KATHMANDU, July 20: Two years after the devastating earthquake, only 382 survivors have received subsidized loans from banks and financial institutions (BFIs) for rebuilding their houses. 

According to Nepal Rastra Bank (NRB) data for the 11 months of the current fiscal year 2016/17, the earthquake survivors have received Rs 816.5 million in housing loans on subsidized interest rates. 

The loans against which the BFIs cannot charge more than two percent interest, is refinanced by the NRB. 

Under this scheme, quake-hit families can borrow up to Rs 2.5 million from the banks in Kathmandu Valley and up to Rs 1.5 million in other districts at two percent interest rates. 

While the number of earthquake survivors taking subsidized loans to rebuild their houses is increasing in recent days, the total amount of credit on concessional interest rates indicates that only a meager number of victims have sought loans from the banks. 

Over 505,000 private houses were fully damaged by the disaster and around 279,000 houses were partially damaged, according to the official data.

In an effort to provide relief to the survivors who lost their homes in the earthquake, NRB had announced immediately after the 2015 earthquake that it would provide zero percent refinance facility to BFIs, who, in turn, would provide housing loans to the survivors at no more than two percent interest rates. 

However, only 382 victims have borrowed such loans even after more than two years of the earthquake. Many of the survivors complain that the process to get the subsidized loan is cumbersome, and that they are discouraged to seek this facility. 

Banking executives, however, say that they extend credits to the victims if they meet the conditions. The BFIs provide loans to only those who they see are willing and capable to service the debt, requiring them to have adequate collateral and income source for the loans.

There was not much amount of loans disbursed in the first year after the earthquake as the banks turned down many loan applications, citing confusion over the criteria and procedures.

BFIs cannot change the interest rate to the borrowers. They cannot either charge the borrowers any amount except the interest and third-party payments like insurance, collateral, loan notice, and loan security. 

To get such concessional loans, the survivors should present the official certificate of being an earthquake-victim whose house was destroyed. They also need to furnish evidence from the respective local bodies that they do not own any other habitable house. 

Reconstruction of private houses must follow the National building codes and the compliance for earthquake-resistant reconstruction. 

 
• earthquake
 
• nepal
 
• victims