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Kathmandu Monday October 01, 2001 Ashwin 15, 2058.
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Delay in sanctioning loans hampering CGISP effectiveness
Post Report
KATHMANDU, Sept 30 - Experts present at an evaluation programme of the
Community Groundwater Irrigation Sector Project (CGISP) have stressed upon the need to
shorten the time taken to sanction loans for farmers.
Addressing the programme organised by Development Finance Department of the
Nepal Rastra Bank (NRB) here today, Krishna Pradhan, Executive Officer at the NRB said,
"The present findings show that it takes a minimum of 43 days for a loan to get
sanctioned."
According to the present system, the farmers first approach the Participating
Financial Institutions (PFIs) for the loans. The PFIs in turn asks the NRB branch. After
the necessary investigations and preliminary survey, the NRB branch offices coordinates
with its headquarter and asks for the loan from the Rural Self Reliance Fund (RSRF). The
loan is finally approved and disbursed.
There is a need to shorten the period so that the targeted farmers can be
more benefited, he added. The CGISP is a US $ 42 million seven-year project that is set to
complete by December 2004. The CGISP is financed by Asian Development Bank (ADB), Manila.
The project targets to install 15000 Shallow Tube Wells to irrigate
approximately 60,000 hectares in 12 districts of the Terai region. Farmers seeking to
install the shallow tube wells seek loans from the Nepal Rastra Bank through the PFIs.
Currently Nepal Bank Limited and Sahara Cooperatives of Jhapa are the only PFIs recognised
by the central bank.
Addressing the programme Aqmal Siddhique, a high level official from ADB
headquarters in Manila, pointed out the problems hampering the successful implementation
of the CGISP.
"The important issues are drawing of credits from the imprest account,
inadequate physical capacity of the PFIs and procedural problems related with the approval
of new PFIs," he added.
Pradhan, presenting a paper on progress report of the project, informed that
24 Village Development Committees from four districts have been benefited in last fiscal
year. He said that Rs 3.3 million was disbursed to install 91 tube wells in the area.
Gopal Kafle, Director at the NRB, also presenting a paper on evaluation of
CGISP, said, "The lengthy process of depositing sanctioned loan in the account of
RSRF has created problems."
"The loan granting period should be shortened and simplified by revising
the existing procedural aspects," he added.
The loan is provided to the farmers without any collateral. Further no
subsidy is provided to the farmers on installing the shallow tube wells. However, the ADB
provides training and other technical assistance to the farmers.
Speaking on the same occasion, Bijayanath Bhattarai, Deputy Governor of the
NRB, expressed hope that the project would meet its target before the project life comes
to an end. "Continuous evaluation of the project would increase the productivity and
enhance the efficiency of the PFIs," he said.
Jitendra Ghimire, Deputy Director General at the
Department of Irrigation and Narayan Prasad Poudel, Deputy Director at the NRB, also spoke
on the occasion.
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