Laghubitta financial institutions in Nepal can now provide a much higher loan amount against collateral. Nepal Rastra Bank, in its first quarterly review of the monetary policy, has increased the maximum loan limit for collateral-based loans from laghubittas to 15 lakh rupees. Earlier, laghubittas were allowed to lend only up to 7 lakh rupees.
The central bank also said it will allow changes in the loan repayment schedule for borrowers who are struggling to pay back their loans. This move is meant to help borrowers facing repayment difficulties.
Nepal Rastra Bank explained that banks and financial institutions currently have excess liquidity, but loan flow remains low. To address this imbalance, the central bank has expanded the loan limit for laghubitta institutions as well.
