Thursday, December 19, 2019

BFIs float Rs 41 billion in concessional loans

Though there is a lot of complaint of bank and financial institutions (BFIs) not floating concessional loans, they have floated a total of Rs 41.05 billion concessional loans to 20,869 individuals till mid-November under seven different categories.
Though, concessional commercial agriculture and livestock loan was introduced few years ago, the government has added the other six categories for concessional loans in the budget for the last fiscal year 2018-19. “The applicants for concessional loans need to meet the criteria set by the government to qualify for the scheme,” according to the fiscal policy. “The government subsidises seven per cent interest rates for loans to woman entrepreneurs and five per cent for loans under other six categories.”
The central bank data reveals that some 18,743 individuals received commercial agriculture and livestock loans – the highest among all categories – as of mid-November. “A total of Rs 39.8 billion was disbursed as loans under the agriculture and livestock category,” the central bank data reveals, adding that under educated youth self-employment loan, some 38 individuals received loans totaling Rs 20.01 million. “Likewise, some 87 youth returnee migrant workers received Rs 58.40 million in loans.”
The women entrepreneur loan with some 1,675 women entrepreneurs receiving loans totaling Rs 1 billion stands second.
Likewise, some 117 beneficiaries borrowed Rs 64.78 million from BFIs under dalit community business development loan, whereas some 70 beneficiaries received higher technical and professional education loans of Rs 16.93 million. “A total of Rs 36.66 million was disbursed to 139 earthquake survivors to rebuild their houses damaged by the 2015 earthquake,” the central bank data reveals, adding that some Rs 700,000 was disbursed in loans for educated self-employment youth, Rs 1 million for business projects promoted by returnee migrant workers, Rs 1.5 million for women-run enterprises, and Rs 1 million for business promoted by members of Dalit community. “Earthquake survivors (up to Rs 300,000 to rebuild their houses) and youths – up to Rs 500,000 for higher, technical or entrepreneurship education – can also borrow from the BFIs at subsidised interest rates.”
The scheme was introduced to encourage youths to take up various occupations and create employment opportunities within the country. Under the scheme, the government subsidy goes to loans for commercial agriculture and livestock, self-employment of educated youth, projects of youth returnee migrant workers, woman entrepreneurs, dalit community business development, higher technical and professional education, and housing for earthquake victims.
According to the central bank, the scheme requires commercial banks to disburse loans to at least 500 borrowers by mid-July 2020, whereas 'B' class development banks must float loans to minimum 200 borrowers, and 'C' class financial companies require floating loans to 100 borrowers. “BFIs that do not meet the new requirement by the given deadline will be fined by the central bank.”

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