2012 Nepal Snapshot

This Microfinance Information Exchange (MIX) presentation provides a snapshot of Nepal's microfinance sector for 2012. It examines the growth of the sector in terms of profitability, efficiency, funding, and risk.The data is based on the report submitted by 37 Nepali MFIs in 2011. The presentation states that at a South Asia level, Nepal contributes 2% of the total MFI borrowers. Other key points include:

• Average loan size is NPR 21,671 and rising;
• Loan portfolio has increased by 37%, number of borrowers by 9%, deposits by 53%, and depositors by 40%;
• Rural banks are the primary drivers of this growth;
• Average loan balance has grown by 40% from 2009 to 2011;
• Return on assets (ROA) and return on equity (ROE) are also steadily rising, with Nepal standing third in a list of top ten countries in terms of ROE;
• Costs of funds are increasing for MFIs, but yields are rising in tandem;
• Some institutions are now allowed to mobilize public deposits;
• Domestic borrowings and deprived sector lending still play a key role;
• Portfolio at risk (PAR) has decreased dramatically from 2008 to 2011.