Quake-affected to be able to get subsidised credit

- Advertisement -

Kathmandu, September 26

The Cabinet has endorsed a working procedure to provide subsidised credit to earthquake victims.

The identified eligible beneficiaries, who have signed agreement with the local bodies to avail government’s aid to reconstruct individual houses but have been unable to start reconstruction due to lack of adequate funds, can apply for subsidised credit worth Rs 300,000. The loan will have a payback period of five years.

The integrated working procedure for subsidised credit, 2018 has provision to provide five percentage point interest rate subsidy on the interest rate charged by the banks and financial institutions (BFIs). However, the BFIs can charge the quake victims two per cent premium on base rate.

“Suppose, bank A has 10 per cent base rate, it can charge the quake victim an interest of up to 12 per cent. The government will subsidise five percentage points, which means the borrower will be able to avail credit at seven per cent,” said Pitambar Ghimire, spokesperson for the National Reconstruction Authority (NRA). “BFIs cannot charge any additional service fees on such credit floated to quake-affected people to reconstruct individual houses.”

Ghimire further said that the low-income groups, who are beneficiaries of government aid, will be able to rebuild their houses and individual housing reconstruction will cover the optimum beneficiaries. BFIs will issue such loans on group guarantee or against collateral. The NRA has said that the winter season is favourable time for housing reconstruction and the scheme of subsidised loan is expected to be effective.

The working procedure has put some conditions to avail subsidised loan from BFIs. Those wanting to avail such loan should not have taken any institutional grants, except government aid, to rebuild house. And the quake-affected, who have another house that is fit to live in (in any area), cannot apply for subsidised credit.

The post Quake-affected to be able to get subsidised credit appeared first on The Himalayan Times.

Written by Sandeep
This news first appeared on https://thehimalayantimes.com/business/quake-affected-to-be-able-to-get-subsidised-credit/ under the title “Quake-affected to be able to get subsidised credit”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.