Kathmandu: The government has announced a significant initiative to enhance financial inclusion for small and medium enterprises (SMEs) by introducing a credit guarantee scheme featuring a “first-loss recovery” mechanism.
This strategic move is intended to de-risk lending for financial institutions, thereby encouraging them to extend credit to smaller businesses that often face challenges in securing traditional bank financing due to stringent collateral requirements.
Finance Minister Dr Swarnim Waglé shared this plan on Friday while presenting the federal budget for the upcoming fiscal year 2083/84 during a joint session of the Federal Parliament.
During his speech, the Minister emphasized that the government will actively move forward with this credit security framework to ensure that SMEs have the necessary capital to thrive, ultimately stimulating entrepreneurship and economic resilience across the country.
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