Interest-free loan scheme for quake victims yet to begin
January 29, 2018 07:29 AM NPT
KATHMANDU, Jan 29: Not a single earthquake victim has been able to benefit from the government's scheme of interest-free housing loan of up to Rs 300,000 due to the government's half-hearted approach to the scheme.
The decision to provide an interest-free loan of Rs 300,000 was unveiled in the budget of the fiscal year 2016/17. However, the government has failed to make arrangements for providing the subsidized loan even after more than a year and a half since the announcement.
The government had come up with the working procedures 2017 on granting house construction loans to the earthquake victims through group collateral. However, private sector banks refused to extend loans on the basis of group collateral and demanded amendments to the procedures. For the amendment, the government had formed a task force under the coordination of the central bank of Nepal.
Based on the recommendation of the task force, the government later amended the procedures stating that the loans be issued against the under-construction house as collateral. The bankers had also demanded that the government should provide them operational costs as they would have to set up temporary offices in the earthquake-affected villages lacking roads and also provide 2 percent interest on the loan to be provided to the victims.
For that, the ministry of finance was to set up a separate fund. However, the fund has not been established so far.
Banks have demanded that the working procedures should also include provisions like insurance, the loan payback period and other details like monthly income of the victims.
-- NRA spokesman Yam Lal Bhusal
“Plus, the banks are of the opinions that the latest amendment was not enough. They have demanded that the procedures should include provisions like insurance, the loan payback period and other details like the monthly income of the victims,” Spokesperson of NRA Yam Lal Bhusal said.
He said that the NRA is working on the possible amendments that can be made to address the concerns of the banks and pave the way for the implementation of the interest-free loan scheme.
“We are still discussing the issue. It may take some time before we forward the amendment proposal to the cabinet,” he said.
Officials of the Ministry of Finance also said that the ministry shall set up the fund only after the procedure is amended.
As per the procedure, the banks under the category of A, B C and D shall provide the interest-free loan to the victims. But due to delay in amending the procedures on time, it has become uncertain whether the victims can benefit from the scheme.