While the businesses and the people are reeling under the economic crisis incited by the COVID-19 pandemic, the Banks and Financial Institutions (BFIs) in Nepal are pressing the borrowers to clear loan installments and interests.
Stating that the fiscal year is coming to an end, the BFIs have insisted that borrowers clear all their dues by mid-July.
However, the borrowers are not able to clear the dues at one go as they are just resuming their businesses. They have urged the Nepali Government to extend the loan and interest payment deadline.
“Businesses have gradually started resuming operations after the government eased the lockdown. However, no business has reached the pre-lockdown level due to several factors, including a lack of raw materials and market. So, clearing dues in such circumstances is impossible,” said Kamalesh Agrawal, Vice President of the Confederation of Nepalese Industries.
Meanwhile, the BFIs have blacklisted more than 300 individuals and firms just in the last three weeks.
The BFIs have been blacklisting loan defaulters amid the business community’s requests to restrain from putting them in the list of loan defaulters citing the coronavirus pandemic.
According to the Credit Information Bureau (CIB), a total of 12,160 individuals have been registered in the defaulters’ list so far. It accounts for around 1% of the 1.5 million borrowers who have received a total credit of NPR 3.2 trillion.
CIB’s records reveal that an additional 306 new names were added to the list during June 15-July 9, 2020.
Meanwhile, the Nepali Government has registered a new bill at the Parliament to allow more agencies to work on credit information. The new bill will facilitate the flow of information to more lending agencies, which need to know about the credit history of potential borrowers to assess their creditworthiness.
As per the new bill, the lending agencies, including the BFIs, can avail services from credit information agencies.
The lending agencies include-
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