KATHMANDU, Nov 26: There is a sharp rise in cases of financial fraud related to microfinance institutions (MFIs), with the government authority recording 456 new cases just in the past 10 days.
The records with the Credit Information Bureau of Nepal (CIBN) show that the blacklisted individuals and organizations in microfinance related offenses were recorded at 14,751 individuals as of Tuesday, up from 14,295 as of mid-November this year. The CIBN has been recording blacklisted microfinance related cases separately since the past three years.
Many entrepreneurs have been struggling to pay back banks’ loans, while they have been facing the check bounce cases due to ongoing economic slowdown. The impacts of Gen Z movement and violence have further worsened the situation.
12,872 individuals accused of banking offense blacklisted in th...
Time and again, the MFIs are blamed for charging excessive amounts from borrowers. Citing the increasing complaints, the central bank has been carrying out inspections of the related details of the MFIs.
As per the Nepal Rastra Bank (NRB) rules, the MFIs can charge a maximum of 1.5 percent of the issued loans per year from the service seekers. Breaching the regulator’s guideline, a number of MFIs have been found taking service charges up to four times a year.
According to an official of a MFI, there are growing cases of defaulting loans also in the MFIs mainly after the Gen Z movement.
Meanwhile, the CIBN registered an additional 14,315 individuals and organizations in blacklist under the financial offense in the first four months of the current fiscal year (FY). Bijay Kunwar, spokesperson of the CIBN, said a total of 4,588 individuals and organizations were recorded in blacklists in offense of cheque bounce.
As of now, the CIBN has recorded 196,932 individuals and organizations in blacklists. Speaking at a program two weeks ago, NRB Governor Poudel termed the number of soaring cases of blacklisting an ‘unusual.’
Poudel said that the criminalization of individuals in cheque bounce has led to the cases of blacklisting. He also expressed concern to review the provision of loan loss provisions that have created pressure on banks to blacklist individuals amid growing cases of non-payment of bank loans.
