By A Staff Reporter
Kathmandu, Dec. 31: The relief programmes announced to rehabilitate the COVID-19 affected business and enterprise has proven effective for the small and medium enterprises (SMEs).
More than 33,000 small clients that had up to Rs. 1.5 million bank loan portfolio have obtained the government financial relief. The Nepal Rastra Bank (NRB) has approved the refinancing package worth Rs. 82 billion.
“SMEs and vulnerable businesses have been particularly benefitted by the relief and rehabilitation programmes of the government and the central bank,” said Maha Prasad Adhikari, Governor of the NRB, in a virtual interaction with the Nepalese Association of Financial Journalists on Wednesday.
Likewise, about Rs. 9 billion relief to the businesses and industries has been provided with the 2 per cent discount in interest of bank loan.
“Relief programmes are being gradually utilised by the needy businesses. Currently, there is enough liquidity in the system and a sizable number of entrepreneurs are utilising their own funds in the post-lockdown situation. The government-announced relief programmes would be fully subscribed within a couple of months,” said Adhikari.
Likewise, private sector lending has increased significantly in the last two months of 2020 which has given hope to both the banking industry and economy.
He said that the central bank had given priority to maintaining liquidity in the market and ensuring that the enterprises do not experience resource crunch when they need it.
According to him, the financial sector regulator has been planning to evaluate the banks and financial institutions (BFIs) on the basis of their implementation of the special relief packages announced in the wake of the coronavirus pandemic.
This kind of evaluation would be made after April 2021 while the bank’s contribution to the relief programmes would be measured after the second quarter of the current fiscal year 2020/21.
Governor Adhikari also said that the economy did not contract as it was expected earlier this year. “The recovery trend is quite good globally and it is replicated in Nepal as well. Only 6 per cent businesses were running in full capacity in May this year while the number has gone up to 57 per cent in December,” he said.
Construction and trading sector are doing particularly well while tourism is the sector that will have a delayed recovery.