Microfinance institutions will now be allowed to disburse loans of up to Rs. 1.5 million in installments. This is the same situation as about four years ago.

Since then, the Rastra Bank had reduced the limit from 1.5 million to 7 million, citing problems in the microfinance sector. Through the first review of monetary policy, the Rastra Bank has increased the limit on loans disbursed by microfinance financial institutions against collateral.

This arrangement has been made in the first review of monetary policy made public by the Rastra Bank today. The limit on loans disbursed by microfinance without collateral has been kept unchanged.