Govt eases procedures for subsidized housing loans for quake survivors
May 8, 2019 08:34 AM NPT
KATHMANDU, May 8: The government has made it easier for earthquake survivors to apply for concessional loans to rebuild their houses.
Making amendment to the working procedure on subsidized interest loans to earthquake survivors to rebuild houses, the government has relaxed some provisions to make it easier for them to borrow concessional loans from a bank and financial institutions.
A recent meeting of the cabinet made amendment to the working procedure amid complaints that earthquake survivors have been facing various hassles to apply for the loans.
With the amendment, earthquake survivors will now be able to get loans against the collateral of the houses and occupying land that they are rebuilding or retrofitting. Due to lack of clarity about the collateral, BFIs were reportedly reluctant to lend under the subsidized interest loan scheme. The amendment in the working procedure will now enable BFIs to extend loans to earthquake survivors to use the facility of subsidized interest loan for rebuilding their houses without having to worry about the collateral.
According to the Nepal Rastra Bank (NRB), the outstanding amount of refinancing extended to BFIs for providing concessional housing loan stands at Rs 2.68 billion as of mid-March 2019. The number of earthquake survivors utilizing such loan scheme is 1,577.
The number of earthquake survivors benefiting from the scheme is very low if compared to the total number of families who lost their houses in the earthquake. According to the National Reconstruction Authority, 810,690 houses were flattened by the 2015 earthquakes.
Similarly, the amendment to the working procedure will also allow earthquake survivors to get a subsidized loan for one additional scheme for livelihood purpose. Earlier, a borrower was not allowed to get loans for another subsidized loan scheme.
There are seven categories under the subsidized loan scheme that the government rolled out last year. They include Rs 700,000 loan for educated self-employment youth, Rs 1 million for business projects promoted by returnee migrant workers, Rs 1.5 million for women enterprise and Rs 1 million for business promoted by members of 'Dalit' community, loans to youths (up to Rs 500,000 for higher, technical or entrepreneurship education) and subsidized agro loan scheme.