Earthquake victims will now be able to get bank loans at just two percent to rebuild or repair their damaged houses. The Nepal Rastra Bank (NRB) is all set to launch a scheme that will enable the victims get loans at such a cheap interest rate.
The bank, which is planning to announce the scheme soon, will provide refinancing to the banks and financial institutions (BFIs) without interest, and the BFIs will have to provide the money to the victims at 2 percent interest rate.
“Homeowners in the Kathmandu Valley, whose houses have been damaged by the quake, will get the maximum loan of Rs 2.5 million,” said Min Bahadur Shrestha, spokesperson of the NRB. “Those outside the Valley will receive up to Rs 1.5 million.”
Shrestha said that this is the first ever case of refinancing at zero percent in Nepal. “This will provide a big relief to those whose homes have been damaged by the earthquake.” This facility will be available through commercial banks, development banks and finance companies, according to NRB. The loan, however, is not collateral free. “This scheme will not be available to those who don’t have any collateral,” Shrestha added.
If anyone wants loans exceeding the amount facilitated by the central bank, they will have to comply with the terms and conditions of the concerned financial institution for the surplus amount of money. “The maximum amount of loan that a Valley resident can apply for is Rs 2.5 million. If someone wants an additional Rs 5 million, he/she will get Rs 2.5 million at the interest rate of two percent, but will have to comply with the norms of the financial institution for the exceeding amount,” Shrestha said.
As of Wednesday’s records, according to the Home Ministry, 284,455 houses throughout the country have been fully damaged by the quake, while 234,102 houses have been partially damaged.