Members of the Nepal Communist Party reportedly placed locks on the doors of two microfinance institution (MFI) branch offices in the western Nepali province of Sudurpaschim. Access to a third branch in the province also was blocked before police removed the unauthorized padlocks.
Leaders of the youth group involved with at least two of the protests argued that the MFIs were “causing mental stress and suffering to borrowers by issuing loans at extremely high interest rates.” Another accusation is that “microfinance companies don’t consider the financial condition of borrowers and whether they have already taken loans from other companies before they provide loans to customers.”
One borrower, Juna Sunar, reportedly has loans due to 13 MFIs and said, “They come almost everyday asking for payment of instalment, but I have been sending them away, saying I will pay them when I have money.”
The MFIs whose branches were temporarily blocked include National Microfinance Laghubitta Bittiya Sanstha and Nirdhan Microfinance Laghubitta Bittiya Sanstha. Both institutions offer loans, savings, insurance and remittances as well as financial literacy and other training services.
National Microfinance operates 101 branches and reports quarterly profit of NPR 162 million (USD 1.2 million) on total assets of NPR 12 billion (USD 91 million) as of January 2023. As of March 2023, Nirdhan reports serving 400,000 clients via 185 branches, generating quarterly profit of NPR 136 million (USD 1.0 million) on total assets of NPR 30 billion (USD 228 million).
By Renata Samadova, Research Associate
Sources and Additional Resources
The Himalayan Times article
https://thehimalayantimes.com/nepal/microfinance-branch-offices-padlocked-one-after-another-in-sudurpaschim-province
National Microfinance homepage
https://nationalmicrofinance.com.np/
Nirdhan homepage
https://www.nirdhan.com.np/
Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Download a sample at https://www.microcapital.org/products-page/.
Similar Posts:
- MICROCAPITAL BRIEF: Credit Café Africa, Sterling Bank Partner on $22m in Loans for Providers of Health, Education in Nigeria
- MICROCAPITAL BRIEF: Regulator Licenses ADIB Egypt to Open Shariah-compliant Subsidiary, ADI Microfinance
- MICROFINANCE PAPER WRAP-UP: “Impact of Microcredit on Household Consumption and Assets in Nepal;” by Shalik Ram Pokhrel
- MICROCAPITAL BRIEF: CRDB Bank Burundi Borrows $5m from IFC for Agricultural Microfinance, SME Lending
- MICROCAPITAL BRIEF: First City Monument Bank of Nigeria Offers Asset Financing Starting at $600
