Investment Policy

LBSC’s mission is to promote sustainable private sector development in rural Nepal. To implement its operational guidelines, LBSC invests on a for-profit basis in SMEs which meet the Centre’s investment criteria in terms of commercial viability, environmental sustainability, and socio-economic impact.

1) LBSC targets enterprises / entrepreneurs within its geographic coverage, who have difficulty obtaining financing and/or technical assistance. The enterprises / entrepreneurs should demonstrate comparative advantage and the motivation and experience to succeed.

2) LBSC targets enterprises that can have positive, sustainable impact on the welfare of local communities, including employment generation, gender equality, product / services quality improvement, and increase in household revenue.

3) LBSC invests through a combination of financing instruments to seek an appropriate rate of return on each investment. In each case, LBSC ensures that an exit mechanism is available to transition its shares to entrepreneurs and strategic investors. LBSC limits its financial exposure to any one enterprise and to any one sector unless otherwise approved on a case by case basis by the Board of Directors.

4) LBSC only invests in private entities which are (a) located within our target area of ten districts of the Western and Mid-Western Regions (until the model is deemed achievable in other

regions), (b) involved in activities that are viable, competitive, profitable and not environmentally detrimental, (c) of acceptable average size (employees) and annual revenues, and (d) in compliance with Nepali labour and environmental regulations.