‘High interest rates affect businessmen’

By A Staff Reporter

Kathmandu, Oct. 17: President of Nepal Chamber of Commerce (NCC) Rajendra Malla has said that industrialists and businessmen have been  affected by the increase in interest rates.

He said that the high spread rate and 6 per cent premium on the base rate while providing loans by the  banks and financial institutions had hit the businessmen hard.

Inaugurating the 15th Annual General Meeting of the Chamber of Commerce and Industry, Rupandehi, on Sunday, President Malla said that due to the lack of control over the rising interest rates, all industrialists were in trouble, and the high inflation had also affected the general people.

He said that the country's economy has been badly affected because of the COVID-19 pandemic and the Russia-Ukraine war had further affected it.

"At a time when the country's economy is under pressure, the recent increase in the interest rates has put the businessmen in trouble," he added.

President Malla said that the interest rate would decrease if there was an arrangement to reduce the existing spread rate from 4.4 per cent to 1 per cent, keeping the base rate at the lowest possible point and adding a premium up to a maximum of 2 per cent of the base rate of the loan.

He suggested that if the capital expenditure in the accounts of the local, provincial and federal governments could not be spent, there should be an arrangement to provide loans of 90 to 95 per cent of the amount through commercial banks to increase the liquidity.

According to him, the private sector should increase its activities to make the economy of the country sustainable, “However, due to the rising interest rates, the economy itself could collapse,” he said. He emphasised that appropriate initiatives should be taken to conduct regular air flights to the third countries, including India from the Gautam Buddha International Airport.

President Malla said that Lumbini should be engaged in making a self-reliant economy through the promotion of tourism and modernisation and mechanisation of agriculture.

He said that industries should be established and operated easily within the Bhairahawa Special Economic Zone. He also urged the government to facilitate trade and business through the management of customs checkpoints.