Latest NRB report shows soaring profits and explosive bad debt in microfinance: Everything you need to know
Summary
Nepal Rastra Bank’s latest microfinance report shows retail non-performing loans jumping above 10 percent and crossing Rs 50 billion, even as sector-wide profits rose nearly 50 percent. Ten institutions are now under supervisory action, while regulators have flagged repeated reserve breaches, weak reporting, and rising collateral-based lending.
Key Points
- Retail microfinance non-performing loans climbed from 7 percent to 10.42 percent in a year, reaching Rs 50.82 billion.
- Combined net profits of 48 retail microfinance institutions rose 48.14 percent to Rs 10.78 billion, helped by lower funding costs.
- Nepal Rastra Bank placed ten microfinance institutions under prompt corrective action for capital and regulatory shortfalls.
- Sanjeevani Microfinance was penalized for repeated cash reserve violations, excessive collateral-backed lending, and failure to submit required data.
