KATHMANDU, Feb 14: Profit earnings of microfinance institutions (MFIs) jumped by an impressive 89.10 percent in the past year due to the reduction in borrowing costs caused by the fallen interest rates of banks.
According to records with the Nepal Rastra Bank (NRB), 50 MFIs earned net profits of Rs 4.79 billion as of mid-January of the current Fiscal Year (FY). In the same period of last FY, it stood at Rs 2.53 billion.
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Chhimek Laghubitta Bittiya Sanstha recorded a net profit of Rs 576.09 million, up 12.55 percent, during mid-July 2025 and mid-January 2026. Deprosc Laghubitta Bittiya Sanstha earned a profit of Rs 442.91 million and stood in second position, with an increase of 80.30 percent.
The whopping rise in MFIs' profits has been attributed to a sharp reduction in interest rates at banks and financial institutions (BFIs). Compared to the base rate of around 10 percent in the review month last year, it has almost halved, with the BFIs failing to increase loan investment.
