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Small, agro industries to get easy finance
KATHMANDU, MAY 14 -
Nepal Rastra Bank (NRB) has opened doors to big, medium, small and agriculture-based export industries to get cheap financial resources through export refinancing from banks and financial institutions (BFIs) at not more than four percent interest rate.
Of the Rs. 1 billion allocated for export refinancing this year, big and medium industries, cottage and small industries and agriculture-based industries will be able to get cheap refinancing of Rs. 300 million each.
Other export industries will get a share of Rs. 100 million. A revised monetary policy of the NRB this year has it that BFIs will get the refinancing at a mere 1.5 percent interest rate, while they are required to lend at not more than four percent interest.
Even B and C class financial institutions in addition to commercial banks can get refinancing facilities to provide loans for those who are real producers of exportable goods.
“The new provision is aimed at those in rural areas who have no access to foreign market directly,” an NRB official told the Post on Friday. This is the first time that the NRB has set the criteria for export refinancing after the banks and financial institutions demanded the same amid acute liquidity crisis.
The applicant banks will get refinancing of up to 80 percent of the amount mentioned in the export LC or export bill. The refinancing willbe for a period of up to six months. Although the central bank had set this idea a few years ago, no bank had approached it for such credits due to their profit centric motives, according to an NRB official.
“They were not interest in the idea due to its narrow spread rate,” he said.
The NRB has also prioritised the sectors for refinancing. Exports of agricultural products such as cardamom, ginger, tea, coffee, handicrafts, medicinal herbs, honey and juice will be given first priority.
The second priority will be given to Nepali handmade paper, silver jewelery, computer software and jute, while the third priority will go to leather goods, pashmina, carpet, garment and woolen carpet.
The fourth priority will be given to noodles, small transformers, iron and steel and zinc plate. Paper, plywood, polyester yarn, jute and wire will get the fifth priority.
Posted on: 2010-05-15 08:31
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