The governments of Nepal and Switzerland on Monday, March 24, exchanged the documents marking the official launch of the Udaya Guarantee Fund (UGF) and Udaya Challenge Fund (UCF) amid an event in Kathmandu.
The funds aim to strengthen financial access for small and medium enterprises (SMEs) in Koshi Province.
Attended by high-ranking government officials, international development partners, and key stakeholders from the banking and private sectors, the event was chaired by Koshi’s Minister for Economic Affairs and Planning Ram Bahadur Magar. Minister for Industry, Commerce, and Supplies Damodar Bhandari was the Chief Guest, while Ambassador of Switzerland to Nepal Danielle Meuwly was the special guest.
Transforming SME Financing Through Innovation
The Udaya Project – a joint initiative of the Government of Nepal and the Government of Switzerland – is designed to foster economic transformation by providing innovative financial mechanisms to SMEs.
The newly launched UGF and UCF aim to reduce financial risks for commercial banks, encouraging them to provide accessible loans to entrepreneurs.
Speaking at the event, Minister Bhandari emphasized the importance of these financial instruments in driving Nepal’s economic progress.
“SMEs are the backbone of our economy, and through these funds, we aim to ensure they receive the financial support they need to grow and compete at a national and international level,” he stated.
Ensuring Sustainable Growth and Economic Inclusion
During the event, Shankar Nepal, Secretary at Ministry of Economic Affairs and Planning, Koshi, provided an overview of the funds and their expected impact.
A presentation on UGF and UCF highlighted how these mechanisms will facilitate financial inclusion by mitigating lending risks and bridging the gap between SMEs and financial institutions.
Ambassador Meuwly reaffirmed Switzerland’s commitment to supporting Nepal’s economic development. “This initiative reflects our shared vision of financial inclusion, economic resilience, and long-term growth. We are proud to partner with Nepal in creating a robust financial ecosystem for SMEs,” she remarked.
Official Inauguration and Future Prospects
The event concluded with the official inauguration of the Udaya Guarantee Fund and Udaya Challenge Fund by Minister Magar, underscoring the Government of Nepal’s dedication to strengthening SME financing.
Ramesh Ghimire, CEO of the Deposit and Credit Guarantee Fund (DGGF), the implementing partner for UGF and UCF, shared his reflections on the event, emphasizing that the initiative represents a landmark effort in providing blended finance solutions to SMEs in Nepal.
In his closing remarks, Minister Magar stated, “This initiative is not just about financial access but about creating an enabling environment where SMEs can thrive, innovate, and contribute to Nepal’s overall economic prosperity.”
