NRB Expands Digital Lending Limit to Rs 1 Million for MSMEs, Broadens Scope of Online Loans

Kathmandu. Nepal Rastra Bank (NRB) has amended the Guidelines on Digital Lending, 2078, expanding both the loan limit and the scope of digital credit facilities, with a focus on facilitating micro, small, and medium enterprises (MSMEs).

Under the first amendment to the guidelines, the maximum limit for digital loans has been increased from Rs 500,000 to Rs 1,000,000 for MSMEs. The central bank has also enabled businesses to access such loans through mobile banking, internet banking, or digital platforms without the need for physical visits to financial institutions.

Previously, individuals with salary or business income accounts could obtain electronic loans of up to Rs 500,000 for 3 years, while other individuals were eligible for loans up to Rs 200,000 under the same duration.

With the revised provisions, MSMEs can now access short-term working capital loans of up to Rs 500,000 through electronic channels, with a repayment period of up to one year. In addition, they can obtain long-term working capital loans of up to Rs 1,000,000, with repayment terms to be determined by respective banks and financial institutions based on their lending policies.

The amendment is aimed at promoting easier access to credit for small and medium entrepreneurs through digital and transaction-based lending systems.

Entry of Technology Companies in Digital Lending

The revised framework also allows banks and financial institutions to collaborate with technology service providers to enhance digital loan assessment processes. Earlier, only payment service providers were permitted to assist in loan applications and collections.

Under the new arrangement, banks may, with customer consent, access relevant business and transaction data through authorized technology platforms for credit evaluation.

However, NRB has clarified that the credit risk will remain entirely with the lending banks and financial institutions. Banks are required to enter into formal agreements with technology providers that outline data access procedures, confidentiality, consent mechanisms, and information authenticity, and must submit these agreements to the central bank.

While the amendment expands digital lending channels and technological participation, NRB has retained strict provisions on customer protection and banking governance. Banks are required to establish dedicated digital lending portals or mobile applications for loan applications.

Financial institutions must also assess borrowers’ repayment capacity to prevent multiple borrowing across banks. Customers must be informed in advance about all applicable charges, and no additional fees beyond approved service charges and third-party costs may be imposed.

Where payment service providers are involved as intermediaries, their service charges must be borne by the banks and cannot be passed on to customers. The guidelines also mandate strict data confidentiality, prohibiting the use of customer information for purposes beyond lending without explicit consent.

 

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