NRB expands digital lending, raises cap to NRs one million for MSMEs

Nepal Rastra Bank (NRB) has increased the maximum digital loan limit from NRs 500,000 to NRs one million by revising its Digital Lending Guidelines 2021.

The revised framework is designed to improve access to financing for micro, small, and medium-sized enterprises (MSMEs), allowing eligible businesses to obtain up to NRs one million in digital loans for long-term working capital requirements.

For individual borrowers, individuals with salary, professional, or business income accounts can access digital loans of up to NRs 500,000 with repayment terms of up to three years.

Other individuals may borrow up to NRs 200,000 for the same period.

MSMEs can obtain up to NRs 500,000 for short-term working capital needs, repayable within one year. 

For long-term working capital financing, the maximum digital loan amount has been increased to NRs one million, with repayment periods determined by the lending institution's policies.

Under the new provisions, banks and financial institutions can assess borrowers using digital transaction records, payment histories, and other business-related data. Payment service providers and technology companies may also support credit analysis and loan processing, subject to customer consent and data privacy requirements.

NRB stated that banks may provide loans to merchants affiliated with payment service providers, while risk management responsibilities will remain with the lending institutions. Formal agreements governing data sharing, customer consent, confidentiality, and data authenticity will be required, and such arrangements must be reported to the central bank.

The central bank expects the revised guidelines to expand digital credit access and support the growth of small and medium-sized businesses across Nepal.

The central bank introduced its digital lending guidelines in June 2022, allowing customers with salary, professional, and business income accounts to access digital loans of up to Rs 500,000. The latest revision expands both the scope of eligible borrowers and the maximum loan limit.