1 day Ago
bY CHITRA MIJAR,Sindhupalchowk, may.1: The Majhi settlement in Bhimtar of Chautara Sangachokgadhi Municipality-14 is at high risk of being auctioned off. The risk stems from the community’s inability to repay loans taken out for post-earthquake reconstruction.
After the devastating earthquake of April 25, 2015, the reconstruction of the destroyed Majhi village was undertaken by the Shweta Shree Foundation. The construction of the Integrated Model Majhi Settlement began on May 28, 2017. Each household received a government reconstruction grant of Rs.
300,000 and took an additional loan of Rs. 400,000 from the then Laxmi Sunrise Bank (now Laxmi Bank), Chautara branch. However, due to their inability to repay the loan and interest, the settlement is now facing auction proceedings by the bank.
Under the leadership of Shweta Khadka, chairman of the Shweta Shree Foundation, 53 houses were reconstructed as part of the integrated settlement. However, the foundation abandoned the project midway, forcing the Majhi community to complete the reconstruction on their own. According to 60-year-old Gyan Bahadur Majhi, the community took loans upon the foundation’s recommendation to complete the construction.
Each household borrowed over Rs. 400,000, with the foundation acting as guarantor. The bank provided the loans under the condition that the foundation would be responsible for repayment if the community failed to do so.
Now, due to defaults on both principal and interest, the settlement is on the verge of being blacklisted and auctioned. Despite repeated written and verbal notices from the bank, the foundation has failed to repay the debt, leading the bank to move forward with the auction process. All the houses in the Majhi settlement are now at risk of being auctioned.
Urmila Majhi, a Member of Parliament from the CPN (Maoist Centre), raised the issue in the House of Representatives on Sunday. She pointed out high degree of negligence from the foundation resulted in this situation. She said that the Majhi community now faces displacement under the guise of public service.
Khadka claimed that the loan agreement made it clear the community would be responsible for repaying both the principal and interest. The loans were issued as subsidised loans at 2 per cent interest rate and secured by mortgaging land and disbursed in amounts of Rs. 400,000 per household.
However, with neither the borrowers, the guarantor, nor the recommending party fulfilling repayment responsibilities, the bank issued a 35-day auction notice on September 21, 2023. See Page 6 In response, the Majhi community filed a writ petition at the Patan High Court, seeking an interim order to halt the auction and citing their inability to repay the loan. On November 10, 2023, the court issued a temporary injunction, preventing the implementation of the auction notice.
Despite this, due to long-standing unpaid dues, the bank has resumed the auction process. The estimated construction cost per house was Rs. 825,000.
After some donors committed to providing doors and roofing materials, the cost was revised to Rs. 700,000. While the foundation had agreed to provide land levelling, technical support, documentation and tools, Khadka claims loan arrangements were not part of their agreement.
On May 29, 2017, Khadka and then-chief of the National Reconstruction Authority, Dr. Govinda Pokharel, jointly laid the foundation stone for the settlement. A formal loan agreement between the bank and the foundation was signed on July 10, 2018.
Clause 5 of the agreement states that the foundation would be liable to repay any outstanding loans in case of default by the borrowers. Based on this, Laxmi Bank disbursed loans amounting to Rs. 27.
3 million. The construction work began after the foundation committed to providing aid for the infrastructure construction amounting to Rs. 20.
9 million by taking a loan totalling Rs. 37.7 million alongside the Rs.
300,000 government housing grant per household. Additionally, the Ministry of Physical Infrastructure provided Rs. 12.
1 million, Machhapuchchhre Bank contributed Rs. 700,000 and several other organisations supported the foundation. However, the Majhi community claims that there has been a lack of transparency regarding the use of these funds.
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