How to give legal advice to investors to open Micro-finance institution in Nepal?
Suppose that a social investor inquired you to advise the legal and regulatory environment to set-up the micro-finance institution in Nepal. Outline the key legal and regulatory aspects you will consider to provide practical and understandable advise to this investor.
Some of the key legal and regulatory aspects I will consider to provide practical and understandable advise to the investor are as follows:
- Incorporation: The legal rules, regulations and formalities related with company registration and formation. In Nepal, three different legal windows for microfinance exist. The Financial Intermediaries Societies Act is clearly targeted at microfinance NGOs, while the Cooperative Act caters for different kinds of cooperative societies, amongst other savings and credit cooperatives. Finally, the third institutional type is development banks, of which four are specialised in microfinance.
- Monetary & legal policies: as mandated by Nepal Rastra Bank or other governing/regulatory bodies.