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Nepali Congress calls for expansion of loan repayment time and interest capitalization

(A meeting of the Central Working Committee of the Nepali Congress Party is being held at the party’s Central Party Office, Lalitpur, Sanepa on Tuesday, 30 June, 2020. Photo: Roshan Sapkota-RSS)

KATHMANDU:- The special committee of the main opposition party Nepali Congress (NC) entitled ‘Investment, Infrastructure and Employment: Perspective and Sustainable Development’ has furnished recommendations to the Nepal Rastra Bank for its monetary policy-2077/78 for upcoming fiscal year.
The special committee has urged the country’s central bank to expand the loan repayment time along with capitalization of the interests by one to three years considering the most-affected and cash flow-striped businesses.

The NC committee made this recommendation in view of the need of the resumption of production, employment and supply chain when the multi-faceted impact of the COVID-19 are exacerbating the national economy.
In order to further speed up the employment and entrepreneurship promotion, the committee has demanded flowing loan to the small and medium-scale enterprises of all types under the priority sector lending.
It has recommended making arrangement for providing loan up to two million rupees without collateral through monetary policy so as to make the migrant worker returnees and those losing employment in domestic labour market entrepreneurs.
Besides, the committee has also recommended the banks and financial institutions to spend their corporate social responsibility (CSR) budget for training to potential entrepreneurs, their skills development, formulation of business plans and incubation.
The committee has also urged the central bank to expand the private sector lending by 20 percent and arrange banking capital up to 20 percent of the loan to those facing cash flow issues. It has also called for adopting flexible approach in the capitalization of the interests of all the loans facing trouble in repayment and re-scheduling of the payment.
Likewise, considering the gravity of the pressure mounting in the financial spheres, the committee has suggested to put forth the third phase of financial sector reform programme noting that the arrangement of strengthening fiscal inclusion promoting the use of fin-tech and modern payment solutions would enable fiscal stability and inclusion.
Among other recommendations are arrangement of subsidy loan to the construction materials related industries, subsidized refinancing in the areas capable of speedy rebounding and creating synergies in economy, adopting flexibility in loan re-scheduling targeting tourism sector and flowing the subsidy loan to promptly restoring industries mostly contributing to the production, employment and supply chair from the government-instituted fund of Rs 50 billion.

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