The Nepal Chamber of Commerce (NCC) has presented a detailed set of policy recommendations to Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari, outlining measures to achieve 6% economic growth while maintaining inflation below 5.5% in the upcoming fiscal year. The proposals come at a critical juncture as Nepal’s economy continues to grapple with the lingering effects of multiple crises, including the COVID-19 pandemic and global supply chain disruptions.
Highlighting four consecutive years of economic volatility, the NCC emphasized how these challenges have created a significant gap between demand and supply, eroded private sector assets, and discouraged much-needed investment despite substantial liquidity in financial institutions. The business body pointed to the severe impact on entrepreneurs, with over 100,000 individuals being blacklisted in the past three years due to loan repayment difficulties. To address this, the NCC has proposed industry-specific loan rescheduling through joint lender-borrower reviews, aiming to restore business confidence and prevent the collapse of viable enterprises.
The recommendations cover a wide range of monetary and financial sector reforms. Key proposals include implementing a permanent single-digit interest rate regime for SMEs, maintaining the bank rate at 5%, and establishing a 3.5% spread rate. The NCC has also called for significant changes in real estate financing, suggesting 100% risk weighting for loans above Rs 5 million and more flexible terms for housing loans up to Rs 50 million. These measures are designed to stimulate credit flow while maintaining financial stability.
Recognizing the ongoing crisis in the cooperatives sector, the NCC has urged immediate intervention to stabilize these institutions and protect small entrepreneurs and savers. The chamber has also proposed innovative solutions to bring informal economy funds into the banking system, including the removal of cash deposit limits and ending police intervention in legitimate cash movements.
To boost foreign exchange earnings, the NCC has recommended several tourism-friendly measures, such as allowing foreign visitors to bring up to $5,000 and facilitating the circulation of high-denomination Indian currency notes. The chamber has also suggested deploying Nepal’s substantial foreign exchange reserves (nearly Rs 2,500 billion) to stimulate economic activity, with more than 35% allocated to infrastructure development.
The comprehensive policy recommendations extend to supporting export-oriented industries through concessional loans and duty-drawback facilities, as well as promoting electric vehicle adoption with an 80% import-loan facility. The NCC believes these coordinated measures, combined with closer alignment between monetary and fiscal policies, could mark a turning point in overcoming Nepal’s prolonged economic slowdown and setting the country on a path to sustainable growth.
