Nepal Announces Relief Measures For Covid-affected Enterprises, Individuals

Nepal's central bank has announced a set of relief measures for enterprises and individuals badly affected by the Covid-19 pandemic as the country's economic recovery is being reversed by the second wave.

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, reports Xinhua news agency.

While unveiling the monetary policy for the 2021-22 fiscal year that began in mid-July, Governor of Nepal Rastra Bank Maha Prasad Adhikari on Friday 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, will continue and allow more sectors including the manufacturing industry to get credits at a subsidised interest rate of 5 per cent.

The relief measures were announced as the economy, which was expected to grow by 4 per cent in the last fiscal year, is facing the risk of a downturn as the pandemic was still raging.

Adhikari said it is now difficult to see the expected growth due to the second wave of the pandemic.

Before the second wave, Nepal's economy was on the road to recovery with most of the closed industries having been reopened.

In June last year, 61 per cent of enterprises were fully shut down while 81 per cent of them were fully reopened by April.

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.