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Reconstruction Update

MoU signed to ease subsidized loan for housing reconstruction

Published On: 2019-10-27

Kathmandu, October 25

An agreement has been reached with an aim to facilitate the subsidized loan process targeted at earthquake-affected beneficiaries who took the first tranche of private housing reconstruction grant but were not able to construct their houses due to financial constraint.

The agreement was signed between the state-owned bank, Rastriya Banijya Bank, and UKAID- Sakchyam Access to Finance project. The agreement will facilitate the subsidized loan process for the beneficiaries in Dhading and Gorkha districts through three branches of Rastrya Banijya Bank.

Chief Executive Officer (CEO) of Rastriya Banijya Bank Kiran Kumar Shrestha and Team Leader of Sakchyam Access to Finance Nirmal Dahal signed the Memorandum of Understanding (MoU) in the presence of  Chief Executive Officer of the National Reconstruction Authority (NRA) Sushil Gyewali.

The project will facilitate the subsidized loan acquiring process to the beneficiaries by following due procedure of the bank through its branches in Dhunibesi and Nilkantha Municipality in Dhading, and Gorkha municipality in Gorkha respectivelt.

Speaking after the signing of the MoU, CEO Gyewali thanked the bank for playing a role in implementing the waiver introduced with an aim to help the beneficiaries who had not been able to build their houses due to financial constraint.

"The NRA took such initiative with an intent that nobody should be deprived of rebuiling a house due to financial constraint," said Gyewali. 'The effort by the state-owned Rastriya Banijya Bank to help the implementation of the government scheme is highly appreciated."

CEO of the Bank Shrestha said, the bank had been providing subsidized loan to various targeted groups through various schemes.

Team Leader of UKAID-Sakchyam Access to Finance Dahal said, they were partnering with the bank as beneficiaries had shown interest to take loan from Rastriya Banijya Bank.

The beneficiaries who have taken the first tranche, but have not been able to build the house can now take a loan of up to Rs. 300,000 for a maximum period of 5 years, according to a procedure issued last year. In this scheme, the bank or the financial institution provides loan at the interest rate of 2% above their base rates, and 5% of the interest is borne by the government as subsidy.

The beneficiaries have shown interest in taking loan from Rastriya Banijya Bank also because it has the lowest base rate.

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