BFIs to provide concessional loan in a hassle-free way

Kathmandu, Oct. 8: Banks and Financial Institutions (BFIs) in the country have said that they had no problems to mobilise concessional loans to the quake-affected families as per the procedure recently approved by the Cabinet.

They also agreed to provide the loans in a hassle-free way.

In a meeting with the National Reconstruction Authority (NRA) on Monday at Singhadurbar, President of Nepal Bankers Association (NBA) Gyanendra Prasad Dhungana, President of Nepal Financial Institution Association (NFIA) Saroj Kaji Tuladhar and Member of Development Bankers Association Nepal (DBAN) Manoj Gyawali said that the banks were ready to extend the government announced concessional loan facility to the reconstruction beneficiaries.

NBA, NFIA and DBAN are the association of the 'A' class commercial banks, 'C' class finance companies and 'B' class development banks respectively.  

Acting Governor of Nepal Rastra Bank Chintamani Siwakoti said that the central bank was ready to provide necessary cooperation and facilitation in distributing the concessional loan.

Beneficiaries, who had signed the house reconstruction agreement with the government but couldn't start the construction works due to shortage of required funds, can apply for Rs. 3000,000 concessional loan against the collateral of their under-construction house, according to the new procedure.

The loan will be available in group collateral as well.

Such loan will expire in five years.

The BFIs mobilising the loan can charge additional 2 per cent maximum on the base rate. The government will provide 5 per cent subsidy on the interest of the loan. The borrowers need not to pay any surplus charges.

But, any family that has second home in other locations, has received grant money from other institutions apart from the government or already built its house won't eligible for the loan.

Chief Executive Officer of the NRA Sushil Gyawali said that the loan facility will be instrumental in supporting the poor families in building their shelters.

Many families who are lagging behind in building their houses are expected to start the construction of their house after Dashain and Tihar, two major festivals celebrated in the country.

Published in The Rising Nepal daily on 9 October 2018.