Message from CEO

Dear Stakeholders,

Deposit & Credit Guarantee Fund (DCGF) has ushered to the 50th year of its glorious journey to financial stability from 4th Ashoj 2080 B.S. During the period, DCGF has been successful in positioning itself as one of the key drivers of the Nepalese banking and financial ecosystem by securing institutional credits and public deposits through different guarantee schemes. 
In the later years, there has been tremendous pressure on the growth of DCGF’s guarantee business, primarily on credit guarantee front, amidst adverse business sentiments emanated from series of eventualities, such as, contraction in the BFI’s credits, increase in quantum of deteriorated credits in the market, increase in rate of interests, demonstrations against BFIs, reduction in disposal income of the depositors, low investment sentiments, etc. Despite these adversities, the overall financial position of DCGF remained satisfactory during the FY 2079/80. During the year, DCGF has earned total guarantee fee income of Rs 4 billion, out of total guaranteed credit portfolio of Rs. 277 billion and deposit guarantee of Rs. 1,289 billion, which is 37% higher than that of the previous FY. DCGF has registered Rs. 2.06 billion towards investment income during the year, which is 42% higher than that of the previous year. With significant growth in fees and investment income, the total income of the Fund has crossed Rs. 6.68 billion. Amidst adverse economic sentiments prevalent throughout the year, DCGF has been successful in securing top 5th position amongst highest taxpaying government owned enterprises during FY 2079/80, with significant improvements in its bottom line compared to last year. The progress thus achieved during the year has made DCGF family happier and more responsible. 
The trend of contraction witnessed in BFIs’ credit expansion has not yet visibly improved due to various discouraging economic factors, including but not limited to, stress in Capital Adequacy Ratio (CAR) of the BFIs, dearth in lendable resources, slow-down in business activities, decrease in credit demands in the market, inconsistencies between rate of interest and business profits, and so on. The growth in DCGF’s credit guarantee business is not possible unless and until the trend of contraction in the supply of BFI’s credits starts showing improvements. As such, growth in credit guarantee business appears more challenging in the upcoming days. Likewise, the growth trend of NPAs might also result in significant increase in the DCGF’s guarantee claim expenses. If this discouraging trend continues, retaining the existing growth in DCGF’s profitability might become more challenging for the current year and ahead. Moreover, the DCGF’s profitability might witness a tremendous pressure on account of claims pertaining subsidized credits which will be maturing from this year onwards. 
In the above backdrop, DCGF can achieve its growth targets only if it grabs available business opportunities and utilizes them at the best optimum level, which strongly warrants DCGF to determine its plans and priorities in full alignment with the upcoming opportunities and challenges. Keeping in mind the available opportunities as well as the challenges ahead, DCGF is currently working out its long-term strategic plan for upcoming 5 years. I am confident that the long-term strategic plan will guide DCGF in setting up its priorities for the upcoming days, including procedural and structural changes and the business and non-business activities necessitated for the purpose, and roll them out with more efficacy and prudence.
Considering the international best practices, BFIs’ cotemporary needs as well as DCGF’s own capability and strengths in terms of resources and logistics, DCGF has since begun the task of devising new credit guarantee schemes and making necessary revamp in its existing credit guarantee schemes.  DCGF is committed to focus more on high level of governance structure and standard so as to ensure optimum use of ICT for bringing about improvements and efficiency in overall functional scopes, capacity enhancement of employees, adoption of prudent risk management system, zero tolerance compliance culture, system and performance-oriented work environment, designing new products and impactful promotional and marketing activities, way forward.  
Lastly, I express my sincere thanks and gratitude to the BFIs for their patronage to DCGF; Chairman, Directors of the DCGF Board for their able guidance; former and incumbent staff members for their dedicated and raceless efforts to take DCGF to this stature and all other stakeholders including Government of Nepal and Nepal Rastra Bank for their continued supports and guidance. I am confident, DCGF’s corporate standing in the society as one of the robust and credible institutions of the Nepalese economy will gain additional momentum in the upcoming days, with the continued supports and patronage to DCGF from all the concerned.       

Thank you,
Ramesh Ghimire
Chief Executive Officer