KATHMANDU: The effectiveness of the government’s subsidized loan program, designed to boost production and employment through interest subsidies, has come under scrutiny.
According to Nepal Rastra Bank, a total of Rs 65.40 billion has been approved for 43,051 borrowers as of the end of Shrawan 2083.
Of the total approved credit, more than Rs 32.97 billion remains as an outstanding balance. To reduce the cost of these loans, the government has already provided over Rs 39.27 billion in interest subsidies. Despite the significant amount of public funds and credit deployed, questions are being raised regarding the actual utilization and economic impact of the program.
The largest portion of the subsidized loans has been directed toward commercial agriculture and livestock farming. Data from the central bank indicates that over Rs 40.18 billion has been approved for 23,725 borrowers under this category. Out of this, more than Rs 26.70 billion remains outstanding. While substantial capital has been mobilized in areas such as agricultural production, poultry farming, seed processing, and cold storage, concerns persist regarding the tangible outcomes of these investments.
