NRB provides refinance facility of Rs 2 billion

Published On: October 26, 2016 07:20 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Oct 26: Nepal Rastra Bank (NRB) has provided Rs 1.99 billion worth of refinance facility over the first two months of the Fiscal Year 2016/17, up from Rs 670 million in the corresponding period of last fiscal year.

Data shows the central bank provided general refinance of Rs 1.62 billion and export refinance of Rs 370 million billion in the review period. In the same period of the last fiscal year, Rs 620 million toward general refinance and Rs 50 million billion toward export refinance was utilized.  

The  central bank  has  been  providing refinance  facility  aimed  at  expanding credit  to  the  productive sector  along  with  promoting  export.  It has been providing general refinancing at 4 percent interest rate, while export refinancing is available at 1 percent.
Meanwhile, bank and financial institutions (BFIs) have extended a total of Rs 117.08 million loans at two percent interest rate to the earthquake survivors for building their house. The NRB provides zero percent refinance facility to the BFIs who float housing loans to the earthquake survivors at 2 percent interest rates. 

Though the devastating earthquakes last year damaged nearly 800,000 houses, only few peoples have got the loans under subsidized interest rates by the central bank. The central bank had announced that quake-hit families can borrow up to Rs 2.5 million from BFIs in Kathmandu Valley and up to Rs 1.5 million in other quake-hit districts at 2 percent interest rate. 

While the NRB was quick to announce the scheme to provide relief to quake victims, many complain that reluctance of BFIs have made it difficult for the earthquake survivors to get such loans. However, bankers say that they can float loans to qualified borrowers who have the capacity to repay. "We generally see the capacity and willingness of borrowers to repay loans. If they have both, we do not turn them away," a banker told Republica.

In the initial days of the scheme, the BFIs had turned down the loan demands from quake survivors, citing confusion over the criteria and procedures. While BFIs has been providing such loans in recent months, there has not been much enthusiasm from the earthquake survivors, said the banker. 

"There was some confusion over the criteria and procedures earlier. By the time BFIs were ready to float subsidized loans, many people seems to have already arranged fund to build their house," the banker added. 

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