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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