KATHMANDU, MARCH 18

The top delegation from Manila representing Asian Development Bank (ADB) has expressed willingness to work with Confederation of Banks and Financial Institutions Nepal (CBFIN) to promote the domestic economy via strengthening of the financial sector, facilitating access to credit to local and productive industries and other logistical infrastructure.

At special meeting organised by CBFIN, Manmohan Prakash, deputy director general of ADB Manila, who is overseeing South Asia affairs, emphasised the necessity of the country's own resources for sustainable economy with focus on productions based on domestic raw materials by providing loans, global market opportunities, research and new technologies.

Similarly, Prakash also highlighted the need of Infrastructure Financing Mechanism, Micro Entrepreneurship Development Project, and SME Financing for Nepal in the future.

'Small and medium businesses need to be provided collateral-free loans, so that they can run their businesses sustainably. Also micro, small and medium enterprises (MSMEs) need to be supported with financial access, market and infrastructure as well as skills as these industries create huge employment.'

Prakash stressed on reasonable interest rates without any procedural hurdles so that MSMEs are able to operate effectively.

Stating women are the driving force of real change in society, he said that providing skills and ease in financial access to women would assist in economic development.

Meanwhile, Pawan Kumar Golyan, chairperson of CB- FIN, requested the ADB to provide more than $1 billion in soft loans to Nepal during the current financial crisis which will solve the liquidity crunch and banks and financial institutions would be able to provide targeted loans to the private sector. Also, it will help revive the COVID-battered economy.

Meanwhile, Golyan requested facilitation from the ADB so that the commercial banks can secure loans from international financial institutions to tackle the current financial crisis.

'Currently Nepal's imports have surged by more than 42 per cent, while remittance inflow has slowed and also the balance of payments deficit stands at Rs 247.3 billion. In such a crisis, ADB's financial support is crucial to strengthen the financial sector, promote export-oriented local industries, provide better access to credit for MSMEs through direct channels which will help to strengthen the capacity of farmers for a sustainable economy,' said Golyan.

Senior Vice-President of CB- FIN, Bhoj Bahadur Shah said that CBFIN is ready to work with ADB on dialogue, formulation and implementation of policy to create an investor-friendly environment.

According to Shah, giving 10 per cent tax exemption to the banks and financial institutions that invest more than the limit in the priority areas specified by the Nepal Rastra Bank for the promotion of productive industries and businesses like SMEs/MSMEs, will help in building a sustainable economy.

Chairman of Kumari Bank Ltd, Amir Rana, said that promoting domestic production could create more jobs and help the government to raise huge revenue by reducing imports and the liquidity problem would be solved to some extent.

Thiam Hee-ying, ADB Manila's director, spoke about the potential of domestic industries and the region's sustainable strategy for a self-reliant economy.

A version of this article appears in the print on March 19, 2022, of The Himalayan Times