NRB to examine interest rates on microloans

The NRB announced the monetary policy for the fiscal year 2024–2025 and said that interest rate and service charge regulations will be promptly reviewed.

At the moment, microloans have a maximum interest rate of 15%. However, when announcing the plan to examine the loan's rate, NRB Governor Mahaprasad Adhikari made no mention of whether to raise or lower the interest rate on microfinance loans.

The central bank created the provision at a time when there are increasing grievances that the recipients of microfinance are forced to pay astronomical interest rates and unnecessary servicing fees.

A policy framework to promote mergers and acquisitions between branches and microfinance has also been introduced by the monetary policy. The monetary policy has brought about the essential regulatory frameworks, grounded in global best practices, to safeguard microfinance clients' interests.

The monetary policy has exercised flexibility, allowing the enterprises involved to reschedule debt settlement deadlines, in an effort to provide some reprieve to microfinance borrowers. If the borrowers settle a portion of their obligations before the debt repayment period's maturity, the clause may be put into effect.