Kathmandu. Lately, questions have been raised about microfinance institutions established with the aim of encouraging low-income households to invest in productive work to avoid small financial hardships.
Complaints have started coming in that the government has not opened the microfinance institutions with the purpose, meaning and spirit. Recently, there have been reports that especially women in rural areas have become victims due to microfinance.
Microfinance victims are complaining that there is an increasing tendency of microfinance institutions to charge high service charges, high interest rates, and to collect goods to collect installments. It has also been claimed that families who take loans from microfinance have reached a state of disaster.
Along with this, the National Bank has also tightened the loan disbursement since it cannot charge one and a half percent more in the service fee. Vasant Lamsal, the outgoing president of the Microfinance Bankers Association, says that the current problem has arisen when the National Bank grants licenses to many microfinance institutions without looking at the needs of microfinance.
He said that it is wrong for microfinance to collect house rents and belongings in the name of debt recovery, and it is necessary to review microfinance and move forward. He concluded that it is wrong to point the finger at microfinance and say that they will not repay the loan.
