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The World Bank has increased the interest rate on loans provided to Nepal by 0.75 percentage points, citing the country's rising per capita income.
At an orientation program on foreign aid mobilization organized by the Ministry of Finance and the Nepal Association of Financial Journalists (NAFIJ) in Kathmandu today, Dhaniram Sharma, Chief of the International Economic Aid Coordination Division, confirmed that the new interest rate came into effect from July.
With the adjustment, the interest rate on World Bank loans to Nepal has been lowered to 1.5 percent. Sharma explained that the concessional loan, previously repayable over 40 years, will now have a shorter maturity period of 30 years. Some loans with a 38-year term have also been adjusted accordingly.
Sharma emphasized that Nepal’s development cooperation will be aligned with strategic frameworks laid out by major development partners, including the World Bank and the Asian Development Bank. He noted that these partners independently assess project quality and outcomes, so project selection is not solely determined by Nepal’s internal demand.
During the event, Dolendra Sharma, Under Secretary at the Ministry of Finance, presented a paper detailing Nepal’s current practices in foreign aid mobilization.
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