November 1: Two years ago, Nepal Rice, Oil and Pulses Industry Association had requested the government to introduce a law on debt recovery. The association had decided to demand for such law during its 43rd general assembly, urging the government not to allow credit transactions for more than a month.

A few months ago, the Birgunj Chamber of Commerce and Industry also strongly raised this demand in its 46th general assembly. The president of the association, Subodh Kumar Gupta, in the presence of the finance minister drew the minister's attention to the fact that the market had shrunk after the onset of Covid-19 and had been further threatened by credit transactions. He also demanded to bring effective laws to protect the economy from accidents.

The businessmen have also been demanding stern laws related to loan recovery. Till date, the government has not taken effective steps in this regard.

Ganesh Prasad Lath, president of the Madhes Chapter of the Federation of Nepalese Chamber of Commerce and Industry, has accused the government of being indifferent to solving the problem of credit transaction. The private sector does not fail to give this suggestion to the government every year in the pre-budget discussions. However, Lath complains that the budget has not addressed the demand yet.

Nepal is also not untouched by the global recession in the aftermath of the coronavirus pandemic. Private sector leaders say that its impact is even greater in an import-oriented economy like ours. The import control policy adopted by the government to reduce the pressure on the foreign exchange reserves and the lack of investable funds in the financial sector has led to a decline in production and supply.

Gupta said that while the average production of industries has fallen to 20 to 25 per cent of the total capacity, there is competition in the market to acquire loan.

“There is no demand in the market. Production has decreased. In such a situation, there is a competition on who will give more credits,'' said Gupta.

According to entrepreneurs, the lending period has almost doubled in the post-pandemic era. Navneet Agarwal, a businessman, shared that pre-coronavirus payments used to come within three months, but now they have stopped coming even after six months. In the past, it was a situation of getting paid in one to one and a half months after selling the goods.