Thursday May 30, 2024
Thursday May 30, 2024

Agriculture sector in need of monitoring soft loans

Productivity in agriculture sector not up to investible amount as soft loans exceed budget

2021 Aug 14, 15:48, Kathmandu
File Photo: People engaged in Agricultural Work.

Though the State is increasing investment in agriculture, the expected result remains far from achieved. The implementation of the provision of soft loans is one of the State’s efforts to promote the agricultural sector.

The data shows during the last fiscal year (2020-21) 46,057 individuals had taken the soft loan of Rs 106.98 billion. This amount is more than 135 per cent of the budget allocated in the agri-sector in the current fiscal year (2021-22).

This fiscal year, there is more budget for the agricultural sector than in the previous year. Rs 45.09 billion or around 20 per cent more budget has been allocated against Rs 37.42 billion budget of the previous year for the agricultural sector.

Likewise, the size of the investable amount is expanding while on the other hand, the size of the production is diminishing. The rising dependency on agri-products provides a ground to doubt over the proper use of the agricultural concessional loan. Agriculture experts said the import of rice of around one billion per month suggested the misuse of such facility.

The number of farmers taking concessional loans has increased after Nepal Rastra Bank made it mandatory for all the commercial banks to invest 11 per cent of the total investable amount in the agriculture and livestock sector until July 15.

The tendency of those taking loans at low-interest rates for agriculture and livestock sector but not carrying out agriculture business is also seen in society, said Uddhav Adhikari, an agriculture entrepreneur.

Borrowers taking the soft loans get 5 per cent interest as a subsidy. "Some clever people register the agriculture farm and take concessional loans from financial institutions. They show that they have been doing agricultural works for some months and then gradually leave it," said Ram Krishna Dhakal, another farmer.

The monetary policy for the current fiscal year which was announced Friday by NRB Governor Maha Prasad Adhikari has sought to promote agricultural loans. The central bank has through the monetary policy determined that a 15 per cent budget of the total lending should be invested in the agriculture sector.

Agriculture economist Krishna Poudel said, "Although the bodies concerned have prioritised the agriculture sector, it is not found that the government has been monitoring whether or not those taking the concessional loans have invested in the agriculture sector."

The budget statement for the current fiscal year mentions that the country would be made fully self-reliant in agriculture within the coming five years by means of agriculture modernisation, commercialisation, and mechanisation. 


agriculture Nepal Rastra Bank Soft Loans Agricultural Sector Concessional Loan NRB Governor
Nepal's First Online News Portal
Published by Nepalnews Pvt Ltd
Editor: Raju Silwal
Information Department Registration No. 1505 / 076-77


Kathmandu, Nepal,


[email protected]

Terms of Use Disclaimer
© NepalNews. 2021 All rights reserved. | Nepal's First News Portal