Nepal Rastra Bank Eases Loan Assessment for SMEs and Agriculture

Kathmandu. Nepal Rastra Bank has introduced facilities targeting the agriculture and micro, small, and medium enterprise sectors by releasing the annual review report of the monetary policy for the fiscal year 2082/83. Under the new arrangement, the collateral valuation process for small loans has been simplified.

A policy has been introduced to determine the loan repayment schedule for farmers in line with their production cycle.

• Collateral valuation for loans up to 1 million can be done by bank employees themselves

With the objective of promoting agriculture and micro, small, and medium enterprises, the Rastra Bank has significantly facilitated the collateral valuation process. Now, for loans up to NPR 1 million in such businesses, the collateral to be kept as security can be valued directly by the employees of the bank and financial institutions.

Previously, collateral valuation had to be done through external professional valuers, but now for small loans, this process is expected to be simpler and less expensive.

• Agricultural loan repayment schedule at harvest time

Considering the specific nature of the agricultural sector and the seasonal income of farmers, the Rastra Bank has also improved the agricultural loan repayment system. According to the new policy, when determining the repayment schedule for agricultural loans, direct coordination must be made with the nature of agricultural produce and production.

It has been made mandatory for banks and financial institutions to establish a repayment schedule only after coordinating the time when farmers harvest their crops or sell their produce and receive income with the loan installment payment time.