Friday, March 9, 2012

Investment climate key to double digit growth

The country needs investment climate to see a double digit growth, according to finance minister Barsha Man Pun.
Addressing the inauguration of Himalayan Bank's head office in Kamaladi, Kathmandu today, he also claimed that the investment climate has been improving. "Since this government was formed seven months ago, the country has not seen any bandhs and strikes," he said, adding that the government is, apart from Constitutions and Peace Process, concentrating on economic growth. "But the political parties should agree on common minimum agendas to improve economy and boost growth," Pun, the former guerrilla vice commander claimed, adding that they are also trying to forge alliance with all the political parties to work on Common Minimum Economic Programme.
"The Common Minimum Economic Programme and conducive investment climate will boost the confidence of the investors," the finance minister said. "Once the investors' confidence will get a boost, the domestic and foreign investors will find Nepal a suitable place for investment."
He also suggested the banks and financial institutions find new avenues to invest and focus on Small and Medium Enterprises (SMEs) that could not only generate employment but also help boost economic growth.
"However, there is a gap in SMEs lending, according to central bank governor Dr Yub Raj Khatiwada. "Those micro entrepreneurs, who have graduated from the borrowings from microfinance, are bankable but the banks and financial companies have yet to reach them," he said.
"The financial sector is passing through three major problems, he said categorically, adding that the short term liquidity comfortable situation against the long term lending demand, problem in good corporate governance and the weak regulators that could not ensure fair market practice and growth.
"The regulators should be stronger, transparent and competitive for the growth of financial sector," the governor said, suggesting the banks and financial institutions look for ways — like bonds — to translate short term liquidity situation confortability into a long term lending demand.

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