Question 1

Under Nepal Rastra Banku2019s classification of banks and financial institutions, microfinance financial institutions (laghubitta) fall under which class?

Accepted Answer

Class D \u2014 Commercial banks are Class A, development banks Class B, finance companies Class C, and microfinance financial institutions are Class D under NRBu2019s licensing framework.

Question 2

As reported in NRBu2019s Financial Stability Report, what is the regulatory minimum share of total credit that banks and financial institutions (BFIs) must direct to the deprived sector?

Accepted Answer

5 percent \u2014 NRBu2019s deprived sector lending requirement is a minimum of 5 percent of total credit, a threshold BFIsu2019 actual lending has generally exceeded.

Question 3

Effective from Shrawan 2082 (mid-July 2025), how do microfinance institutions in Nepal now determine the maximum interest rate they can charge borrowers?

Accepted Answer

Their own quarterly base rate plus a premium of up to 3 percentage points \u2014 NRB replaced the old flat interest-rate ceiling with a base-rate-plus-premium system, capping the premium each institution can add to its own base rate at 3 percentage points.

Question 4

Before the policy change of mid-2025, what was the maximum interest rate cap NRB had set on microfinance lending since 2073 B.S. (2016/17)?

Accepted Answer

15 percent \u2014 NRB had capped microfinance lending rates at a maximum of 15 percent before moving to the market-based base-rate system.

Question 5

The Grameen-style group-lending model used by many Nepali microfinance institutions primarily replaces which traditional loan requirement?

Accepted Answer

Collateral security, using joint liability and peer monitoring within the group instead \u2014 In group lending, members jointly guarantee each otheru2019s loans, so peer monitoring and social pressure substitute for the physical collateral a bank would normally require.

Question 6

Group-lending microfinance programs in Nepal, modeled on the Grameen approach, have been primarily targeted at which group?

Accepted Answer

Rural poor women organized into small groups \u2014 The Grameen-style model, as adopted by Nepali microfinance institutions such as Nirdhan Utthan, centers on organizing rural poor women into small groups for self-employment lending.

Question 7

What is the primary purpose of Know Your Customer (KYC) procedures at a microfinance institution?

Accepted Answer

To verify a customeru2019s identity and assess risk, helping prevent fraud and money laundering \u2014 KYC procedures confirm who a customer is and assess associated risk, a core control against fraud and money laundering.

Question 8

A borrower takes a flat-rate loan of Rs 20,000 at 10 percent per annum simple interest for 2 years. What total interest is payable at maturity?

Accepted Answer

Rs 4,000 \u2014 Simple interest = Principal u00d7 Rate u00d7 Time = 20,000 u00d7 0.10 u00d7 2 = Rs 4,000.

Question 9

Which institution is Nepalu2019s central bank and the primary regulator of all banks and financial institutions, including microfinance companies?

Accepted Answer

Nepal Rastra Bank (NRB) \u2014 Nepal Rastra Bank is the central bank responsible for licensing and regulating all classes of BFIs, including Class D microfinance institutions.

Question 10

Deprived sector lending in Nepal is specifically aimed at extending small loans to which group of beneficiaries?

Accepted Answer

Low-income, marginalized groups such as women, Dalits, indigenous communities, and small farmers running micro-enterprises \u2014 Deprived sector lending rules direct BFIs to extend micro-loans to low-income and marginalized groups for self-employment and micro-enterprise activities.

Microfinance (Laghubitta) Officer Exam — Practice Quiz

Microfinance (Laghubitta) Officer Exam — Practice Quiz

More Microfinance (Laghubitta) Officer Exam Practice Sets

Microfinance (Laghubitta) Officer Exam — Practice Quiz