Nepal Rastra Bank (NRB) is preparing to refinance all the 753 local bodies through the upcoming Monetary Policy. It is preparing to do so with an aim to uplift the economy which has been hammered by the coronavirus contagion.
Speaking at the Finance Committee under the Federal Parliament today, NRB Governor Maha Prasad Adhikari mentioned that providing such loans to the local levels will increase employment opportunities. He said that it would also help boost self-employment and economic activities at the local level. “The local level should be the base of the economy and a policy is being prepared accordingly,” he further stated.
Adhikari clarified that a total of only 37 people received Rs seven billion out of the refinance facility provided in the previous year.
“Now we have introduced a law that makes it mandatory for each branch of any bank to give loans to a minimum of five people,” he said.
A provision will be made in the Monetary Policy for institutions to get such loans at up to three per cent interest and businesses run by women can avail them at five per cent interest rate, he informed.
Governor Adhikari also stated that such loans can go up to Rs 200 billion in the next fiscal year. During the meeting, he also informed the committee members that the refinancing system will remain in place as long as the coronavirus effect remains.
“If a person comes to the market with an innovative and saleable business idea but a bank refuses to provide loans then the central bank will look into the issue,” he said. Adhikari stated that the central bank is serious about effectively implementing the refinancing facility as it will increase employment at the local level.
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