They have asked Nepal Rastra Bank (NRB) to incorporate strong measures in the upcoming monitory policy to ensure effective implementation of the incentive scheme, which is aimed at reducing the cost of production for exportable goods by bringing down the interest expenditure to make exporters more competitive in international market. [break]
“NRB had instructed all commercial banks to provide export credit to entrepreneurs a couple of years ago. However, banks are showing less interest despite our repeated attempt to secure loan under the scheme. So, we have demanded with the central bank to include measures which will facilitate us to get the fair-interest loan,” said Uday Raj Pandey who is coordinating negotiations with different government agencies on behalf of Nepali exporters associations for export promotion.
Associations representing producers and exporter of Readymade Garments (RMG), handicrafts, carpet, pashmina, silk, herbal products, tea, handmade papers and floriculture met the Governor of NRB Dr Yubaraj Khatiwada to put forward their demands.
The NRB had instructed all banks through a circular on April 6, 2010 to provide refinanced loan to exporters at 4.5 percent interest rate for a maximum of six months.
Exporters have also demanded that the NRB increase the maturity period to clear the loan to at least one year stating that existing six months of repayment period was very short and impractical.
“Non-cooperation of banks to extend the loan under the refinancing scheme and six months to repay the loan have discouraged exporters who are providing direct employment to at least 30,000 people,” said Pandey, who is also the president of Garment Association-Nepal.
Exporters have also demanded the central bank to strictly enforce the provision to provide loan for working capital purpose as the BFIs are currently providing loan for only pre-shipment of exportable products. They also demanded to cut interest rate by 0.5 percentage point to 4 percent under the scheme.
“We have also sought NRB´s initiation to instruct the BFIs to provide loan against the submission of purchase order, sales contract or any forms of export orders between the potential buyers and exporters in place of existing provision of producing LCs,” added Pandey.
Exporters also suggested that the NRB make arrangement to provide refinanced loan through Nepalese commercial banks without demanding any additional collateral.
“We are sure that we can increase annual export volume from existing Rs 60 billion to Rs 100 billion within a couple of years providing employment to over 75,000 people if our demands are fulfilled,” said Pandey. He said Governor acknowledged the problems facing country´s export sector and was positive toward the concern voiced by exporters.
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