August 18: Nepal Rastra Bank (NRB) has extended the grace period for concessions and facilities given to microfinance companies opting for merger until mid-June 2024. According to the announcement made by the central bank in the monetary policy of the current fiscal year (FY), the Unified Directives 2079 has been revised to encourage merger of microfinance companies and the grace period has also been extended.

According to the instructions of NRB, if microfinance companies opt for merger or acquisition and conduct integrated business within mid-June 2024, they will get a one-year exemption on Corporate Social Responsibility while distributing dividends of more than 15 percent.

At present, if any microfinance company proposes to distribute dividends more than 15 percent annually, there is a provision that 50 percent of the proposed dividend should be allocated to the general reserve fund, 35 percent to the customer protection fund and 10 percent for CSR. In order to encourage merger of microfinance companies, the requirement to allocate funds for CSR has been relaxed.