Morang businesspeople protest rising lending rates

Published On: January 27, 2019 09:28 AM NPT By: Binod Subedi

BIRATNAGAR, Jan 27: Entrepreneurs in the eastern region of the country have announced protest programs against the concerned bodies for excessive interest rates. 

Organizing a press meet in Biratnagar on Friday, Morang Merchant Association (MMA) and Chamber of Industries, Morang (CMI) announced their protest programs against the government, claiming that the exorbitant interest rates have hurt their businesses. 

Pawan Kumar Sarada, president of MMA, said that the two associations have put forth two-point demand with the government. 

According to him, the associations have demanded that interest rates should be fixed at seven percent for loans to manufacturing-based industries and nine percent for business loans to industries other than manufacturing-based businesses. Additionally, the associations have demanded a directed sector lending rule requiring BFIs to float at least 50 percent of their total loans to manufacturing-based businesses and industries. 

Sarada added that the entrepreneurs had to protest as the current rate of interest has hurt establishment and expansion of businesses and industries, and in some cases, forced shutting down of businesses.

Bhim Ghimire, president of CMI, said the private sector had hoped that the doing-business environment would significantly improve in a stable political situation. 

“However, the high-interest rate has worsened the doing-business environment,” Ghimire said. “It has had a great cost on our confidence and trust.”

Ghimire further said: “We have repeatedly asked the government to resolve the issue of high-interest rate, but all in vain.” 

“We have been compelled to protest due to the government’s indifference to our demands,” Ghimire added.

The associations have planned to start their protest from Sunday. They have also said that they would be sending memorandums to he prime minister, finance minister and the Nepal Rastra Bank (NRB). 

“We will padlock the central bank’s branch in Biratnagar until our demands are properly addressed,” said Ghimire. “We will also hand over the keys of our factories to the prime minister.” 

Such action will have a serious impact on the economic growth target of the country, according to associations’ representatives. The government has set a target of achieving economic growth of 8 percent and creating over 500,000 new jobs in the current Fiscal Year 2018/19. 

Private sector organizations have also taken exception to the government’s reluctance to implement a recent report by a committee on taxation problem in the new federal system.

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