The microfinance sector was served by cooperatives (1950-1960s) and normal banks (1970-1980s) until 1980, when a number of pilot projects and initiatives were implemented to introduce the financial and banking services to help poor and women. However, few groups of poor people were benefited, but at the end these service were found ineffective.
During the 1990s and early 2000s, the government moved further to strengthen the Microfinance Institutions to provide financial service to poor and women, with the formation of five Regional Development Banks (RDBs) in each Development region based of Grameen model with the sole objective to provide micro-credit services to the poor and women. Eventually these Regional Development Banks transformed to Microfinance Development Banks (MFDBs) after privatization and licensed as class 'D' financial Institutions.

Soon after in early 2000s, a number of private microfinance and NGOs came into existence with microfinance programs. Under Grameen Model, NGOs such as Nirdhan Utthan Bank, Center for Self-help Development (CDF) successfully implemented microfinance program and later transformed to Microfinance Development Banks. Similarly other Microfinance Development Banks, Chhimek Bikas Bank Ltd. (CBB), Deprosc Bikas Bank (DBB) and Nerude Microfinance Development Bank Ltd. (NMDB), were also formed.

During early 2000s, NGOs which were involved in community based financial activities were also legalized and licensed by Nepal Rastra Bank (NRB) to formalize micro financing services, as a result Financial Intermediary NGOs (FINGOs) were formed. Wholesale funding institutions were also formed during the early 2000s period. Nepal Rastra Bank formed Rural Self-Reliance Fund (RSRF) in the year 1991 to provide financial assistance to NGOs and Cooperatives. Rural Microfinance Development Center (RMDC) is the one such wholesale organization that was formed in 1998 under the Public Private Partnership (PPP) Program, where Nepal Rastra Bank has 26% stake and remaining stakes hold by 13 commercial banks. Sana Kisan Bikas Bank Ltd. (SKBBL) was formed in 2001 with the objective to finance Small Farmer Cooperatives Ltd. (SFCLs) and the National Cooperative Development Bank (NCDB) was formed in 2003 to support and finance the Cooperative organizations in the country. Nepal Rastra Bank, the central bank of the country regulates the Microfinance Development Banks (MFDBs) and Financial Intermediary NGOs (FINGOs) while the Small Farmer Cooperatives Ltd. (SFCL) and Savings and Credit Cooperatives (SACCOs) are governed by Cooperative Laws.

All types of Microfinance services in the country are provided by Microfinance Institutions (MFIs) working as regulated MFDBs, FINGOs, SFCL, and SACCOs.
Nirdhan Utthan Bank Ltd., Chhimek Bikas Bank Ltd., and Swabalamban Bikas Bank are the top three Microfinance Institutions in the country.
Of the total borrowers under Microfinance Institutions, government Regional Development Banks serves almost quarter of the total borrowers, Microfinance Development Banks (MFDBs) servers almost the half of the borrowers and the remaining borrowers are serviced by FINGOs and Cooperatives.
There are various organizations in Nepal that regulates and supervises Microfinance Institutions, which are listed below:

Organization

Description

Nepal Rastra Bank (NRB)

Regulates Microfinance Development Bank (MFDBs)

Rural Self Reliance Fund (RSRF) - Nepal Rastra Bank

Established by Government of Nepal under Nepal Rastra Bank – Micro-Finance Promotion and Supervision Department in 1991.
Provides wholesale funding to MFIs, including SFCLs, SACCOs, and FINGOs

Rural Microfinance Development Center Ltd. (RMDC)

Established in 1998
Provides wholesale loan to MFDBs and FINGOs at lower interest rates.

Center for Microfinance (CMF)

Established in 2000
Provides financial services like, credit, savings, to poor people and women
Conducts trainings, technical assistances, research, and policy advocacy to Microfinance Institutions.

Sana Kisan Bikash Bank Ltd. (SKBBL)

Wholesale Microfinance Development Bank which promotes and strengthen the grassroots level Small Farmer Cooperatives Ltd. (SFCLs).
Provides loans at lower interest rate.

List of Microfinance Institutions (MFIs) in Nepal

Macro Level: Government Show
Meso Level: Financial Infrastructures and Services Show
Micro Level: Financial Service Providers Show