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Govt disburses Rs 230m soft loans to sick industries
KATHMANDU, JAN 03 - In an effort to support the revival of the sick industries in the country, the government has disbursed a total of over Rs 230 million concessional loans by the end of mid-December, 2003, according to the official data of Nepal Rastra Bank.
The data also reveals that the government has released such soft loans to sick industries out of the total allocated budget of 1.50 billion for the current fiscal year.
Talking to The Kathmandu Post, Krishna Gyawali, Joint Secretary at the Ministry of Finance said that the government has set the identification criteria for sick industries as per the demand put forwarded by the private sector.
"Giving sincere attention to the private sector’s request, the government has also decided to allocate half of the total allocated budget to sick industries of tourism sector. The remaining half would be directed to sick industries of manufacturing sector and others," he added.
Gyawali informed that those small and medium enterprises with the loan exposure less than Rs 2.5 million and recording a business decline by at least 25 per cent during last three years of operation would be eligible for such soft loans.
The data further reveals that huge chunk of the total disbursed soft loans has been drawn by hotels and resorts of Pokhara, a tourism hub centre of the country.
During the eight- year-long-insurgency, tourism sector, one of the major foreign money earning sectors, has suffered the worst, thereby dragging down a large number of hotels and resorts into the list of sick industries.
In a bid to lessen the financial burden of the sick industries, the government had slashed the interest rate of such soft loans to 12 per cent from 25 per cent this year.
According to the announced program, the sick industries have to pay the interest amount in advance to the concerned commercial banks.
The reduction of interest rate follows after the central bank cut down the refinancing rate by one per cent point, bringing it to two per cent from three.
Similarly, the commercial banks and finance institutions also have slashed their interest rate by one per cent from previous year’ rate of 6.5 per cent.
Apart from that, the government has re-defined the sick industries in case of hotels. Unlike the previous year’s decision of taking the total capacity of the hotel as a base, it has decided to take total operating profit earned during past two years as a benchmark for listing hotels under the category of sick industries.
According to the official data, The Begnas Lake Resort and Villa, Riverside Spring Resort, Hotel Bajra Guest House, Hotel Green Peace, Hotel Barahi, Hotel Hungry Eye, Annapurna Holiday Inn, New Crystal, Hotel Snowland, Hotel KC, Keye Koj Cottage, Full Moon Lodge have already drawn soft loans in this fiscal year.
Similarly, Kantipur Hotel, Hotel Simrik, Hotel Moon Light, Base Camp Resort, Hotel Mountain, Dahal Carpet, Chapagaun Automobiles and Jaya Nepal Automobiles have also drawn the loan under this scheme.Posted on: 2004-01-04 04:35
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