March 6: Nepal Rastra Bank has constituted a high-level committee to study problems seen in microfinance companies in the country. 

Microfinance companies have been facing allegations of charging exorbitant interest and behaving badly with customers for the past a few months. 

Microfinance companies, however, deny such allegations and claim that some loan shark groups used to issuing credit on meter interest have spread rumour. 

“NRB has constituted the high-level committee to carry out study on microfinance companies’ current situation and their contribution to economy,” said a source at NRB.

The committee headed by Executive Director Prakash Kumar Shrestha of NRB Research Department has seven members. Committee members include Nepal Microfinance Banker’s Association’s chairman, two independent experts and four high-level officers from Nepal Rastra Bank.

The committee will submit its report within six months. Microfinance companies have been in the forefront to enhance income of backward and low-income families across the country. 

Since the government does not have set indicators to check microfinance companies’ contribution for poverty alleviation, it has been difficult to determine their role for poverty alleviation in Nepal.