IFC to invest 0,000 in RMDC

International Finance Corporation (IFC), the largest global development institution focused on private sector growth, signed a pact with Rural Microfinance Development Centre (RMDC) of Nepal on Thursday to purchase its equity worth 0,000.

IFC Country Manager for Bangladesh, Bhutan and Nepal, Kyle Kelhofer and Chief Executive Officer (CEO) of RMDC Shankar Man Shrestha signed the agreement. Ashoke Rana, CEO of Himalayan Bank and Rajan Kumar Amatya, Deputy General Manager of Nepal Investment Bank Ltd also signed the deal as the sponsor banks.


IFC has agreed to buy RMDC’s share at a premium of Rs 180 per share over the face value of Rs 100. With this investment, IFC will have 8.25 per cent stake in RMDC and that will make it a first international agency to have a stake in RMDC.


“The deal between RMDC and IFC will be a milestone in the company’s history. While providing a reliable solution out of poverty, this agreement will further enhance participation of the poor, especially women, in economic and social development,” RMDC CEO Shrestha.


According to Kelhofer, the investment is expected to help increase RMDC’s ability to reach more of the poor and improve the country’s microfinance access. Access to microfinance in Nepal stands at 3 per cent of the population, the lowest in the world.


“As the first international investor in Rural Microfinance Development Centre against the backdrop of global economic problems, IFC is committed to strengthening the foundations of the financial sector in Nepal,” said Kelhofer.


In addition to the financing, IFC has pledged to provide RMDC with knowledge on international best practices and assistance in developing a robust business model. The project is expected to have significant impact on reducing poverty, empowering women, triggering economic development and improving access to credit in remote Nepal.


IFC’s investment is expected to give positive message to the public about RMDC which is going to make an initial public offering (IPO) within a month. “We will soon issue IPOs worth Rs 156 million,” said Shrestha. The company has finalised Ace Capital as its issue manager.


Shrestha also disclosed the plan to offer 140 thousand units of shares to institutional investors. For this, the company has been gathering proposals from various commercial banks. “The institutions with better price quotes will obviously get the shares,” said Shrestha. So far, six commercial banks have shown interest in purchasing its stocks.