Displaced to get intrest-free loanIn a bid to give momentum to the reconstruction drive that is moving at the snail’s pace, a Cabinet meeting on Monday decided to amend the working procedure, enabling quake survivors to take interest-free loans up to Rs300,000 on their under-construction house as collateral.
In a bid to give momentum to the reconstruction drive that is moving at the snail’s pace, a Cabinet meeting on Monday decided to amend the working procedure, enabling quake survivors to take interest-free loans up to Rs300,000 on their under-construction house as collateral.
Following this move, quake survivors who already were eligible to obtain Rs300,000 as housing grant, can now avail themselves of an equivalent amount from financial institutions. “The working procedure already endorsed by the Cabinet had the provision of sanctioning loan on the basis of collective surety,” NRA Spokesperson Yam Lal Bhoosal said.
According to him, the decision will give a significant boost to the reconstruction drive as it was introduced after consultation with the Nepal Rastra Bank and leading financial institutions. The reconstruction authority has said it will soon hold a meeting with the central bank to discuss a modality for issuing additional fund for loan at the earliest.
NRA Chief Executive Officer Govind Raj Pokharel said the amended working procedure allows A, B, C and D class financial institutions to issue loan either on the basis of collective surety or by keeping the under construction house as collateral. While micro-finance companies and cooperatives were open to issuing loans on the basis of collective surety, commercial banks, development banks and finance companies had sought a different arrangement.
The interest-free loan has to be paid back in five years. Financial institutions will be required to designate a separate officer to provide counselling and information about the loan. They are also responsible for addressing public grievances. Over 130,000 beneficiaries are said to be rebuilding homes at present. Reconstruction of as many as 50,251 houses has been over, according to the NRA.
The authority also blames “unavailability” of skilled manpower for delay in reconstruction. People trained by the NRA and other agencies after the earthquakes are leaving the country or the village in search of greener pastures.