PALPA: Despite a proliferation of banks and financial institutions ( BFIs ), farmers are still struggling to get bank loans, and are forced to take credit from traditional money lenders at high interest rates.
Dev Singh Saaru from Jhirubas-6 of Palpa frequented many financial institutions seeking group credit to start fishery, but to no avail. He then took loan from a local money lender, only to be burdened with high interest rate.
“Had the banks provided me the loan, I would have first settle the credit taken from local money lenders to escape from exorbitant interest
rates and would become a regular borrower of the BFIs ,” said Saaru, adding he has been rearing fish worth Rs 1.2 million.
Similar is the case with Sukdev Rijal who runs a cow farm in Madanpokhara, Damakada. He has 30 jersey cows. He was also demined bank loans, citing policy problems. “None of the banks are ready to invest in our projects,” he lamented, adding this trend is discouraging for farmers.
Like Saaru and Rijal, many farmers from the region are denied bank loans. Even state-owned banks like Agriculture Development Bank Limited ( ADBL ), Rastriya Banijya Bank (RBB) and Nepal Bank Limited (NBL) are reluctant to issue loans to farmers, let alone private sector banks.
RBB Branch Officer Bal Mukunda Pathak stressed on the need for policy reforms to resolve the problems. “For the purpose, high-level authorities have to take initiatives.”
Although there is growing attraction of youths towards farming of late, they are facing complicated bank processes while taking credit.
RBB has been providing loans to the underprivileged people in only four villages
in the district. Pathak said credit of up to Rs 1 million can be provided to an individual farmer.
Although the Nepal Rastra Bank has made mandatory provisions for BFIs to invest 12 percent of their total lending to agriculture and hydropower sectors, BFIs are least interested in doing so. They see investing in the farm sector riskier than lending to hire purchase and other non-productive sectors.
Baikuntha Nath Khanal, officer at the Office of Agriculture Development, said farmers would get relief only if they were provided soft loans from banks. “Lending to the farm sector should be made by looking at farmers’ investment,” he said, adding land valuation in rural areas should also be considered while providing loans.
Senior Agriculture Development Officer Mahendra Kaudal stressed on the need for political pressure for putting in place farmer-friendly policies. “They should help create an environment for banks and financial institutions to invest in the farm business,” he said.
source:the kathmandu post,7 july 2014
LINK
Dev Singh Saaru from Jhirubas-6 of Palpa frequented many financial institutions seeking group credit to start fishery, but to no avail. He then took loan from a local money lender, only to be burdened with high interest rate.
“Had the banks provided me the loan, I would have first settle the credit taken from local money lenders to escape from exorbitant interest
rates and would become a regular borrower of the BFIs ,” said Saaru, adding he has been rearing fish worth Rs 1.2 million.
Similar is the case with Sukdev Rijal who runs a cow farm in Madanpokhara, Damakada. He has 30 jersey cows. He was also demined bank loans, citing policy problems. “None of the banks are ready to invest in our projects,” he lamented, adding this trend is discouraging for farmers.
Like Saaru and Rijal, many farmers from the region are denied bank loans. Even state-owned banks like Agriculture Development Bank Limited ( ADBL ), Rastriya Banijya Bank (RBB) and Nepal Bank Limited (NBL) are reluctant to issue loans to farmers, let alone private sector banks.
RBB Branch Officer Bal Mukunda Pathak stressed on the need for policy reforms to resolve the problems. “For the purpose, high-level authorities have to take initiatives.”
Although there is growing attraction of youths towards farming of late, they are facing complicated bank processes while taking credit.
RBB has been providing loans to the underprivileged people in only four villages
in the district. Pathak said credit of up to Rs 1 million can be provided to an individual farmer.
Although the Nepal Rastra Bank has made mandatory provisions for BFIs to invest 12 percent of their total lending to agriculture and hydropower sectors, BFIs are least interested in doing so. They see investing in the farm sector riskier than lending to hire purchase and other non-productive sectors.
Baikuntha Nath Khanal, officer at the Office of Agriculture Development, said farmers would get relief only if they were provided soft loans from banks. “Lending to the farm sector should be made by looking at farmers’ investment,” he said, adding land valuation in rural areas should also be considered while providing loans.
Senior Agriculture Development Officer Mahendra Kaudal stressed on the need for political pressure for putting in place farmer-friendly policies. “They should help create an environment for banks and financial institutions to invest in the farm business,” he said.
source:the kathmandu post,7 july 2014
LINK
Comments
Post a Comment