KATHMANDU: Governor of Nepal Rastra Bank (NRB), Maha Prasad Adhikari, has clarified that the interest subsidy provided for commercial agricultural loans has not been misused. Speaking at the 23rd anniversary of Sana Kisan Bikas Laghubitta Bittiyasanstha Ltd (SKBBL), the NRB governor stated that an analysis of the subsidies given so far revealed no discrepancy. He mentioned that the process of recovering misused subsidies by a few individuals has already started.

“Misuse of agricultural loan subsidy is a superficial matter. This program has been successful, and the effectiveness of the grant is good. The process of recovering misused subsidies is ongoing,” Adhikari said.

He claimed that the Ministry of Finance, following the government's plan, prepared the procedures for providing interest subsidies to youth in commercial agricultural loans, and the subsidies were distributed accordingly. Adhikari highlighted that 126,000 borrowers have received subsidies for agricultural loans, with most beneficiaries being women and small farmers. However, he clarified that the grants have been halted since September 2022 due to controversies.

Governor Adhikari emphasized the important role of small farmer development microfinance and small farmer cooperatives in entrepreneurship development, job creation, and expanding financial access and literacy. He noted that while problems have emerged in the cooperative sector recently, such issues have not affected small farmer cooperatives. The governor also mentioned that agricultural work, previously looked down upon, is now respected.

Former Governor of NRB, Dipendra Bahadur Chhetri, expressed the view that the subsidies given for agricultural loans had been misused. He argued that political instability has lowered the morale of the private sector, making them reluctant to invest.

Chief Executive Officer of SKBBL, Shivaram Prasad Koirala, highlighted the organization's role in youth entrepreneurship development and expanding inclusive financial access through simple loan provisions. He stated that microfinance loans through small farmer agricultural cooperatives have contributed to domestic production by developing entrepreneurship and creating jobs. Koirala informed that SKBBL's services have reached 550 local levels across the country, benefiting more than 1.1 million families and serving a population of 4.5 million.

Koirala also mentioned that youths sent to Israel to learn agricultural technology have returned to Nepal and engaged in agricultural work. The Council for Technical Education and Vocational Training (CTEVT) provided scholarships to students studying agriculture and veterinary science, and farmers participated in various activities, including observation visits to different countries like India.

Additionally, Koirala stated that SKBBL took a loan from the Asian Development Bank to operate the Rural Enterprise Financing Project (REFP). He claimed that SKBBL has effectively provided simple and easy loans to small farmers, poor and backward communities, women, and marginalized groups.