October 10: The number of people receiving microfinance service has crossed the mark of 5.8 million. The customer base of microfinance companies has increase due to expansion of branches resulting in wider access to microfinance services.

According to the annual survey report on microfinance sector prepared by Nepal Rastra Bank, the customers of microfinance companies increased by 669,000 in a year.

The number of customers of microfinance companies was 5,191,000 by the end of Fiscal Year 2020/21, which increased to 5,860,000 by the end of last fiscal year (FY 2021/22), the survey report states.

Although the number of microfinance companies is declining due to merger and acquisition, the general public’s access to finance is increasing due to expansion of branches of such companies.

There were 70 microfinance companies by the end of Fiscal Year 2020/21. The number of microfinance companies stands at 65 as of the end of last fiscal year.

However, the branches of microfinance companies increased by 9.54 percent in the review period and currently stands at 5,062, the NRB report states.

Microfinance companies give priority to ensure access to finance to the people who are unable to get access to banks and financial institutions. Microfinance companies form groups of deprived sector community and provide loans without any collateral.

Microfinance companies can provide loans up to Rs 700,000 to the people of the deprived sector without any collateral on the assurance of the group while such people can avail up to Rs 1.5 million by keeping their property as collateral.

The number of people taking loans from microfinance companies has increased by 10.4 percent as of mid-July this year compared to the same period last of last fiscal year. The total number of people who have taken loans from microfinance companies stands at 3.3 million.