It has been two months since Agriculture Development Bank Limited (ADBL) asked its branches to provide loans to earthquake survivors to rebuild their houses, but not a single loan has been sanctioned.

The bank says there has hardly been any demand for the loan. “I have instructed our branches in earthquake-affected areas to entertain the loan requests, but I have not got any information about such requests yet,” said ADBL CEO Lila Prakash Sitaula. “So far, just two individuals have inquired about the loan, that too at our headquarters. I asked them to talk to the branches concerned.”

According to a working procedure on the refinance facility introduced by the Nepal Rastra Bank (NRB) in May 2015, banks and financial institutions (BFIs) will receive refinance from the central bank at zero percent interest while they have to extend the loans to the quake-hit at 2 percent rate to rebuild their houses. Only the owners of the houses that have been rendered uninhabitable can receive the loans. Home owners in the Kathmandu Valley are eligible to get a maximum of Rs2.5 million, while those from outside can get up to Rs1.5 million, according to the working procedure.

Laxmi Bank has also reported “limited” inquires for such loans. The bank, which launched “Micro Mortgage Scheme” last month for the quake-hit, said about a dozen individuals have taken the loans so far. The bank provides the loans through its microfinance subsidiary—Laxmi Laghubitta Sanstha.

Laxmi CEO Sudesh Khaling attributed the “not-so-encouraging” response from prospective borrowers to “complicated procedure” and the fact that many quake-hit are waiting for the government grant.

“Most of the people who enquired about the loan did not come back after we informed them about procedures such as the requirement for them to get it confirmed by local authorities they did not have any other houses besides the one damaged by the quake,” he said.

Khaling said the demand for the loan from the Kathmandu Valley has so far been nil. “It is probably due to the fact that the authorities have just started clearing house designs.” Despite complaints about the “complicated procedure”, the central bank does not have any immediate plan to revise the working procedure. NRB Deputy Governor Shiba Raj Shrestha said the central bank is not sure whether the low demand for the scheme has anything to do with the working procedure. “As aftershocks are still being felt, people may not have wanted to rebuild houses immediately,” he said.

Initially, the banks themselves delayed the launch of the scheme showing concerns such as disparity between the refinance period (maximum one year, but room for extension) and maturity period (more than 10 years) of the loan, and low level of spread rate. To encourage BFIs, the central bank allowed them to categorise the loans extended under this scheme up to Rs300,000 as deprived sector lending.