Nonperforming loans at microfinance institutions reach Rs 50.82 billion
Summary
Nonperforming loans at Nepal’s microfinance institutions have climbed to Rs 50.82 billion, rising much faster than total lending as loan quality weakens. Nepal Rastra Bank says multiple borrowing, social obstacles to recovery and a sluggish economy are pressuring repayment capacity.
Key Points
- Nonperforming loans at microfinance institutions increased 63.83 percent in one year to Rs 50.82 billion, according to Nepal Rastra Bank.
- Total lending by retail microfinance institutions rose 10.09 percent to Rs 487.73 billion, far slower than the growth in bad loans.
- Loan loss provisions also increased sharply, with provisions against nonperforming loans rising 84.08 percent to Rs 29.42 billion.
- Despite rising bad loans, microfinance institutions’ net profit grew to Rs 10.78 billion and capital adequacy remained above minimum requirements.
