NMB Bank and Himalaya College of Engineering, Lalitpur have signed a memorandum of understanding (MoU) to provide education loans to students of Bachelor of Engineering (BE) against their academic certificates as collateral.

Chief executive officer of NMB Bank Upendra Poudel and chairman of Himalaya College Bishnu Prasad Sharma signed the MoU on Friday.

Genuine but economically backward students of Himalaya College can enjoy this facility, the bank said in a press release. Students from rural and backward regions and women will get priority under the scheme. 

The government had announced through the budget statement of the current fiscal year that arrangements would be made to provide student loans, but the scheme was not included in the monetary policy by Nepal Rastra Bank (NRB). However, the central bank said that banks were free to launch such plans.

NMB Bank’s loan scheme is not available to all students. The bank will issue loans to a limited number of students from institutions with which it has signed an agreement.

Students can receive 40-80 percent of their college costs under the scheme, according to the bank. The money will be released in instalments based on the student’s excellence, labour and credibility, the bank said.

The loan will mature in four years and interest will be charged at a rate of 5-8 percent per annum. The student can extend the payback period by making a separate agreement with the bank. The scheme has been introduced to provide access to technical education for disadvantaged students, NMB Bank said.

Established 16 years ago, Himalaya College of Engineering offers Bachelor in Computer Science and Information Technology, Civil Engineering, Bachelor in Architecture, Computer Engineering and Electronics and Communication Engineering.