KATHMANDU, July 27: Nepali exporters have welcomed relaxation that Nepal Rastra Bank (NRB) effected on the refinancing scheme, saying that the move might contribute to boost Nepal´s export sector at a time when the government failed to bring out a full-fledged budget.
The NRB had relaxed some of the provisions related with lending under the Refinancing Scheme under which exporters can get consessional loan at 4.5 percent interest rate when it unveiled the Monetary Policy for 2012/13 on Wednesday.
Under the new offer, NRB has stated that it would provide refinancing loan to concerned commercial banks on the day they issue pre-shipment and post-shipment loan to exporters of readymade garment (RMG), woolen carpet, Pashmina, handicrafts, among others.
“This announcement has enabled us to secure special concessional loan for pre-shipment or post-shipment propose without submitting Letter of Credit (LC). It will facilitate us to get loan at least two months prior to shipments to overseas importers,” said Uday Raj Pandey, who is coordinator of eleven associations of Nepali exporters.
Pandey also praised the commitment of Governor Yuba Raj Khatiwada to extend the maturity period of refinancing loan. "This will provide sufficient time for exporters to repay their credit to the concerned commercial banks," said Pandey.
The central bank has also promised to simplify the lending process by recognizing buying-selling contract between importers and exporters, in place of existing mandatory provision of producing LC by exporters for loan purpose.
He, however, was cautious about the effective and sincere implementation of the commitments made in the monetary policy. The eleven associations of exporters have asked the NRB to instantly circulate the new guidelines among commercial banks to ensure prompt implementation of the policy.
Around a dozen associations of exporters had recently requested the NRB to simplify the process of concessional credit for them under the refinancing scheme, which was announced a couple years ago as an effort to give new lease of life to country´s slackening export sector.
Amid rising production cost of major exportable goods weakening their position in the international market, the exporters had requested to NRB to announce strong steps in monitory policy to ensure simplified lending for exporters.
Though NRB had instructed all commercial banks to provide export credit to entrepreneurs a couple of years ago, banks have shown less interest to issue refinanced loan to exporters.
Stating that banks failed to extend cooperation in implementing the scheme, exporters had placed written demands to the governor Khatiwada for simplification in refinanced loan.
They have also claimed that annual export volume would go up to Rs 100 billion within two years from the existing Rs 60 billion, pushing up employment in export sectors to over 75,000 from the existing around 30,000, if the government created favorable business environment for exporters.