Govt, microfinance victims sign six-point agreement

KATHMANDU: The government has signed a six-point agreement with agitating microfinance victims.

The agreement was reached during talks held at the finance ministry on Friday. Narayan Prasad Rijal and Puna Ram Gywali signed the agreement on behalf of the government and the victims, respectively. After signing the agreement, the victims have withdrawn all their protest programs.

According to the agreement, the finance ministry will write to the central bank to study international practices and recommend measures to make microfinance institutions more service-oriented.

Likewise, the government has agreed to strictly enforce a provision that bars microfinance institutions from charging interest rates and service charges higher than the prescribed maximum ceiling and extending group loans higher than the prescribed limit. Both parties have agreed to initiate action against microfinance institutions that have been flouting these norms.

Similarly, the government has expressed commitment to strictly implement the provision that bars borrowers from taking credit from more than one microfinance institution.

Additionally, it has agreed to stop practices like requiring borrowers to deposit a certain percentage of their credits in deposit accounts and making them pay installments while sanctioning credit.

Furthermore, the government has decided to write to the central bank to make necessary arrangements for microcredit institutions to provide financial literacy sessions for borrowers.