NRB's apathy hits carpet industry

HIMALAYAN NEWS SERVICE

KATHMANDU: Nepal Rastra Bank’s failure in monitoring softloan flow to the carpet industry has hit the industry hard.

The Nepali carpet industry which used to be the third largest supplier of hand-knotted carpet in the international market has not received any order this year, according to the exporters.

“The central bank has brought the policy of soft loan but failed to monitor its implementation part,” said president of Nepal Carpet Exporters’ Association Kabindra Nath Thakur.

The central bank has failed to direct the commercial banks to give priority to

the carpet industries, which

is struggling for its existence, he added.

Nepali hand-knotted carpet, in last one-and-a-half decade has lost 70 per cent of its export share in the international market, according to association.

During the fiscal year 2010-11, Nepal exported around 700,000-sq-m of hand-knotted carpet.

Nepal, the third largest supplier of hand-knotted carpet between 1993 and 2001, has been fighting for its survival at present. The carpet association has also submitted a memorandum to the governor regarding its problems.

“The central bank has also assured us to talk to Nepal Bankers’ Association regarding the soft loan facility,” Thakur said, adding that, the central bank seems not interested to hold any interaction with the bankers.

The banks are charging high interest rate of around 15 per cent to 16 per cent at present. Apart from lack of implementation of soft loan facility, increment in the cost of raw material has also directly affected the cost of production making Nepali hand-knotted carpets less competitive in the international market.

The cost of production of Nepali hand-knotted carpet has increased by about 50 per cent in last one year, according to the association. The

increased cost of production and the lack of government interest on revival of

the industry have put the future of carpet industry incomplete risk.

Along with lack of soft loan and increasing cost of production, the carpet industry has also failed to get the facility of government’s cash incentive scheme, which was announced to promote the export sector.

However, Thakur was hopeful that with the simplification of procedures, the carpet industry might also become eligible to get the facility of cash incentive.

Of the total carpet industry, very few carpet industries like Paramount Carpet, Himalayan Rugs, NP Rugs, Seneon Carpet, Fishtail Carpet Industry, Exotic Oriental Crafts, TT Rugs, Rolpa Carpets, are still supplying quality carpets to the international markets.