Trading Strides
IFC enlists NIC Bank in its Global Trade Finance Program
By A CORRESPONDENT
IFC, the private sector arm of the World Bank Group, today announced that Nepal Industrial & Commercial Bank has become the first bank in Nepal to join its Global Trade Finance Program. IFC is providing NIC Bank with a $2 million facility, which will increase the volume and value of the country’s imports and exports while improving access to finance for local businesses, according to a press release by the IFC.
The Global Trade Finance Program supports trade with emerging markets worldwide and promotes the flow of goods and services between developing countries. IFC provides partial or full guarantees against underlying trade instruments and covers the payment risk of participating issuing banks.
The program allows issuing banks to increase the volume and value of trade transactions, with enhanced tenors and access to competitive pricing terms. In addition to the guarantee facility, the IFC South Asia Enterprise Development Facility will conduct a diagnostic study and eventually assist the bank on a specific program for institutional capacity building that will help enhance the quality of service to the bank’s SME clients based on the findings of the study.
Sashin Joshi, NIC Bank’s Chief Executive Officer, said, “We are delighted to work with IFC’s Global Trade Finance Program. It will help us expand our network of corresponding banks and create new and valuable business opportunities for our clients in Nepal and around the world. In addition, through the capacity building program, we hope to adopt better risk management practices.”
“I am very pleased that NIC Bank has signed up under the guarantee program,” said Per Kjellerhaug, IFC’s Country Manager for Nepal , Bangladesh and Bhutan . He added, “The Global Trade Finance Program is an important mechanism to get local banks into an active global network that facilitates transactions in challenging markets, promotes competitive financing, and builds correspondent bank relationships with new institutions on a low-risk basis. Trade finance is one good example of the many products IFC offers to help develop a sector.”
Anil Sinha, General Manager of IFC SEDF, explained, “We will collaborate with NIC Bank in developing appropriate SME banking products and services and building their institutional capacity.” Sinha is also the South Asia Regional Coordinator for IFC’s advisory services, an increasingly large component of IFC’s contribution to private sector growth in developing regions.
Trade development and advisory services for issuing banks represent an integral part of IFC’s Global Trade Finance Program. Advisory services modules include basic and intermediate courses on trade finance. In some cases, IFC places experienced trade finance bankers with issuing banks to help them develop their trade finance and other banking skills.
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives.
Through FY06, IFC Financial Products have committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability.
PVT SCHOOLS Facing Agitation
Once again, over 8000 private schools across the country face the indefinite strike that could paralyze the education sector.
In the last one decade, the education sector has faced tumultuous times as it was often targeted by the conflicting parties.
This time, the Institutional School Teachers’ Union (ISTU) has warned of indefinite strike in private schools across the country from May 17. On Sunday (May 13), the ISTU disrupted school classes and organized a protest rally in front of Education Ministry demanding that the teachers in community and private schools be given facilities similar to those of government schools such as appointment letters, passing new Education Act, making them permanent, fixing minimum pay scale and so on.
The private school operators have warned that they, too, will shut down the schools forever if the ISTU forces them to close down. Umesh Shrestha, president of Private and Boarding Schools Organization of Nepal (PABSON) said it is impractical for private schools to reduce their fees by 50 percent and provide similar facilities to their teachers like those of government schools. He dared the agitators to come up with Rs 20 billion and nationalize all the private schools.
