Kathmandu (Nepal), August 15: Nepal's central bank on Friday announced a set of relief measures for enterprises and individuals affected badly by the COVID-19 pandemic as the economic recovery is being reversed by the second wave of the virus.
The Nepali government was forced to re-impose a lockdown in late April in the Kathmandu Valley and other parts of the country to cope with the second wave of the epidemic that befell earlier in the month, a move that is cutting short the recovery process.
While unveiling the monetary policy for the 2021-22 fiscal year that began in mid-July, Governor of Nepal Rastra Bank Maha Prasad Adhikari announced a number of relief measures, including the extension of loan repayment deadline, reduction of instalment amount, restructuring and rescheduling of loans and credits at cheaper interest rates, for enterprises and individuals suffering from the epidemic.
For restaurants, party venues, public transportation services, educational institutes and the entertainment sector which have been hit hard by the pandemic, the repayment deadline is extended by one year.
"If the borrowers in these sectors were supposed to pay the loans by mid-January next year, they can pay the loans within an additional one year," said Adhikari.
The central bank has also allowed these borrowers to pay loans in at least four instalments so as to ease the pressure on them.
Under the new policy, the entire tourism and movie industry can have its loans rescheduled and restructured as well.
The business continuity credit plan, introduced in the previous fiscal year to help firms to pay their employees and continue their businesses, shall continue and allow more sectors including the manufacturing industry to get credits at a subsidized interest rate of 5 percent.
The relief measures were announced as the economy, which was expected to grow by 4 percent in the last fiscal year, is facing the risk of a downturn as the coronavirus hangs on.
Adhikari said it is now difficult to see the expected growth due to the second wave of the pandemic.
Before the second wave hit, Nepal's economy was on the road to recovery with most of the closed industries having been reopened. In June last year, 61 percent of enterprises were fully shut down while 81 percent of them were fully reopened by mid-April, according to two separate studies conducted by the central bank.
The latest monetary policy also offers concessional loans to any company ready to set up a factory to produce recognized COVID-19 vaccines in the country.
Source: Xinhua