The government has arranged to extend the utilization period of concessionary loans up to five years. Private housing construction loans up to NPR 500,000 will be made available for those affected by natural disasters. Banks and financial institutions will be allowed to charge only 1.5 percent above the base interest rate. July 23, Kathmandu.
The government has set up provisions allowing concessionary loans to be utilized easily for up to five years. If a borrower takes a concessionary loan for a period of three years and makes timely payments, the loan can be renewed or a new loan can be obtained to enjoy an additional two years of concession. The government, amending the Interest Subsidy Procedure, 2082, has added a provision that in the case of loan renewal for loans disbursed under the Unified Interest Subsidy Procedure, 2075, the subsidy will be available for up to five years from the date the subsidy began.
For private housing construction loans provided to natural disaster victims, if banks and financial institutions do not receive grants from the National Disaster Risk Reduction and Management Authority, they will be required to obtain a self-declaration from the borrower. According to the amended procedure, “If a borrower fails to make loan payments in any quarter due to situational reasons but clears the arrears in the next quarter and resumes regular payments, banks and financial institutions can request interest subsidies covering the entire period, provided they verify the situational reasons and proper utilization of the loan.”
Additionally, under the Unified Interest Subsidy Procedure, 2075, loans disbursed with related services and conditions are ensured subsidy support. As per the procedure, agricultural and livestock loans will be provided up to NPR 50 million, women entrepreneurship loans up to NPR 2.5 million, and youth self-employment loans for returnees from foreign employment up to NPR 2 million. These loans will be periodic in nature with installment-based repayments.
