Kathmandu, Dec. 30
The relief
programmes announced to rehabilitate the COVID-19 affected business and
enterprise has proven effective for the small and medium enterprises (SMEs).
More than 33,000
small clients that had up to Rs. 1.5 million bank loan portfolio have obtained
the government financial relief. The Nepal Rastra Bank (NRB) has approved the
refinancing package worth Rs. 82 billion.
“SMEs and
vulnerable businesses have been particularly benefitted by the relief and
rehabilitation programmes of the government and the central bank,” said Maha
Prasad Adhikari, Governor of the NRB, in a virtual interaction with the Nepalese
Association of Financial Journalists on Wednesday.
Likewise, about
Rs. 9 billion relief to the businesses and industries has been provided with
the 2 per cent discount in interest of bank loan.
“Relief
programmes are being gradually utilised by the needy businesses. Currently,
there is enough liquidity in the system and a sizable number of entrepreneurs
are utilising their own funds in the post-lockdown situation. The government-announced
relief programmes would be fully subscribed within a couple of months,” said
Adhikari.
Likewise,
private sector lending has increased significantly in the last two months of
2020 which has given hope to both the banking industry and economy.
He said that the
central bank had given priority to maintaining liquidity in the market and
ensuring that the enterprises do not experience resource crunch when they need
it.
According to
him, the financial sector regulator has been planning to evaluate the banks and
financial institutions (BFIs) on the basis of their implementation of the
special relief packages announced in the wake of the coronavirus pandemic.
This kind of
evaluation would be made after April 2021 while the bank’s contribution to the
relief programmes would be measured after the second quarter of the current
fiscal year 2020/21.
Governor
Adhikari also said that the economy did not contract as it was expected earlier
this year. “The recovery trend is quite good globally and it is replicated in
Nepal as well. Only 6 per cent businesses were running in full capacity in May
this year while the number has gone up to 57 per cent in December,” he said.
Construction and
trading sector are doing particularly well while tourism is the sector that will
have a delayed recovery.
Published in The Rising Nepal daily on 31 December 2020.
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