Microfinance Borrowers Facing Hardships Eligible for Loan Restructuring Until Chaitra 2080, Following NRB Directives

In the wake of the latest monetary review, Nepal Rastra Bank (NRB) has issued vital directives, emphasizing the implementation of measures that primarily target loan restructuring within the microfinance sector.

In response to the ongoing economic challenges faced by borrowers, microfinance financial institutions have been granted permission to restructure or refinance loans, providing much-needed relief to those struggling to meet repayment obligations.

Borrowers seeking loan restructuring or refinancing must submit their applications by the end of Chaitra 2080, with the entire process expected to be concluded by the end of Baisakh 2081. Loans classified under active categories as of Asadh 2080 are eligible for restructuring, with an extension of the repayment period of an additional one year.

Loans that undergo restructuring will benefit from a 5% interest subsidy arrangement to alleviate the financial burden on borrowers. Each loan file must include clear criteria for restructuring or refinancing, ensuring transparency and adherence to the established guidelines.

Until the day of loan restructuring or refinancing, the interest rate on remaining overdue interest should not exceed 5% above the prevailing interest rate. When restructuring or refinancing loans, any remaining overdue interest can be capitalized and recovered as part of the principal amount.