At One to Watch, we believe that unlocking the potential of Nepal’s tech and tech-enabled SMEs requires more than capital, it requires collaboration, innovation, and trust across the financial ecosystem. On May 9, 2025, we took a bold step toward this vision by hosting a high-level symposium in collaboration with the Deposit and Credit Guarantee Fund (DCGF), titled “The Role of Public Guarantees in Stimulating Lending to Tech Companies in Nepal.”

Held at Hotel Ambassador in Lazimpat, the event brought together 39 senior representatives from 15 financial institutions, development partners, policymakers, and SME founders. The objective? To spark a 360-degree dialogue on the barriers and opportunities in lending to Nepal’s growing base of innovation-driven enterprises.

Breaking Barriers with Public Guarantees

A highlight of the event was the signing of a Memorandum of Understanding (MoU) between One to Watch and DCGF. In his welcome remarks, General Manager of One to Watch  Mr.Biswa Giri walked participants through OTW’s decade-long journey in Nepal and introduced the NIIC 2 Fund. 

Mr. Ramesh Ghimire, Executive Director of DCGF, unveiled several bold reforms to Nepal’s public guarantee framework:

• Risk-Based Premiums: A more sustainable model where premiums are assessed based on borrower risk tiers.
• Segmented Portfolio Guarantees: Encouraging banks to submit SME portfolios with similar risk characteristics for tailored coverage.
• Provincial Guarantee Schemes: Pioneered in Koshi Province with Project Udaya, offering 100% first-loss coverage to boost regional SME lending.
• Audit Transparency & Claims Reform: Initiatives to reduce delays, improve governance, and ensure transparency through dual-layer audits.

Mr. Ghimire was candid in acknowledging the gaps in the system—such as low guarantee penetration (less than 3% of total lending) and slow claims processing—and emphasized DCGF’s commitment to evolving its role from safety net to strategic enabler.

The keynote address by Dr. Satyendra Timilsina, Executive Director at Nepal Rastra Bank, struck a powerful chord. He called for a shift from collateral-based to cash-flow-based lending, especially for SMEs in the NPR 2–5 crore segment.

Dr. Timilsina reiterated that banks participating in DCGF-backed loans receive a 75% loan loss provisioning waiver, and that the NRB fully supports the provincial credit guarantee model. He urged banks to look beyond physical assets and recognize recurring revenues, customer contracts, and market potential as viable indicators of creditworthiness.

From Policy to Practice: Real SME Stories

To ground the discussions in reality, two companies—Ingrails and GenTech—presented their journeys..

The symposium ended on a high note, with banks expressing both enthusiasm and constructive feedback on credit guarantee schemes. Key suggestions included digitizing the claims process, removing restrictive recovery clauses, and expanding provincial schemes nationwide.

The event solidified the importance of institutional partnerships, regulatory innovation, and ecosystem-wide collaboration in building a more inclusive financing landscape.

As the NIIC 2 Fund continues to grow, our partnership with DCGF may play a pivotal role in creating pathways for deserving SMEs to access capital, scale innovation, and contribute to Nepal’s economic transformation.