Banks providing education loans against certificates

Commercial banks have started providing education loans against academic certificates in limited numbers to engineering students by signing agreements with the concerned engineering colleges. Banks do not have a policy to issue such loans to all students. Prabhu Bank has announced that it will lend up to Rs300,000 to students of Kathmandu Engineering College (KEC) studying in the Bachelor of Engineering (BE) programme. As per the accord signed with the college, students wishing to take loans against their certificates should submit the actual certificates from the School Leaving Certificate to higher levels. Students can get back their certificates after clearing their loans which can be repaid in instalments within four years. “The scheme was launched to help students having financial problems to pursue higher education,” the bank said in a press release. Prabhu Bank’s Chief Executive Officer Ashok Sherchan and KEC’s Managing Director Rajendra Shakya signed the loan agreement on Monday. Although the government had announced through the budget statement of the current fiscal year that arrangements would be made to provide student loans, the scheme was not included in the monetary policy by Nepal Rastra Bank (NRB). However, the central bank said that banks were free to launch such plans. About two weeks ago, NMB Bank and Himalaya College of Engineering, Lalitpur had signed a similar agreement to provide education loans to students of Bachelor of Engineering against their academic certificates as collateral. As per the agreement, genuine but economically weak students of Himalaya College are entitled to receive credit. NMB Bank’s loan scheme is not available to all students. Students can receive 40-80 percent of their college costs under the scheme, according to the bank. The money will be released in instalments based on the student’s excellence, labour and credibility, the bank said. The loan will mature in four years and interest will be charged at a rate of 5-8 percent per annum. The student can extend the payback period by making a separate agreement with the bank. Source: ekantipur