subsidy for agriculture loans to youth

  • NRB to revise working procedure
  • The revision enables farmers aged above 45 years to avail the facility
- POST REPORT, Kathmandu
subsidy for agriculture loans to youth

Nov 30, 2014-

Nepal Rastra Bank is all set to revise the “Working Procedure on Interest Subsidy for Agriculture Loans to the Youth”, enabling farmers aged above 45 years to get the credit at 6 percent.

As per the existing provision, only the youths aged between 21 and 45 are

eligible for the credit from commercial banks.

In the revision, the central bank will also enable all types of banks and financial institutions (BFIs) to provide such loans.

Nepal Rastra Bank (NRB) Governor Yubaraj Khatiwada said on Sunday the central bank is all set to open the “limited window” for farmers aged above  45 years as per the demand from lawmakers and farmers. He said development banks, finance companies and micro-finance companies would also be allowed to issue such credit.

“Considering the need for better monitoring and relatively lower lending from commercial banks to the agriculture sector, we had provisioned only commercial banks could provide such loans,” said Khatiwada at a press meet organised by the Finance Ministry here. “However, amid growing interest of development banks and micro-finance companies in such loans, we are opening the door for all types of BFIs by arranging a strong provision of monitoring and reporting.”

The revised working procedure will also adopt flexibility on collateral to be put up to receive the loan. The governor said the central bank will put in place the provision, under which the lenders could accept collateral of agriculture land not having roads access. He, however, made it clear the loans would be based on the collateral security.

During a recent discussion at the Parliamentary Agriculture and Water Resource Committee, lawmakers had demanded a provision that youths be issued the loans without collateral.

To attract rural youths towards agriculture, the government in the budget had announced it would offer a 4-percent interest subsidy

on agriculture loans. Banks take 10 percent interest on such loans.

In line with the budgetary provision, the central bank unveiled the working procedure, which states an individual can avail the facility on loans up to Rs 10 million.

Grievance cell set up

KATHMANDU: The Finance Ministry on Sunday formally set up a grievance cell which will accept complaints and comments about the ministry and its subordinate units. The cell named “Bigool Kaksha” will be headed by a joint secretary overseeing the ministry’s monitoring division. People can register their complaints at 01-4200418 or a toll free number -- 1118. They might also e-mail at bigool@mof.gov.np or fax at 01-4200468. Details of those filing the complaints will be kept secret as long as s/he does not want the identity be kept secret. Finance Minister Ram Sharan Mahat said it would help solve the people’s problem.

Published: 01-12-2014 10:20

User's Feedback

Click here for your comments

Comment via Facebook

Don't have facebook account? Use this form to comment