Microfinance firms hope for reimbursement of loans to be waived

Priyanka Jha
ShareSansar, May 27:

In a bid to ease the financial burden on the earthquake survivors, the government had announced to waive loans of up to Rs 50,000 taken out from microfinance companies by earthquake affected borrowers.

But the decision has made microfinance companies jittery as the government has maintained silence around how the microfinance companies would recover the waived amount.  

Dharma Raj Pandey, the president of Microfinance Bankers’ Association, the government has not yet issued a formal notification on reimbursing the waived amount to microfinance companies. “In 2065/66 the government had reimbursed loans waived by banks, so, if such a decision is taken this time around, too, it would not be an unusual step,” said Pandey.

Tejendra Sharma Lamsal, CEO of Clean Village Microfinance Bittiya Sanstha Limited, also said that neither the government nor the Nepal Rastra Bank has issued a circular on the matter.

“Although the NRB and Finance Ministry officials are sitting together to prepare a work procedures on loan waiver for quake-affected borrowers within 14 days, there have been no talks about how much of the waived amount would be reimbursed to microfinance companies,” said Lamsal.

Several microfinance company officials interviewed by ShareSansar.com a few weeks ago said that they have already communicated to the concerned authorities through Microfinance Bankers’ Association that they would not be able to recover losses on their own if some kind of support is not extended to them by the commercial banks, the NRB or through some other mechanism.