Banks should invest in agriculture: PM
KATHMANDU,JAN 22:
In order to revolutionise the agriculture, Prime Minister Dr Baburam Bhattarai has expressed that the financial institutions need to divert minimum of fifteen per cent of their loan portfolio to the agro-sector.
“In the absence of investment in agriculture, the nation will be deprived from its chance on prosperity,” he said, addressing 45th anniversary of Agriculture Development Bank Ltd (ADBL) today. “We need to promote agriculture as a major productive sector for it is not dependent on energy,” he said, adding “if we fail to invest in agriculture Nepal will also fail in achieving the development goals since agriculture development translates as creation of more employment opportunities in turn reducing poverty.”
“We can not depend on the remittance to forever take care of our economy,” he pointed out, urging ADBL to utilise its outreach in the rural nook and corners of Nepal to increase the access of rural agro finance.
Finance Minister Barsha Man Pun also pointed out that the bank needs to focus more on its original clientele -the farmers. “ADBL that already has penetration in almost every district can promote agriculture and employment in the much deprived parts of the nation,” he said.
Recognising the importance of financing agriculture, the central bank has asked the banks the commercial banks to float minimum 10 per cent of their total lending to agriculture and energy sectors. The central bank governor Dr Yubaraj Khatiwada appreciated the bank’s entry in mobilising Youth and Small Entrepreneur Self-reliant Fund. The bank has signed an agreement with the fund worth Rs one billion which it will lend to the viable projects without collaterals.
“The bank should not allow the contraction in loans floated to agro and small enterprises despite its entry into commercial banking,” he said.
The restructuring of ADBL is not yet complete and the bank needs to focus on its corporate governance side along with reducing the amount of non performing assets, he added.
ADBL has collected deposits worth Rs 34.39 billion by the fifth month of the current fiscal year and floated loans worth Rs 18.36 billion during the period. The bank with depositor base of 645,000 is offering its banking services from 184 branches. Its 152 branches are any branch banking service enabled and 158 branches are providing ADBL remit service.
“The bank has been involved in mobilising the government’s youth self-reliance scheme, in distributing social security allowances along with providing crop and cattle insurance to the farmers along side its core banking functions,” said CEO of the bank Tej Bahadur Budhathoki.
ADBL has floated loans equal to Rs 340.83 billion in last 45 years among which Rs 300.45 has been repaid. The bank also launched its recently introduced services -letter of credit (LC) and foreign exchange services.
Source: THT
