FNCCI suggests project-based loan facility

Kathmandu, July 4

Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has suggested the Nepal Rastra Bank (NRB) to announce project-based loan facility to facilitate the expansion of small and medium enterprises and startups through its Monetary Policy of the coming Fiscal Year 2021/22.

A delegation of the business body led by its President Shekhar Golchha met Governor of the NRB Maha Prasad Adhikari on Sunday and recommended continuing the policy taken in the current FY 2020/21 for the business revival and accord priority to the SMEs.

“SME targeted refinancing has given a huge relief to the COVID-19 affected businesses so the policy should be continued in the next fiscal as well,” recommended the FNCCI and said that priority should also be given to the development and expansion of digital banking.

Golchha said that the FNCCI was studying about the feasibility of the project-based loan and would soon submit the report to the NRB.

SMEs have about 22 per cent share in the national economy.

Saying that the economy is undergoing through tight liquidity situation, the FNCCI recommended that the monetary policy should be focused on maintaining liquidity in the market.

“Using the available instruments, the central bank should try to contain the interest to the single digit. The monetary policy should also analyse the pressure on foreign exchange reserve and balance of payment when economic activities take pace,” said FNCCI.

It has also hoped that rapid vaccination would help bring the economy back on track and it would jump to a double-digit growth after a discouraging situation for a couple of years.

Governor Adhikari said that the central bank would accommodate the suggestions from the private sector in order to help the latter in business revival.

Published in The Rising Nepal daily on 5 July 2021.