KATHMANDU, August 3: Finance Minister Janardan Sharma has urged the banks and financial institutions (BFIs) working closely with the people at the grassroots to reduce the interest rate on loans that they provide to the poor people.
Speaking at a program organized by National Cooperative Bank Limited (NCBL) on Tuesday, Finance Minister Sharma pointed out the exorbitant interest rates being charged on the loans provided by the cooperative banks, primary cooperatives and microfinance institutions in particular. According to him, unfair interest rates being charged on the loans taken by the poor people have helped increase an unequal financial access to the people from different economic classes.
Sharma expressed his commitment that the government will initiate a process to reduce the existing gaps in interest rates on credits given to the haves and haves not. “While poor people are compelled to pay higher interest rates on loans, the individuals taking auto loans are enjoying credits at lower interest rates,” he said.
Sharma also expressed his concern over the existing mechanism in which the cheques issued by the cooperative banks are not considered by the common clearing system implemented for other banks. He also underlined the role of microfinance institutions to make the Nepali economy production-oriented through facilitating credits in production businesses.
Marking its 19th anniversary, the NCBL has been organizing a two-day microfinance summit which will run till Wednesday. On the occasion, the NCBL also honored the leader of the cooperative movement Keshab Prasad Badal and journalist Sharmila Thakuri, among others.