Central Bank Prioritizes Microfinance Mergers in Monetary Policy

The recently announced monetary policy by Nepal Rastra Bank prioritizes the merger of microfinance institutions. The policy aims to encourage mergers and acquisitions among microfinance institutions and their branches, with a focus on protecting customer interests through regulatory measures aligned with international best practices.

Key Points:

• Merger Encouragement: The policy promotes mergers and acquisitions among microfinance institutions and their branches.

• Customer Interest Protection: Regulatory measures will be implemented to protect customer interests based on international best practices.

• Interest Rate Review: A contemporary review of regulatory measures related to interest rates and service charges for loans provided by microfinance institutions will be conducted.

• Loan Restructuring: Provisions for loan restructuring will be made for customers unable to repay loans due to circumstances, allowing them to restructure their loans by paying a certain percentage of the interest.

• Provincial Operational Area: Additional measures will be introduced to encourage microfinance institutions operating within a specific province or area.

• Implementation of NFRS: Necessary arrangements will be made to implement the Nepal Financial Reporting Standards (NFRS) across all microfinance institutions.