Kathmandu. Microfinance financial institutions have allocated Rs 37.19 billion for loan loss management till Ashad 2083.

According to the Nepal Rastra Bank, the ratio of non-performing loans to the total loans of microfinance institutions is 9.78 percent. For non-performing loans, the loan loss provision of 5.79 percent of the total loans has been maintained.

According to the NRB, the loan loss of Rs 37.19 billion as of mid-July 2019 stood at 6.96 per cent of the total outstanding loans and 71.20 per cent of the total non-performing loans.

According to the unified directive of the Nepal Rastra Bank, microfinance institutions have to maintain a 25, 50 and 100 percent loss provision by categorizing the non-performing loans into weak, doubtful and bad loans, respectively. In the case of loans secured from the Deposit and Credit Guarantee Fund, the provision of 25 percent loss should be maintained.

Similarly, the NRB has stated that the loan loss provision has been maintained in the restructured and rescheduled loans as stipulated in the directive.