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Impact of Covid-19 on Microfinance Institutions of Nepal

Author

Listed:
  • Prakash Shrestha Ph.D.

    (Nepal Rastra Bank)

Abstract

Nepal has also been impacted by the spread of Covid-19 which was originated in China in late December 2019. The spread of pandemic has both health and economic effect in any country. This paper aims to assess the impact of Covid-19 pandemic on microfinance institutions in Nepal based on the data reported by them as per the regulatory requirement. Assessment is done by evaluating the changes in some major financial indicator such as saving, loans, non-performing loans, profitability, change in the number of employees and borrowers among others after the imposition of lockdown measures by the Government to contain the spread of coronavirus. Review of data for the period of mid-March 2020 to mid-July 2020 shows that microfinance institutions have severely been hit by the lockdown measures. However, with the help of NRB policy provisions and some degree of resiliency, they managed to survive during the review period. Since the spread of Covid-19 is yet to over, downside risks still exist as shown by the growing number of overdue borrowers. Concrete, collaborative and innovative approaches are needed to navigate through this troubled times.

Suggested Citation

  • Prakash Shrestha Ph.D., 2020. "Impact of Covid-19 on Microfinance Institutions of Nepal," NRB Working Papers 51/2020, Nepal Rastra Bank, Economic Research Department.
    • Handle: RePEc:nrb:wpaper:nrbwp202051
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    References listed on IDEAS

    as
    1. Brainerd, Elizabeth & Siegler, Mark V, 2003. "The Economic Effects of the 1918 Influenza Epidemic," CEPR Discussion Papers 3791, C.E.P.R. Discussion Papers.
    2. Kashif Malik & Muhammad Meki & Jonathan Morduch & Timothy Ogden & Simon Quinn & Farah Said, 2020. "COVID-19 and the future of microfinance: evidence and insights from Pakistan," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(Supplemen), pages 138-168.
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    More about this item

    Keywords

    Covid-19; Microfinance Institutions;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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