Money
Fund planned for quake-hit businesses
The government has been working to establish a Reha-bilitation Fund to help earthquake-affected businesses and the related working procedure has neared completion.The government has been working to establish a Reha-bilitation Fund to help earthquake-affected businesses and the related working procedure has neared completion.
The fund, which will be placed under Nepal Rastra Bank (NRB), will provide interest subsidies to earthquake-affected sectors including housing, agriculture, trading and tourism.
The size of the fund has not been finalized. NRB has proposed a fund of Rs20 billion, but Finance Ministry officials said that it would be smaller. Finance Joint Secretary Madhusudan Pokharel
said that the fund would
be in the neighbourhood of Rs10 billion.
He added that a final decision on the matter would be taken after holding discussions with the new yet-to-be-appointed finance minister. Initially, the central bank had proposed a fund of Rs10 billion. But the Finance Ministry had urged it to first study the needs of quake-affected businesses and decide the size.
According to Pokharel, quake-hit businesses will get refinancing through banks and financial institutions. “The interest rate has been proposed in the range of 4-5 percent,” he said. Earlier, the central bank had sent a draft of the working procedure to the ministry.
The government had announced establishing a fund to support various enterprises related to these sectors in the budget statement for fiscal year 2015-16.
The Finance Ministry has said that it has set aside adequate funds under the miscellaneous heading, and the necessary resources for the fund will be transferred after its size has been finalised.
The government has allocated a total budget of Rs92 billion for reconstruction purposes. Like other reconstruction tasks, the establishment of the rehabilitation fund had also been delayed.
Finance Secretary Sunman Sharma said that the fund would be established as soon as possible. “Once the new finance minister is appointed, consultations will be held on the working procedure,” he said. “We have planned to introduce and operate the fund after Dashain.”
As per the Post-Disaster Needs Assessment (PDNA) conducted by the National Planning Commission (NPC) with support from donors, the housing sector witnessed the highest losses of Rs350 billion, while the commercial sector suffered damage and business losses valued at Rs16.95 billion. Tourism suffered total losses of Rs81 billion, while the farm sector suffered Rs28.36 billion in losses.
Meanwhile, the central bank has released the working procedure for providing refinance facility for the reconstruction of damaged houses. As per the policy, victims in the Kathmandu Valley can get loans of up to Rs2.5 million from banks and financial institutions at 2 percent interest, while those from outside the valley can borrow up to Rs1.5 million.
The central bank has also created a provision allowing earthquake-hit borrowers to get their loans rescheduled by one year. However, NRB Spokesperson Trilochan Pangeni said that there had been few takers so far.