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Showing posts from July, 2011

Nepali social venture fund

In an effort to increase the access to finance to the rural enterprises and un banked population , the Central Bank has asked the commercial banks to earmark 3.5 % of their total loan polio to the deprived sector .Despite Central Bank’s pro financial inclusion polices and enormous opportunities in the uncharted areas ,commercial banks are reluctant to lend to the deprived sector .High per unit loan transaction expenses and risk of default are the main attributes that will make commercial banks reluctant to lend more than the obligatory 3.5% of their total loan polio. Considering , commercial banks cut throat competition and their constant battle to minimize loan loss provision and maximize the net income ,form the perspective of the commercial banks reluctantly can be rationalized .In order, to encourage the commercial banks to lend to the deprived sector ,Nepal Rastra Bank has to come out with a eff...