Kathmandu. Nepal Rastra Bank (NRB) has introduced a new provision for merger of microfinance institutions.
The central bank has amended the Integrated Directive for Microfinance Financial Institutions (MFIs) and made a new provision in the merger process. The amended directive states that if the integrated transaction is operated after the merger process between the wholesale loan provider microfinance and the microfinance company doing retail business, such microfinance institutions should operate only as microfinance doing retail transactions.
Provided that, this provision shall not be deemed to have prevented the wholesale loan from operating for 5 years from the date of merger/merger and acquisition process and operation of integrated transactions.
As per the earlier directive, a microfinance company can function as a microfinance institution with retail transaction if it participates in the merger/merger process and acquisitions of wholesale lending provider microfinance and retail microfinance. “However, this provision shall not be deemed to have hindered the recovery of loans as per the payment schedule as per the previous payment schedule in the case of loans issued by the wholesale lending provider microfinance and before the merger and receivable,” it was stated.
