This should be stopped right away. Both IFC and ADB are out to swindle Nepali people who have saved their hard earned money. I wonder how could people in finance ministry and central bank of Nepal fail to understand things like these.
South Korea a few decades ago collected people's savings including from remittances, paying interest at a decent rate, and invested in infrastructure projects heavily. That is why Nepali youth are fighting to go there instead of working for their own motherland as Nepal has dismally failed to generate employment.
With best regards,
Ratna Sansar Shrestha, fca
Senior Water Resource Analyst
On Jul 2, 2014, at 5:13 AM, RATNA SANSAR SHRESTHA
What I have come to understand is that they would collect money from within Nepal by floating bond and then loan money for projects.
It should not be difficult to establish what modality is being followed by checking with Yuba Raj Khatiwada at NRB or Yuba Raj Bhusal at MoF.
Please Let me know what you are able to find out such that there is no confusion in the mind of likes of us.
With best regards
Ratna Sansar Shrestha
sent from iPad
On Jul 1, 2014, at 12:52, LeelaMani Paudyal
Thank you for information, in my mind they would provide loan in nepali currency to nepali enterprise without collecting money from nepali people. for example if i need one crore nepali rs, ifc would bring 105000 us$ or equivalent to one crore nepali and convert that to nepali currency and lend, the burrower will pay interest and installment in nepali and ifc would will recover in nepali and convert that to USD for repatriation. the risk associated with possible devaluation of nepali currency can be covered by heading or by insurance for foreign currency risk in international market. how is your opinion about my impression? is not it workable?
From: Ratna Sansar Shrestha
Sent: Tuesday, 1 July 2014 12:16 PM
Subject: Fwd: IFC permitted to issue Rs 50 billion in local currency bonds
I have learnt that IFC is proposing to “charge” a spread of 5.5% on local currency bond. Which means it will pay about 8-9% to people in Nepal who buy such bond and it will use same money to lend for projects in Nepal at 13.5-14.5%.
It basically mean that those who buy such bond will get 5.5% less than what the borrowers pay or the borrowers will pay 5.5% more than who buy the bond.
It is almost like the Hindi proverb: जिसकी जुती, उसकी सर
I wonder how can an multilateral like IFC justify such a thing. What is more distressing is the fact that ADB is also waiting in the wings to pull wool over eyes of the nepali people, who save their hard earned money, in similar fashion.
With best regards,
Ratna Sansar Shrestha,