History Of Microfinance In Nepal

September 8, 2020 | Investopaper

The modern banking system was introduced in Nepal after the establishment of Nepal Bank Limited as the first commercial bank in 1994 BS. The microfinance formally started in the year 2036/37 when the Agriculture Development Bank launched the Small Farmers Development Project. Intensive banking program was started by Rastriya Banijya Bank in 2038 BS under the direction of Nepal Rastra Bank. In the year 2039 BS, the Department of Women’s Development (Government of Nepal) started credit project for rural women.

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The current microfinance loan program launched in Nepal is modeled after the program of Rural Bank Bangladesh started by Professor Mohammad Yunus. The credit for starting microfinance in Nepal goes to Dr Harihardev Pant. He was then the Deputy Governor of Nepal Rastra Bank. NRB started a microcredit program which was later called microfinance. The microfinance program was started by Grameen Bank from the government level and NGOs from the private sector. This was later transformed into the concept of Microfinance Development Bank.

At that time, microfinance banks were established under the then Development Banks Act.But now microfinance are operating under the Banks and Financial Institutions Act. As it is being operated as a bank under the Banking and Financial Institutions Act, it has to be called a microfinance financial institution instead of a bank under the same act.

From 2047 BS, Nepal Rastra Bank introduced the provision of investing 3 percent of the total loan to the poor. Non-governmental organizations and private sector started the microfinance program in the year 2048 BS. Similarly in 2049 BS, Nepal Rastra Bank along with the investment of the Government of Nepal established Eastern Rural Development Bank (‘Purwanchal Grameen Bikas Bank’) and Far Western Rural Development Bank (Sudur Paschimanchal Grameen Bikas Bank’). The establishment of these rural banks were based on the financial system of Rural Bank Bangladesh. Immediately after that, in the year 2050 BS, non-governmental organizations like Nirdhan, CSD, Chimek and other organizations started operating microfinance programs.

In the past, NRB implemented various poverty oriented loan programs such as small sector loan program, priority sector loan program, intensive banking loan program, small and home industry loan program, productive loan program for rural women through banks and financial institutions. However, these programs failed to achieve the intended objectives. Thus, the concept of microfinance programs emerged in Nepal.

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At current, 85 microfinance companies (As Of Mid July 2020) are playing a leading role in providing the microcredit services to the poor. NRB has classified the microfinance companies as ‘D’ class financial institutions. Commercial banks, development banks and finance companies of Nepal have also started focusing their business in the microfinance sector. They are offering services in the field of microfinance through branchless banking, rural branches, and various modern technologies. Various cooperatives and financial non-governmental organizations are also providing microfinance services in Nepal.

The table below presents the list of microfinance companies in Nepal along with the date of operation.

Microfinance Companies In Nepal With Date Of Operation

S.No Microfinance Companies In Nepal Operation Date (A.D.)
1 Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd. 7/17/1999
2 RMDC  Laghubitta Bittiya Sanstha Ltd. 12/6/1999
3 Deprosc  Laghubitta Bittiya Sanstha Ltd. 7/3/2001
4 Chhimek Laghubitta Bittiya Sanstha Ltd. 12/10/2001
5 Shawalamban Laghubitta Bittiya Sanstha Ltd. 2/22/2002
6 Sana Kisan Bikas  Laghubitta Bittiya Sanstha Ltd. 3/11/2002
7 Nerude  Laghubitta Bittiya Sanstha Ltd. 6/15/2007
8 Naya Nepal Laghubitta Bittiya Sanstha Ltd. 3/20/2009
9 Mithila Laghubitta Bittiya Sanstha Ltd. 4/29/2009
10 Summit Laghubitta Bittiya Sanstha Ltd. 5/20/2009
11 Sworojagar Laghubitta Bittiya Sanstha Ltd. 12/16/2009
12 First Microfinance Laghubitta Bittiya Sanstha Ltd. 12/28/2009
13 Nagbeli Laghubitta Bittiya Sanstha Ltd. 2/4/2010
14 Kalika Laghubitta Bittiya Sanstha Ltd. 2020/01/08*
15 Mirmire Laghubitta Bittiya Sanstha Ltd. 9/23/2010
16 Janautthan Samudayik Laghubitta Bittiya Sanstha Ltd. 11/9/2010
17 Womi Laghubitta Bittiya Sanstha Ltd. 2019-12-16*
18 Laxmi Lighubitta Bittiya Sanstha Ltd. 6/4/2012
19 Civil Laghubitta Bittiya Sanstha Ltd. 7/5/2012
20 Mahila Sahayatra Laghubitta Bittiya Sanstha Ltd. 12/25/2012
21 Vijaya Laghubitta Bittiya Sanstha Ltd. 3/28/2013
22 NMB Laghubitta Bittiya Sanstha Ltd. 3/31/2013
23 FORWARD Community Microfinance Bittiya Sanstha Ltd. 5/17/2013
24 Global IME Laghubitta Bittiya Sanstha Ltd. 5/19/2013
25 Mahuli Laghubitta Bittiya Sanstha Ltd. 6/15/2013
26 Suryodaya Laghubitta Bitiya Sanstha Ltd. 2020/02/22*
27 Meromicrofinance Laghubitta Bittiya Sanatha Ltd. 7/18/2013
28 Samata Laghubitta Bittiya Sanatha Ltd. 8/25/2013
29 RSDC Laghubitta Bitiya Sanstha Ltd. 9/11/2013
30 Samudayik Laghubitta Bitiya Sanstha Ltd. 4/13/2014
31 National Microfinance Laghubitta Bittiya Sanstha Ltd. 7/2/2014
32 Grameen Bikas Laghubitta Bittiya Sanstha Ltd. 2014/8/15*
33 Nepal Sewa Laghubitta Bittiya Sanstha Ltd. 10/26/2014
34 Unnati Sahakarya Laghubitta Bittiya Sanstha 2020/07/10*
35 Swadeshi Lagubitta Bittiya Sanstha Ltd. 12/31/2014
36 NADEP Laghubitta Bittiya Sanstha Ltd. 5/15/2015
37 Support Microfinance Bittiya Sanstha Ltd. 7/12/2015
38 Aarambha Chautari Laghubitta Bittiya Sanstha 1/3/2016
39 Ghodighoda  Laghubitta Bittiya Sanstha Ltd. 6/12/2016
40 Asha Lagubitta Bittiya Sastha Ltd. 8/29/2016
41 Nepal Agro Microfinance Bittiya Sastha Ltd. 9/20/2016
42 Gurans LaghuBitta Bittiya Sastha Ltd. 11/16/2016
43 Ganapati Microfinance Bittiya Sastha Ltd. 12/9/2016
44 Infinity Laghubitta Bittiya Sanstha Ltd 1/20/2017
45 Adhikhola Laghubitta Bittiya Sanstha Ltd. 2/12/2017
46 Swabhiman Laghubitta Bittiya Sanstha Ltd. 5/22/2017
47 Sparsha Laghubitta Bittiya Sanstha Ltd. 7/13/2017
48 Sabaiko Laghubitta Bittiya Sanstha Ltd. 7/14/2017
49 Sadhana Laghubitta Bittiya Sanstha Ltd. 10/30/2017
50 NIC Asia Laghubitta Bittiya Sanstha Ltd. 11/21/2017
51 Sarathi Laghubitta Bittiya Sanstha Ltd. 2019-12-20*
52 Manakamana Laghubitta Bittiya Sanstha Ltd. 2/18/2018
53 Sajeelo Laghu Bitta Bittiya Sanstha Ltd. 2/7/2018
54 Buddha Jyoti Laghubitta Bittiya Sanstha Ltd. 6/20/2018
55 Samaj Laghubitta Bittiya Sanstha Ltd. 5/15/2018
56 Grameen Swayamsewak Laghubitta Bittiya Sanstha Ltd. 10/1/2018
57 Mahila Laghubitta Bittiya Sanstha Ltd. 10/18/2018
58 Manushi Laghubitta Bittiya Sanstha Ltd. 11/17/2018
59 Adarsha Laghubitta Bittiya Sanstha Ltd. 12/16/2018
60 Unique Nepal Laghubitta Bittiya Sanstha Ltd. 12/16/2018
61 Smart Laghubitta Bittiya Sanstha Ltd. 2/10/2019
62 Mahila Samudayik Laghubitta Bittiya Sanstha Limited 2/27/2019
63 Jalpa Laghubitta Bittiya Sanstha Limited 3/15/2019
64 Solve Laghubitta Bittiya Sanstha Limited 2/13/2019
65 Rastra Utthan Laghubitta Bittiya Sanstha Limited 2/20/2019
66 WEAN Laghubitta Bittiya Sanstha Limited 4/8/2019
67 Upakar Laghubitta Bittiya Sanstha Limited 3/27/2019
68 Dhaulagiri Laghubitta Bittiya Sanstha Limited 2/19/2019
69 CYC Nepal Laghubitta Bittiya Sanstha Limited 3/15/2019
70 NESDO Samriddha Laghubitta Bittiya Sanstha Limited 3/5/2019
71 Swastik Laghubitta Bittiya Sanstha Limited 3/26/2019
72 Garibi Nyunikaran Laghubitta Bittiya Sanstha Limited 3/11/2019
73 Shrijanshil Laghubitta Bittiya Sanstha Limited 3/15/2019
74 NRN Laghubitta Bittiya Sanstha Limited 2020/07/13*
75 Jiban Bikash Laghubitta Bittiya Sanstha Limited 2/28/2019
76 Gharelu Laghubitta Bittiya Sanstha Limited 3/12/2019
77 Janakpur Laghubitta Bittiya Sanstha Limited 3/15/2019
78 BPW Laghubitta Bittiya Sanstha Limited 4/15/2019
79 Aatmanirbhar Laghubitta Bittiya Sanstha Limited 4/15/2019
80 Shaligram Laghubitta Bittiya Sanstha Limited 8/20/2019
81 Super Laghubitta Bittiya Sanstha Limited 1/15/2020
82 Aviyan Laghubitta Bittiya Sanstha Limited 12/17/2019
83 Deurali Laghubitta Bittiya Sanstha Limited 1/25/2020
84 Nawa Kiran Laghubitta Bittiya Sanstha Limited 3/15/2020
85 Khaptad Laghubitta Bittiya Sanstha Limited 7/31/2020

*Joint Operation After Merger

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