Money can be earned by the interest rate on loans to be charged to the farmers. Once accepted by the Central Bank of Nepal, banks are allowed to enter the market. Based on the installation reports submitted by the private constructors, the National Centre will transfer the subsidy amount minus the guarantee charge to the banks, see Figure 1. The guarantee charge will be deducted by the banks from the payment of the plant to the constructors. The banks will formulate their own commercial policies on the provision of loan like the need of a collateral, loan process, interest rate, mode of repayment, etc.
Banks can also provide loan to plant constructors and appliance manufacturers.
These loans can be provided on a commercial basis as well. The functions of this Centre should be limited to these which can not be taken up by the private sector. The planning of the above mentioned activities should be done by the Centre itself, but their implementation should be done as much as possible by other organizations like GOs, NGOs, INGOs, consulting enterprizes, and private companies on the basis of financial incentives following the principle of 'Implementation by Participation and Coordination'. The NBC should be staffed with a small but qualified team. The cost of activities with a non-commercial character should be borne by the NBC on the basis of a fee per output.