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Loan Products and Interest Rate

The loan products have been briefly described below.

Microfinance Operation Loan
Microfinance Operation Loan is the main loan product of RMDC offered to retail MFIs. The purpose of the loan is to finance a broad range of income-generating activities of the ultimate borrowers who mainly comprise the poor women who need relatively less amount of loans for initiating income generating activities. With this loan fund, an MFI may disburse up to Rs.100,000 to a borrower as per the client’s need and capacity to utilize the loan.

Microfinance Promotion Loan
The main purpose of the Microfinance Promotion Loan is to promote small microfinance institutions to commence microfinance operations. This loan product is targeted at the MFI which have not outreached over 10,000 clients yet and have not borrowed any loans from any other banks or financial institutions except from the Nepal Rastra Bank (the central bank of Nepal).

Micro-enterprise Loan
RMDC offers Micro-enterprise Loan to its partner MFIs to finance micro - and small enterprises (MSEs) for their graduated clients. Receiving this loan fund, an MFI may disburse up to Rs. 300,000 to a graduated client. Generally, an MFI takes physical collateral against the loan from the clients.

Bridge Loan
This is a short term loan provided to current POs to fulfill its urgent need of fund while loan application for a new loan is under the process of approval at RMDC. This loan is later adjusted with the main loan when it is approved. An MFI can obtain 20% of its outstanding loan amount with RMDC under this loan and the term of this loan product is up to six months. To avail this loan facility from RMDC, a PO should have utilized at least three loan facilities and have maintained a good track record.

Special Loan
RMDC has introduced this loan product to solve a liquidity problem of its partner MFIs. A partner MFI of RMDC can apply for this loan facility as and when it needs and can repay the whole loan amount in one installment or in a number of installments as agreed within its maximum term of one year. The amount of this loan an MFI can obtain is upto 10% of its current loan outstanding with RMDC. To avail this loan facility, partner MFIs should have already utilized at least five loan facilities from RMDC and have fulfilled all those criteria required for borrowing a Bridge loan.

Seed Fund Loan
In view of the fact that the people in the remote hills and mountain areas of the country have very limited access to microfinance services, RMDC has been offering a special loan product “Seed Fund Loan” to MFIs operating in the nineteen remote hills and mountain districts in the country, namely Achham, Bajhang, Bajura, Bhojpur, Darchula, Dolpa, Humla, Jajarkot, Jumla, Kalikot, Khotang, Manang, Mugu, Mustang, Okhaldhunga, Sankhuwasabha, Solukhumbu, Taplejung and Tehrathum.

Under this scheme, RMDC provides a loan fund up to one million rupees to a local microfinance cooperative or an MFI branch which is operating in any of the aforementioned districts. It is hoped that this soft loan will help an MFI to meet at least two local staff cost and to have a marginal surplus to conduct its operation.

Agriculture Loan
This loan product is offered to the retail MFIs to cater the needs of clients for agriculture crops. The loan specially focuses on the agriculture sector. It will help to increase the agriculture productivity.

Livestock & Poultry Loan
This loan is for the promotion and development of the livestock and poultry business of the country. It is provided to the MFIs to lend to their clients for livestock and poultry related business and industry such as goat rearing, buffalo rearing, fish farming, pig farming, veterinary shop etc.

Clean Energy Loan
The main purpose of introducing this loan product is to promote natural and environmental conservation through microfinance. Balance environment contribute a lot on poverty reduction but much efforts in this line have not seen in the microfinance sector, so RMDC add this new loan product to cater the growing needs of energy finance. The partner MFIs disburse this loan to their clients in the areas of environmental conservation such as - bio-gas, solar, improved cooking stove, micro hydro-electricity etc.

Housing Loan
This loan is provided to the MFIs to provide housing loan to their clients. Through this loan MFIs shall lend to their clients to construct new house or repair and maintain their existing house. Housing problem generally produce mental and psychological pressure in an individual and family as a whole that reduce the productivity. This loan option will help to relief the poor from such pressures.