June 11, 2020 | Investopaper
Sixteen textile industries have received concessional loans with interest subsidy. They have used such facility as there is an arrangement to provide soft loan to the textile manufacturing industry. Last Mangsir, the government revised the working procedure on concessional interest rates and also made arrangements to provide concessional loans to those who have received training from the textile industry and CTEVT on the old seven types of loans. The figures are of the garment traders who have taken loans after the same arrangement. So far, the CTEVT-trained people have not received any loan.
Five Per cent Interest Subsidy
Until Chaitra, almost Rs 2.12 crores worth of such loans have been issue. The government provides 5 percent interest subsidy on this loan. One can pay the remaining interest after reducing 5 percent on the interest rate fixed by banks and financial institutions. When taking a loan for the textile industry, you have to keep a collateral. Before the issuance of the working procedure, the textile industry, which has been operating till Shrawan 1, 2075, will also get 5 percent interest subsidy from Mangsir 24, 2075.
The government had introduced interest subsidy scheme to encourage the indigenous textile industry. Under this program, a loan of up to Rs. 50 million is available to run a textile industry. The government initially provided 5 to 6 percent interest subsidy for seven types of loans, including agriculture and livestock, educated youth self-employment, projects of youth after returning from abroad, women entrepreneurs, Dalit community business development, higher and technical and vocational education, and private housing construction loans for earthquake victims.
Later, nine types of loan programs have been created by linking the textile industry and CTEVT. The program of giving interest subsidy on commercial agriculture and livestock loan has come in 2073 BS. The government has launched an integrated program of interest subsidy by including agricultural credit in one place since Karthik 20, 2075.
Current Status of Concessional Loan Program
As many as 28,660 people have received concessional loans worth Rs 53.87 billion under the concessional rate program. Out of them, only 93 percent (Rs. 50.46 billion) has been disbursed under the heading of agri-commercial agriculture and livestock. According to the NRB, 23,409 borrowers have taken the loan facility. The loan repayment period of interest subsidy is a maximum of 5 years.
Banks and financial institutions can add premium (interest rate) up to a maximum of 2 percent only to the base rate on concessional loans. Therefore, BFIs did not show interest in such loan disbursement. For this reason, the NRB had directed the banks and financial institutions to disburse concessional loans other than agriculture by specifying the number. Out of which, every commercial bank had to disburse at least 500, development bank 200 and finance company 100 concessional loans till Ashad 2077.
The directive will be implemented more strictly from the next fiscal year. The government has made an arrangement in the forthcoming budget that at least 10 branches of every commercial bank. Likewise, 5 branches of development banks should disburse non-agricultural concessional loans.
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