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Invest Impact Nepal Evaluation

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Invest for Impact Nepal Evaluation

Supporting local financial institutions and private equity funds addressing ecosystem constraints

Background  

Invest for Impact Nepal (IIN) is a market creation programme established in 2022 by British International Investment (BII) and Swiss Development Cooperation (SDC) and FMO. 

IIN aims to unlock and accelerate foreign investment to speed up growth, create jobs and assist in the development of an equitable and sustainable economy in Nepal, by enabling Financial Institutions (FIs) and Private Equity and Capital (PEVC) funds to access resources and expertise from DFIs and impact investors into the Nepali businesses and investment ecosystem.  

To achieve this, IIN collaborates with key stakeholder groups in the ecosystem which include FIs, PEVCs via the Nepal Private Equity Association (NPEA), Nepal Bankers Association (NBA), Government of Nepal and regulators, DFIs, DPs and academic partners (Tribhuvan University and Barcelona School of Management).  

Halfway through its three-year program FMO intended to determine the development results achieved through the program; and provide actionable recommendations and learning for the local implementation partner, FMO and other DFIs.   

The approach  

FMO contracted URSUS consulting to assess the results of the program throughout its implementation and at the end and answer evaluation questions related to the: changes that the target groups experienced because of the program’s activities, uptake of ESG standards in the financial sector in Nepal, collaboration among DFIs and development partners and IIN exit strategy. 

The evaluation consisted of a combination of methods including: an extensive review of documents; monitoring data and an ‘outcomes harvesting’ exercise by IIN (December 2023); face-to-face and online interviews, and baseline surveys sent to commercial banks and PEVC funds. A combined URSUS and FMO team visited Nepal in March 2024. 

Conclusions  

Nearly halfway through its three-year program, IIN is well-established with its target audiences: it is on track to deliver a complex mix of activities and outputs.  These outputs are beginning to translate into changes in attitudes towards sustainable financing amongst commercial banks, PEVCs, GoN regulators and DFIs, while more progress needs to be made in how the financial sector applies ESG standards. 

Recommendations  

The evaluation suggested the recommendations summarized below for the local implementation partner.  

  • IIN should prepare a proposal to extend the program beyond 2025 that partners will review.  
  • Continue strengthening Nepal Banking Association (NBA)’s offer of training and policy thinking for sustainable banking. 
  • Continue working with Nepal Private Equity Association (NPEA) and leading PEVCs to secure DFI investment, and 
  • Continue working on reform of regulations but also consider working more closely with key departments within the regulators on wider sustainable finance policy issues.   
  • Continue working with other DFIs and DPs to help channel private sector funding towards impact investment opportunities.  

Moving forward  

Upon the completion of the evaluation, FMO, partners and Invest for Impact Nepal’s local implementation partner discussed the recommendations. The local implementation partner has already started preparing a proposal for extension and actioning on some of the recommendations above. 

Access the evaluation here.

Download the report here

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