Banks Lend More to Machinery and Electrical Equipment Sectors Amid Manufacturing Push

Nepal Rastra Bank’s August 2025 sectoral credit report shows a steady rise in bank lending to machinery and electrical equipment industries, signaling renewed momentum in Nepal’s manufacturing and industrial modernization drive. Total credit to the metal, machinery, and electrical tools sector climbed to Rs. 73.47 billion, marking a monthly increase of Rs. 397.6 million (0.5%). This growth highlights a gradual recovery in industrial investment after months of subdued borrowing caused by high interest rates and weak domestic demand.

Within the category, electrical equipment loans grew by Rs. 107 million, while medical and industrial machineryfinancing rose by Rs. 245 million and Rs. 107 million respectively. The surge in machinery loans reflects an uptick in capital spending by mid-sized manufacturers who are upgrading production technology, particularly in the construction materials, power equipment, and fabrication sectors. Meanwhile, loans for office and computing machinery also rose by 17.2%, suggesting a rising demand for automation and IT integration in industries.

According to banking analysts, this shift toward machinery and electrical investment aligns with Nepal’s broader import substitution policy and the government’s goal of promoting domestic production capacity. However, the pace remains modest, reflecting caution amid uncertain energy supply and slow project implementation. Nonetheless, consistent credit growth in these sub-sectors signals that Nepal’s manufacturing base is gradually strengthening, laying the groundwork for higher industrial productivity in the medium term.