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UK’s BII and Laxmi Sunrise Bank Sign $25 Million Deal to Expand Finance Access for Nepal’s MSMEs and Women Entrepreneurs
- BFIS News
- 2026 May 28 14:12
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Kathmandu, May 27, 2026 — British International Investment (BII), the United Kingdom’s development finance institution and impact investor, has entered into a $25 million credit facility agreement with Laxmi Sunrise Bank Limited to enhance access to finance for micro, small and medium-sized enterprises (MSMEs) in Nepal, with a strong emphasis on women entrepreneurs.
The agreement is aimed at addressing Nepal’s significant MSME financing gap at a time when small businesses remain a key driver of the national economy. MSMEs account for around 22 percent of Nepal’s gross domestic product and provide employment to nearly two million people. However, only about 16 percent of these enterprises currently have access to formal financial services, due to limited financial reach and mismatches between lender requirements and borrower needs, according to World Bank and Nepal Rastra Bank data.
Under the partnership, Laxmi Sunrise Bank will scale up its lending operations to MSMEs over the deployment period. At least 30 percent of the credit facility is expected to be directed toward women-led businesses, aiming to strengthen financial inclusion and support female entrepreneurship across the country.
The initiative also aligns with the global 2X Challenge, which promotes women’s economic empowerment and counts BII as a founding member. Laxmi Sunrise Bank has been recognized under the initiative for its gender-smart financing practices, including progress in governance, leadership, employment, and portfolio inclusion. The bank has also received technical assistance through BII’s Invest for Impact Nepal programme to strengthen its capacity to serve women-owned enterprises.
In addition, Laxmi Sunrise Bank has committed to strengthening its Environmental and Social Management System (ESMS), aligning its operations with broader sustainability and responsible banking standards. This is expected to improve the bank’s environmental and social risk management framework while supporting sustainable financing efforts.
Government and Institutional Reactions
Seema Malhotra, UK Minister for the Indo-Pacific and Minister for Equalities, said the partnership reflects the UK’s long-standing support for Nepal’s economic development and inclusive growth. She highlighted that the collaboration aims to expand opportunities for women entrepreneurs and strengthen sustainable economic progress.
Srini Nagarajan, Managing Director and Head of Asia at BII, said Nepal remains a key focus under the institution’s frontier markets strategy. He noted that increased access to finance for underserved businesses is essential for private sector growth and job creation.
Sumed Bhattarai, Officiating Chief Executive Officer of Laxmi Sunrise Bank, described the agreement as a milestone in the bank’s journey toward inclusive and sustainable banking. He emphasized that MSMEs form the backbone of Nepal’s economy and that the facility will help bridge longstanding financing gaps, particularly for women-led enterprises.
About the Institutions
Laxmi Sunrise Bank Limited is an ‘A’ class commercial bank in Nepal with an extensive national network of branches and ATMs. The bank focuses on expanding accessible financial services and supporting private sector development through credit to individuals and enterprises.
British International Investment (BII) is the UK’s development finance institution and impact investor. It invests in emerging markets to support sustainable development, climate action, and inclusive economic growth. BII is also a founding member of the 2X Challenge, which has mobilized billions of dollars globally to support women’s economic empowerment.
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