Nepal | July 06, 2020

Prioritise issuance of subsidised loans for youths: Finance minister tells BFIs

Himalayan News Service
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Kathmandu, November 27

Finance Minister Yubaraj Khatiwada today directed banks and financial institutions (BFIs) to prioritise and promote disbursement of subsidised loans to youths. He even warned to take action against banks if they are found to be not issuing such loans if the loan-seeker has completed all procedures.

Addressing a discussion programme on the implementation of Unified Directive on Subsidised Loan here today, Khatiwada said, “BFIs seem to be reluctant to issue subsidised loans to youths even if the latter have fulfilled all legal and banking procedures. As the government had introduced such facility for youths to promote entrepreneurship and generate job opportunities in the country, the BFIs that do not prioritise issuance of subsidised loan for youths will be penalised.”

Moreover, Khatiwada informed that the government will soon set up a hotline facility for youths to register their complaints if BFIs do not provide subsidised loan.

In September last year, Nepal Rastra Bank (NRB) had prepared a unified working procedure related to interest subsidy for concessional loans for youths, thereby paving way for unemployed educated youths, returnee migrant workers, women entrepreneurs, Dalits and quake victims, among other targeted groups, to borrow money from BFIs at cheaper interest rates.

As per the procedure, BFIs should provide loans up to limit set in the working procedure. As per NRB procedure, banks should provide up to Rs 50 million in such concessional loan under commercial agriculture and livestock loans. However, youths have been complaining that banks are denying such loans.

But bankers have refuted the claim that they are denying subsidised loan to youths. Kiran Kumar Shrestha, chief executive officer of Rastriya Banijya Bank, informed that his bank has issued such loans worth Rs 6.81 billion to almost 6,000 people so far.

Meanwhile, the National Youth Council, Rastriya Banijya Bank, Agricultural Development Bank and Nepal Bank today inked an agreement to issue subsidised loan to youths against their academic certificates as collateral.

A version of this article appears in print on November 28, 2019 of The Himalayan Times.

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