Interest Rate Concession: Base Rate + 0.5% for Gen Z Movement Recovery Loans

Published on September 27, 2025

The Gen Z Movement created extraordinary disruptions in Nepal’s economy, leaving many industries and businesses financially distressed. To aid recovery, the Nepal Rastra Bank (NRB) has directed banks and financial institutions to provide special recovery loans at an interest rate of base rate + 0.5% premium only. This concession ensures that credit remains affordable for affected businesses during their revival phase.

These loans are specifically designed to help industries and enterprises resume operations, replace damaged assets, and secure jobs. Borrowers applying for such loans must submit their requests by the end of Poush 2082. Additionally, if financing pushes the debt-to-equity ratio above the standard 80:20, such loans will still be valid and exempted from stricter monitoring for one year, giving businesses flexibility to restart operations.

The policy also includes a provision for salary support loans, where employers can borrow funds at the same concessional rate to pay employees. On such loans, the Government of Nepal will provide a 2% interest subsidy for six months, further easing financial pressure on businesses.

By introducing this interest rate concession, NRB aims to ensure that affected borrowers have access to affordable credit, thereby restoring confidence in Nepal’s financial system and supporting economic revival.

Loan Restructuring for Gen Z Movement-Affected Businesses

The NRB has announced targeted loan restructuring and rescheduling measures for businesses and borrowers directly impacted by the Gen Z Movement and trade disruptions. Relief measures include restructuring by Poush 2082, concessional interest rates (base +0.5%), higher LTV for vehicles, subsidized salary loans, and export-linked incentives. These initiatives aim to revive businesses, protect jobs, and stabilize Nepal’s economy.