KATHMANDU: Nepal Rastra Bank (NRB) has stated that the status of microfinance institutions in the country was deteriorating due to their excessive focus on profitmaking, poor internal control mechanism and poor institutional governance.

Likewise, lack of training for the employees, heavy concentration of microfinance institutions in the urban areas and limited access to the rural community are identified as some of the challenges of this sector.

The NRB stated that excessive loans to a few clients, excessively expanded systems, weak institutional governance, failing credit discipline, economic slowdown and deviation from the organizational goals have created problems and pressures on the microfinance sector.

It has also offered more than 180 recommendations in 20 main themes for short-term, mid-term and long-term.