Earthquake victims will be able to get bank loans at just two per cent to reconstruct or repair their damaged houses by the devastating earthquake on April 25, according to the central bank. The borrowers, however, must have collateral to get the loan.
The central bank is launching the first ever refinancing scheme at zero per cent that will help victims get loans at a cheap interest rate as most of the houses in the country have been either completely damaged or partially damaged making the lives of people more difficult. “The central bank will provide refinancing facility to the banks and financial institutions without interest, and they will lend borrower – for the reconstruction of their houses – at two per cent interest rate, according to the central bank that has got Rs 10 billion at zero interest rate from Inernational Monetary Fund (IMF). The rest of the amount will be raised from the domestic market through bonds. The IMF managing director Christine Lagarde wrote the central bank and Prime Minister about the IMF decision of providing the zero interest loan facility of Rs 10 billion. “The IMF is ready to provide more than Rs 10 billion loan, but will charge 0.25 per cent interest on over Rs 10 billion,” according to the IMF.
Homeowners in the Kathmandu valley, whose houses have been damaged by the earthquake will get a maximum of Rs 2.5 million, spokesperson of the central bank Min Bahadur Shrestha said. “Those outside the Valley can get up to Rs 1.5 million.”
The facility will be available through commercial banks, development banks and finance companies, according to the central bank that is preparing to bring a guideline in a week.
Victims, who wish to avail the loan from the banks and financial institutions, must submit the verified documents from their respective municipalities and village development committees that their houses have been damaged due to the devastating earth quake on April 25. The banks and financial institutions can fix the loan repayment period for the borrowers. However, the repayment period must not differ from their regular home loan schemes. The regular home loan schemes have a payback period of three to 20 years.
However, a borrower can also get more than the central bank fixed limit, in case they comply with the terms and conditions of the concerned financial institution for the surplus amount of money. “If borrowers want an additional Rs 5 million, they will get Rs 2.5 million at two per cent interest but will have to comply with the norms of the financial institution for the exceeding amount,” Shrestha said, adding that the borrowers will get loan only after examining their financial status to make sure that the loans will be recovered.
According to the Home Ministry, some 284,455 houses throughout the country have been fully damaged, while some 234,102 houses have been partially damaged by the earthquake by Wednesday.
Likewise, the government is also planning to build houses for victims who don’t have income source to assure loan repayment and collateral.

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