May 6: Nepal Rastra Bank is preparing to reduce the refinancing limit. According to NRB, only limited industries and businesspersons are getting access to renewal of loan facility. So, NRB has decided to reduce the refinancing limit to Rs 100 million from the proposed Rs 500 million.

NRB Governor Maha Prashad Adhikari said that with the introduction of this policy, businesspersons cannot take refinancing of more than Rs 100 million. He said that current policy has facilitated only the big industrialists.

“NRB’s current focus is to encourage the small and medium scale enterprises (SMEs),” said Adhikari. He said that downsizing the refinancing limit to Rs 100 million will benefit SMEs. NRB is planning to create a fund of Rs 100 billion and mobilize it in productive sector. Presently, only Rs 180 million has been mobilized from the Refinancing Fund.  

“We have instructed the banks to reduce interest rate and postpone the deadline for repayment. However, we can’t instruct the BFIs to give up the interest altogether,” he said.

According to him microfinance companies have not been able to renew loans. In the new work procedure, all BFIs will get access to the facility. “The enterprises which meet the criteria can benefit from refinancing easily. We will also work on making the facility easily accessible so that people don’t need to come to NRB for any process,” said Adhikari.

According to NRB, BFIs have collected deposits of Rs 3600.78 billion and have already mobilized Rs 3200.46 billion for loan. According to Adhikari, maximum amount of loan worth Rs 600.60 billion has been mobilized in the wholesale and retail sectors. Similarly, agriculture sector has been given Rs 200.20 billion loan and other productive sectors has been given a loan of Rs 500.32 billion.