Microfinance borrowers land on blacklist as sources dry up
Summary
Thousands of microfinance borrowers in Nepal are being blacklisted as weak incomes, tighter lending rules and aggressive multiple lending leave them unable to repay. Critics say the sector has drifted from its original purpose of supporting low-income households and small businesses.
Key Points
- More than 21,500 borrowers were blacklisted in fiscal 2025-26, with microfinance clients accounting for about 36 percent of all blacklisted borrowers.
- Experts blame sluggish economic activity, tighter Nepal Rastra Bank rules, multiple lending and poor borrower screening for the crisis.
- Borrowers say they were pushed into taking one loan to repay another, while some allege intimidation and seizure of household goods by lenders.
- Microfinance operators and bankers admit the sector expanded aggressively and increasingly prioritized profits over borrower support.
