Demand of Nepal Bankers Association to maintain uniformity in the credit limit of the poor
Kathmandu. The Microfinance Bankers Association has sent suggestions for the monetary policy for the coming fiscal year 2078/79 with the demand to issue right shares. The Nepal Bankers’ Association, an umbrella organization of microfinance institutions, has demanded the issuance of rights shares, extension of loan repayment period and easing of loan provision to encourage mergers.
It has demanded that there should be uniformity in the definition of poor class loans and the working procedures of microfinance financial institutions and other banks and financial institutions regarding collateral and unsecured loans. At present, banks and financial institutions are investing with the collateral of the poor as collateral, but microfinance has to invest without collateral, he said. In order to make the merger and merger of microfinance institutions more effective, the association has demanded that right shares should be issued after the merger according to the condition of capital adequacy. To encourage the merger, to give concession in profit tax, as per the proposal submitted to Nepal Rastra Bank, after the merger of the branches, the merger of the branches should not be re-approved. Demand union Has done
The association has proposed to promote microfinance institutions in a specialized manner so that the poor class loans can flow only from microfinance institutions.
Basanta Lamsal, president of the association, said that in order to reduce the impact of COVID-19, the repayment period of interest and installment should be extended up to six months at a time.
The association has demanded to set up a special microfinance fund to manage the financial resources of microfinance, to count only the wholesale loans given to commercial microfinance by the commercial banks and finance companies as poor class loans. Similarly, the association has demanded that the microfinance institution should be allowed to issue financial instruments including rights and bonds by setting criteria.
The association has demanded that banks and financial institutions be allowed to provide loans to microfinance institutions voluntarily even below the base rate as the risk burden is 20 percent.
Apart from this, the association has suggested that the Citizens ‘Investment Fund, Employees’ Provident Fund and insurance companies also make arrangements to invest in concessional loans to microfinance.
The association has demanded to increase the limit of loans to invest in collateral to 50 percent and to provide loans up to Rs 2.5 million per person with collateral and to fix the base interest rate in microfinance as well.