March 21: Bhuwaneswar Yadav, a farmer of Gadhi-3 Chhitaha in Sunsari, was planning to take an agricultural loan as he was in need of investment to cultivate vegetables and fruits in four hectares of land. As per the plan, he went to the Rastriya Banijya Bank near his village to take loan. But to his disappointment, he could not get any loan.

“It’s already been 10 months since I tried to take a loan of Rs 10 million to modernize vegetable and fruit farming. But there is still no hope of getting any loan,” said Yadav.

Banks and financial institutions are constantly introducing various agricultural loan schemes. But eventually, most of the farmers end up dejected like Bhuwaneshwor Yadav. Although the statistics of Nepal Rastra Bank (NRB) show huge investments for agricultural loans, such loans never reach the farmers in reality.

Guriya Kumari Jhanani, another farmer, states that only those who have affiliations with the bank get loans. “Farmers like us have no access to banks. Due to which the hard working farmers always have to face trouble to acquire loans from banks,” she said. She complained that she had been trying to get a loan for 6 months but has not received it yet.

Talking with New Business Age, Yadav said that most of the farmers have been cultivating improved varieties of vegetables and fruits by taking loans from relatives and rich people of the village at 36 percent interest.

“The monetary policy introduced by the central bank also mentions about providing agricultural loans to the farmers for the promotion of agro-enterprises and businesses, but farmers like us have to face lots of problems in getting loans from banks,” added Yadav.

Chief Executive Director of Nepal Bankers Association, Anil Sharma also says that it is still difficult for farmers to get loans. Stating that genuine and small farmers have not been able to get agricultural loans, he said that farmers still continue to be deprived of banking loans. According to him, only about 85,000 farmers have received such loans in the last eight years.

Khojraj Katuwal, president of the Nepal Agricultural Machinery Entrepreneurs' Association, says that the banking sector should invest heavily in agriculture to uplift Nepal's agricultural sector and make it more commercial. He said that the attraction of the educated generation in the agricultural sector would also increase if the government implements the rule of not only keeping the physical property, but also intellectual property as collateral in the coming days.

NRB officials claim that they have not received any complaint from farmers regarding the issue of not being able to get agricultural loans. NRB spokesperson Gunakar Bhatta said that the NRB has made agriculture loan mandatory now, adding that 15 percent of the total loan has to go to the agricultural sector.

“Out of the total loans disbursed by the commercial banks, 11 percent has gone to the agricultural sector. However, if a bank is reluctant to give loan, it may be because of the current situation where banks do not think it is safe to make investments,” said Bhatta adding that about Rs 600 billion has already been invested in the agricultural sector so far.