September 23, 2021 | Investopaper
Micro-Financial Institutions (MFIs) have invested about 45 percent of their total credit in agriculture. According to the Nepal Rastra Bank (NRB), the MFIs operating in Nepal have disbursed Rs 365 billion as loans and advances till the last fiscal year. Out of this, about 44.82 percent or Rs 163 billion have flowed to the agricultural sector. After agriculture, 31.34 percent of the total microfinance credit is in the service sector.
The investment in agriculture has increased after the central bank directed MFIs through monetary policy to float at least one-third of the total credit in the agricultural sector.
The number of MFIs is declining due to mergers. There were 84 microfinance institutions in operation till 2077 BS, but it has been reduced to 70 by 2078 BS. Of these, four are wholesale microfinance companies and the remaining 66 are retail companies. Although the number of MFIs has decreased, the number of branches has increased. The number of branches has reached 4,621
The total credit flow has increased to Rs 365.55 billion by Ashad’s end 2078 BS that stood at Rs 262.73 billion at the end of Ashad, 2077 BS.