The International Finance Corporation (IFC), a private sector lending arm of the World Bank, will soon issue request for
proposals (RfPs) to hire a new fund manager and resume operation of Business Oxygen (BO2), the country’s first venture fund established around one-and-a-half years ago to support small and medium enterprises (SMEs).
“We are mulling over issuing a public notice in this regard in August,” a high-ranking IFC official told The Himalayan Times on condition of anonymity. “We hope this will give a new lease of life to the venture fund, which is crucial for development of SMEs in Nepal.”
BO2, a $14 million venture fund, was formally launched on January 15, 2013, with the aim of providing collateral-free loans and consultancy service to budding SMEs facing difficulty in obtaining bank finance.
The fund, established with financial support of $7 million from the IFC, was managed by a joint venture between Bank of Kathmandu, a class ‘A’ financial institution, and beed, a think-tank. Though the fund manager was supposed to raise another $7 million on its own as per the agreement, it could not do so due to internal dispute in beed. Since then, the country’s first venture fund has been lying dormant.
“It was unfortunate that the fund could not operate as anticipated. But we won’t allow BO2 to collapse, as SMEs are crucial for the country’s economic development and are key to generating jobs,” the IFC official said, adding, “We hope we will be able to hire a competent fund manager to resume operation of BO2 upon issuance of request for proposals.”
The IFC, however, has not finalised terms and conditions for selection of fund manager. It is also yet to decide on whether to allow both firms and individuals to take part in the bidding. But what is clear is that whoever is appointed will have to work with Bank of Kathmandu. It is expected that revival of the venture fund will once again pave the way for potential SMEs, including those located outside of Kathmandu Valley, to grow further even if they lack capital.
Earlier, BO2 had pledged to make equity investment of up to $500,000 in an SME, with annual sales and assets of $3 million or less and employee base of below 50, for a period of up to five years. It had, however, refrained from extending support to start-up companies and firms engaged in manufacturing of alcohol, tobacco, arms and ammunitions.
source: the himalayan times,3 july 2014
LINK
proposals (RfPs) to hire a new fund manager and resume operation of Business Oxygen (BO2), the country’s first venture fund established around one-and-a-half years ago to support small and medium enterprises (SMEs).
“We are mulling over issuing a public notice in this regard in August,” a high-ranking IFC official told The Himalayan Times on condition of anonymity. “We hope this will give a new lease of life to the venture fund, which is crucial for development of SMEs in Nepal.”
BO2, a $14 million venture fund, was formally launched on January 15, 2013, with the aim of providing collateral-free loans and consultancy service to budding SMEs facing difficulty in obtaining bank finance.
The fund, established with financial support of $7 million from the IFC, was managed by a joint venture between Bank of Kathmandu, a class ‘A’ financial institution, and beed, a think-tank. Though the fund manager was supposed to raise another $7 million on its own as per the agreement, it could not do so due to internal dispute in beed. Since then, the country’s first venture fund has been lying dormant.
“It was unfortunate that the fund could not operate as anticipated. But we won’t allow BO2 to collapse, as SMEs are crucial for the country’s economic development and are key to generating jobs,” the IFC official said, adding, “We hope we will be able to hire a competent fund manager to resume operation of BO2 upon issuance of request for proposals.”
The IFC, however, has not finalised terms and conditions for selection of fund manager. It is also yet to decide on whether to allow both firms and individuals to take part in the bidding. But what is clear is that whoever is appointed will have to work with Bank of Kathmandu. It is expected that revival of the venture fund will once again pave the way for potential SMEs, including those located outside of Kathmandu Valley, to grow further even if they lack capital.
Earlier, BO2 had pledged to make equity investment of up to $500,000 in an SME, with annual sales and assets of $3 million or less and employee base of below 50, for a period of up to five years. It had, however, refrained from extending support to start-up companies and firms engaged in manufacturing of alcohol, tobacco, arms and ammunitions.
source: the himalayan times,3 july 2014
LINK
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