovation Fund provides risk capital and technical assistance to pilot technology enabled financial service solutions for women-led enterprises. Out of the 110 applications received, the top 30 proposals were asked to pitch their ideas to an independent investment committee made up of industry experts and regulators.
Over the next year, ESCAP and UNCDF will provide financial and technical support to the ten winning companies as they develop and pilot their business initiatives. In the short-term, the initiatives aim to support more than 9,000 women led MSMEs in Bangladesh, Cambodia, Fiji, Myanmar, Nepal, Samoa and Viet Nam.

ADB's private sector operations commitments reach record high of $3.1 billion

The Asian Development Bank’s (ADB) private sector operations in 2018 climbed by 37 per cent to reach a record high $3.1 billion, lifting ADB’s overall portfolio of private sector operations to $12.4 billion, according to the bank’s Development Effectiveness Report of Private Sector Operations 2018.
According to the report released at the 52nd Annual Meeting of ADB's Board of Governors in Nadi, Fiji, there were a record 32 new private sector projects committed in 2018, compared with 27 the previous year. Direct financing was complemented by a record $7.2 billion in commercial cofinancing last year, representing almost 50 per cent of all cofinancing mobilised by ADB.
"The performance of ADB’s private sector operations is helping the region address many challenges including improving its infrastructure, creating jobs, and enhancing access to finance,” said ADB vice president for Private Sector Operations and Public-Private Partnerships (PPP) Diwakar Gupta. "ADB will continue to expand private sector assistance by diversifying into new and frontier markets, scaling up financing for agribusiness, health, and education, and moving into emerging infrastructure sectors such as water, waste, and sanitation.”
Private sector transactions by ADB in 2018 are expected to create nearly 26,000 new jobs across the region. They will generate enough electricity annually to serve 2.6 million average-sized households in Asia, while wastewater projects will help treat 1.8 million cubic meters of wastewater per year when fully operational. More than 6.1 million people as well as micro, small, and medium-sized enterprises (MSMEs) will benefit from better access to financial services. Agribusiness projects committed last year aim to improve the livelihoods of more than 3 million farmers and improve their food security.
Active private sector operations have already contributed to the region’s economy, providing jobs for an additional 313,308 people and training 322,303 beneficiaries, mostly in financial literacy. Access to finance has been improved through active private sector projects for more than 6.8 million people and MSMEs, while other projects have contributed to the education of 9,455 additional students. ADB’s private sector clients have achieved carbon emissions reductions of 11.4 million tons annually.
Energy projects dominated the commitment portfolio of ADB’s Private Sector Operations Department (PSOD) in 2018, accounting for $1.7 billion or around 54 per cent of total commitments. The volume of financial intermediary projects committed last year almost doubled to over $900 million, while PSOD’s Microfinance Risk Participation and Guarantee Program achieved record volumes by facilitating $271 million in local currency loans to microfinance institutions.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members, 49 from the region.

EU ambassador visits Bungmati to see efforts towards conservation

EU ambassador to Nepal Veronica Cody visited Bungmati in Lalitpur today to take stock of the progress of Sustainable Tourism and Green Growth for Heritage Settlements of the Kathmandu Valley (Parya-Sampada) project funded under SWITCH-Asia intervention of the European Union (EU).
The project is implemented by UN-Habitat in partnership with Institute for Housing and Urban Development Studies, the Netherlands, Centre for Integrated Urban Development, SAARC Business Association of Home-based workers Nepal, and Lumanti. National Reconstruction Authority (NRA) is joining hands to provide backstopping support for the reconstruction works at Bungamati. This comprehensive initiative was kicked off in May 2018 in partnership with the government and Lalitpur Metropolitan City, and is expected to be completed by 2020.
This initiative is an effort to support the post-earthquake recovery process, to regain the lost momentum by restoring Bungmati as a pilot case to its previous stage by conservation and creating sustainable tourism opportunities, mainly to improve livelihood of the community by capitalising on culture, local cuisines, festivals, rituals, music, local stories, etc for the micro, small and medium enterprises (MSME) including homestays, cafes, and handicraft shops, especially youths and women. Bungamati is selected as a prototype out of 52 heritage settlements in the Kathmandu Valley, which has a huge potential to showcase heritage conservation and sustainable tourism through green growth, sustainable reconstruction, entrepreneurship development of women and youth, investment and product innovation.
Speaking at the programme, ambassador Cody highlighted that the action contributes to enhance the institutional capacity of the local government and communities to put the beautiful Bungmati town firmly on the radar screen of the tourism industry, more specifically, bringing more tourists, supporting the government's effort to celebrate 'Visit Nepal 2020', a national tourism year committed to promote tourism industry and enhance local tourism as associated industries, as well as promote sustainable development, reducing poverty and contributing towards climate change mitigating, addressing current global challenges and opportunities in the light of the 2030 Agenda for Sustainable Development (SDG), more specifically SDGs 5, 8, 11 and 12, supporting Nepal in the achievement of SDGs in a timely manner.

UN’s Asia-Pacific Trade and Investment Committee convenes amid global trade uncertainty

Against the backdrop of uncertain trade relations between the United States and China, senior government officials from across Asia and the Pacific gathered in Bangkok this week to re-iterate their commitment to strengthening regional trade and investment.
Convened by the United Nations (UN) Economic and Social Commission for Asia and the Pacific (ESCAP) from March 11 to 15, the Asia-Pacific Trade and Investment Week is a regional platform to discuss issues of importance to trade and investment for ember states. A key event of the five-day meeting is the sixth session of the Committee on Trade and Investment, which provides guidance to ESCAP on its work on bolstering trade and investment cooperation. Delegates engaged in thematic deliberations, including discussions on the implications of rising protectionism for the region, the benefits of trade digitalisation, navigating non-tariff measures for sustainable development, and the pivotal role of science, technology and innovation policies.
Opening the Committee, ESCAP executive secretary Armida Alisjahbana said that ESCAP analysis shows that regional integration can be a powerful stabilising force, and could offset economic losses caused by international trade tensions.
Addressing participants, director-general of the Trade Policy and Strategy Office at the Ministry of Commerce, Thailand Pimchanok Vonkorpon highlighted that, “ESCAP can be a bridge among countries with different backgrounds, needs and experience on trade and investment development that is changing rapidly." She added that ESCAP can play a crucial role in forging cooperation and collaboration in the future.
A record number of 30 member states also attended the intergovernmental steering group on cross-border paperless trade facilitation, which made progress on shaping regional and national action plans to accelerate trade digitalisation in Asia and the Pacific. The preliminary results for the region of the UN Global Survey on Digital and Sustainable Trade Facilitation were reviewed and block chain and other frontier technologies explored to reduce the use of paper documents in trade transactions and boost regional integration.
Among the highlights of Trade and Investment Week was the ‘soft’ launch of ESCAP’s Trade Intelligence and Negotiation Advisor (TINA), an automated online platform that is designed to assist, particularly developing and least developed countries, with often complex trade negotiations. Future extensions of TINA may include legal provisions, non-tariff information, product-level estimates of trade mis-invoicing and resultant tax revenue losses, and the impact of LDC graduation and quantifying impact of tariff reductions.
Another highlight was the launch of the Women Micro, Small and Medium-sized Enterprises (MSME) Fintech Innovation Fund. The Fund will support the expansion of innovative digital and fintech solutions for women-led MSMEs. Implemented as part of a five-year, Canada-funded ESCAP project which aims to support the growth of women entrepreneurs in Asia and the Pacific, the fund is hosted by the United Nations Capital Development Fund’s (UNCDF) Fund Facility investment mechanism, and also has financial support from the Netherlands Development Finance Cooperation (FMO).
"The Women MSME Fintech Innovation Fund contributes to SDG5 by providing support for greater financial inclusion for women including their access to capital, markets and business development services," ambassador of Canada to Thailand Donica Pottie said, adding that the Fund is aligned with Canada’s feminist development policy and Canada is pleased to support the Fund’s work to support innovation to allow women to grow their businesses, improve their lives, and contribute to their families and communities.
"We will be working to co-fund creative solutions that truly address the specific barriers women MSMEs face," UNCDF SHIFT programme manager Rajeev Kumar Gupta said, adding that they look forward to working with the next generation of innovations to impact women MSMEs in the Asia-Pacific region with innovative digital and fintech solutions changing the landscape of how MSMEs operate.

Global report highlights transformative impact of digital technologies on trade

The 2018 edition of the WTO’s flagship publication, the World Trade Report, finds that digital technologies – the Internet of Things, artificial intelligence, 3D printing and Blockchain – will have a profound impact on global trade, adding up to 34 percentage points to trade growth by 2030 thanks to lower costs and higher productivity.
However, they could also create a challenging environment for those seeking to keep up with the latest innovations. The Report launched today at the WTO Public Forum also shows that digital technologies are likely to further reduce trade costs and boost trade significantly, especially in services and for developing countries. Global trade is projected to grow by an additional 2 percentage points annually between 2016 and 2030 as a result of digitalisation, falling trade costs and the increased use of services. This corresponds with a 31-34 percentage point higher trade growth over 15 years.
The share of services in global trade is projected to grow from 21 per cent in 2016 to 25 per cent in 2030. The report also finds that the reduction in trade costs could be especially beneficial for micro, small and medium sized enterprises (MSMEs) and firms from developing countries, provided they have the ability to keep up with the adoption of digital technologies. In the best scenario, developing and least-developed economies' share in global trade is predicted to grow to 57 per cent by 2030, from 46 per cent in 2015, whereas if they cannot keep up, this share is predicted to rise to 51 per cent.
The report discusses how digital technologies can unlock savings, such as through better route planning, autonomous driving and smart inventories made possible by artificial intelligence and robotics. Blockchain solutions – a system of decentralised, digital transactions – can reduce time spent on customs compliance and logistics. The Internet of Things, the networking and processing capabilities of everyday objects, can help to improve operational efficiency through better preventative maintenance of machinery and products. These technologies can therefore reduce transportation and storage costs, which represent a major share of overall trade costs.
Digital technologies can also significantly affect what the world trades. For example, remote controlled robotics have led to revolutionary advances in trade in services and the emergence of new services such as telesurgery. Enhanced technological capacities which allow faster and simpler processing of traded products could also foster trade in time-sensitive, certification-intensive and contract-intensive goods.
The report argues that new technologies are likely to change the established ways the world trades, with comparative advantages predicted to change across economies. AI, 3D printing and advanced robotics could reduce the role of labour as a source of comparative advantage, while factors such as the quality of digital infrastructure and market size as well as institutional and regulatory determinants of comparative advantage, including intellectual property protection, might become more relevant. 3D printing, furthermore, may to some extent reduce the need for outsourced assembly, the number of production steps and other factors related to global value chains.
The report identifies certain areas which may warrant international cooperation. These include key initiatives being undertaken by multilateral organisations such as facilitating a favourable legal and regulatory framework, competition-related issues, intellectual property rules, supporting MSMEs, promoting digital inclusion, and addressing challenges related to trade facilitation and infrastructure for information communication technology. The report concludes that, overall, the expansion of digital trade holds the potential to generate considerable benefits if it takes place under conditions that adequately address important public policy challenges. Issues concerning inclusiveness, privacy protection and cybersecurity are likely to figure prominently in debates on the future governance of digital trade.