NRA nudges ministry over interest-free loan for quake victims

Published On: February 20, 2017 12:20 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 20: With the government not taking any initiative to implement the promised interest and collateral free loan of Rs 300,000, which is apart from the housing grant of Rs 300,000, the National Reconstruction Authority (NRA) has formally asked the Ministry of Finance to formulate working guidelines without delay for issuing such loan to the victims. 

The NRA on Sunday formally wrote to the ministry requesting the latter to formulate working guidelines for implementing the government's decision to provide the such loans against collective guarantee, informed Spokesperson of the authority Yam Lal Bhoosal.

The NRA wrote to the ministry of finance as per the decision of the executive committee's meeting on Friday. 
While unveiling its policy and program for the fiscal year 2016/17 in May last year, the government had announced that it would provide Rs 300,000 interest-free on the basis of collective guarantee to the quake victims along with the housing grant of Rs 300,000. 

“We received complaints from the quake victims demanding immediate implementation of the announcement as the housing grant of Rs 300,000 alone is not enough to construct a new house. So, we wrote to the Ministry of Finance on Sunday requesting it to formulate working guidelines clearly defining the terms and conditions for issuing the interest-free loans on the basis of collective guarantee,” Bhoosal said, adding, the loan could be a huge relief for the earthquake victims.  

He said that the ministry will coordinate with the Nepal Rastra Bank for implementing the loan scheme once the working guidelines are formulated.  

“The victims can get the loan from both private as well as public banks. Let's hope the ministry will act on our request as soon as possible,” he added. 

Likewise, in the letter, the NRA has also requested the ministry to take initiatives to help provide the victims with subsidized loans as promised by the government.
Nepal Rastra Bank had announced that a quake-hit family can borrow up to Rs 2.5 million in the Kathmandu Valley and Rs 1.5 million in other quake-hit districts from different banks and financial institutions at subsidized interest rate of 2 percent per annum. Such loans will be refinanced by the central bank at zero percent interest. But only 317 earthquake victims have acquired the loan so far due to reluctance on the part of various financial institutions in issuing the loan. The financial institutions have said there are confusions over the criteria and procedures for issuing the subsidized loan. 

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