The central bank has directed Banks and Financial Institutions (BFIs) – after receiving complaints that the BFIs were reluctant to provide concessional loans under the government scheme – to make arrangement to ensure that eligible people get credit facility from their branch offices easily.
Issuing a circular today, the Nepal Rastra Bank (NRB) also directed them to prepare internal working procedures in line with the Unified Working Procedures on Interest Subsidy for Concessional Loans and provide the subsidised loans of appropriate scheme to eligible and interested public through their respective branch offices across the country.
Following various complaints from the public that they did not get subsised loans from the BFIs, the central bank was pressurised to issue directives for the implementation of interest subsidised loan schemes.
Earlier some four months too, the central bank had issued a circular to the licensed BFIs to implement the working procedure of interest subsidised loan schemes as announced by the government in the budget speech for the current fiscal year 2018-19. The budget has announced cheaper subsidised interest rates on loans for targeted groups including migrant worker returnees, women entrepreneurs and earthquake survivors. The government has promised to pay certain percent of the interest costs – through the central bank – of these loans. The government bears 5 per cent to 6 per cent of the interest cost based on the scheme of the loans. Some of these new schemes bear certain per cent of interest expenses for loans up to Rs 50 million for commercial agro and livestock farming, Rs 700,000 for educated self-employment youth, Rs 1 million for migrant worker returnee’s business project, Rs 1.5 million for women enterprise and Rs 1 million for business for Dalit community.
Likewise, others, who are eligible to get the interest subsidised loans are earthquake survivors – up to the limit of Rs 300,000 to rebuild their houses – and youths up to Rs 500,000 for higher and technical or entrepreneurship education.
According to the central bank, banks are not allowed to charge more than 2 per cent premium on their base rate as interest rates in these loans that have maturity period of up to five years.
But the implementation of the subsidised loan scheme no easy cake as the banks need the complete paper works and lenders must eligible to get such loans.
"The directive is issued to prepare the internal working procedure in line with the central bank’s working procedure and make arrangement that eligible and interested public get such loans under the appropriate heading stated in the working procedure through any branch across the country," reads the central bank directive.
Issuing a circular today, the Nepal Rastra Bank (NRB) also directed them to prepare internal working procedures in line with the Unified Working Procedures on Interest Subsidy for Concessional Loans and provide the subsidised loans of appropriate scheme to eligible and interested public through their respective branch offices across the country.
Following various complaints from the public that they did not get subsised loans from the BFIs, the central bank was pressurised to issue directives for the implementation of interest subsidised loan schemes.
Earlier some four months too, the central bank had issued a circular to the licensed BFIs to implement the working procedure of interest subsidised loan schemes as announced by the government in the budget speech for the current fiscal year 2018-19. The budget has announced cheaper subsidised interest rates on loans for targeted groups including migrant worker returnees, women entrepreneurs and earthquake survivors. The government has promised to pay certain percent of the interest costs – through the central bank – of these loans. The government bears 5 per cent to 6 per cent of the interest cost based on the scheme of the loans. Some of these new schemes bear certain per cent of interest expenses for loans up to Rs 50 million for commercial agro and livestock farming, Rs 700,000 for educated self-employment youth, Rs 1 million for migrant worker returnee’s business project, Rs 1.5 million for women enterprise and Rs 1 million for business for Dalit community.
Likewise, others, who are eligible to get the interest subsidised loans are earthquake survivors – up to the limit of Rs 300,000 to rebuild their houses – and youths up to Rs 500,000 for higher and technical or entrepreneurship education.
According to the central bank, banks are not allowed to charge more than 2 per cent premium on their base rate as interest rates in these loans that have maturity period of up to five years.
But the implementation of the subsidised loan scheme no easy cake as the banks need the complete paper works and lenders must eligible to get such loans.
"The directive is issued to prepare the internal working procedure in line with the central bank’s working procedure and make arrangement that eligible and interested public get such loans under the appropriate heading stated in the working procedure through any branch across the country," reads the central bank directive.
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