Kathmandu. Nepal Rastra Bank (NRB) has made a provision to fix the base rate for microfinance institutions. Nepal Rastra Bank (NRB) on Thursday amended÷ revised÷ amended the Unified Directive to ‘D’ category licensed microfinance institutions and made provision for fixing the base rate. Such institutions can invest in loans by adding a premium of up to 3 percent to the base rate.

According to nrb’s provisions, microfinance companies will have to determine interest rates quarterly based on the average base rate of their last three months. Similarly, the interest rate of the loan should not be more than the rate obtained by adding 9 percentage points to the last monthly average base rate of the commercial bank.

In case of loans disbursed before July 1, a maximum of 15 percent interest rate can be taken. In addition, microfinance institutions will have to prepare the base rate on a monthly basis and submit it to the Rastra Bank within 15 days and also publish it on its own website.

At the time of lending, the borrower can choose between fixed or variable interest rates. If the interest rate has to be changed, then the change in the average base rate of the last three months can be changed only without the limit. It is expected that this directive of the Rastra Bank will ensure transparency, accountability and interest of the borrowers in the microfinance sector.

Such is the arrangement of the Rastra Bank (with full text)