NRB Mid-Month Survey Reveals Shift from Fixed Assets to Consumer and Energy Loans

The Nepal Rastra Bank’s Mid-Month Survey (August 2025) indicates a notable shift in bank lending patterns — away from fixed asset and institutional credit toward consumer and energy-related loans. This change highlights evolving credit demand dynamics in Nepal’s economy, where households and energy projects are now absorbing a greater share of new lending compared to traditional industrial and asset-based sectors.

According to the NRB data, consumer loans now exceed Rs. 1.15 trillion, showing a steady expansion across categories such as personal home loans, hire-purchase financing, and credit cards. While overall consumer credit grew only marginally (0.1%) during the month, its sustained dominance underscores growing retail demand and middle-class consumption resilience. Energy sector loans — particularly in electricity generation and distribution — rose by Rs. 1.7 billion, reaching nearly Rs. 438 billion, reflecting continued investment in hydropower projects and private sector participation in renewable infrastructure.

In contrast, loans to fixed asset categories such as real estate, machinery, and manufacturing plants have slowed, with minimal growth or even declines across sub-sectors. For instance, real estate loans fell slightly by 0.2%, and machinery and equipment lending registered only modest growth (0.5%). This shows that banks are becoming more cautious toward long-term industrial lending amid sluggish project cashflows, regulatory oversight, and the lingering impact of high capital costs.

The shift also suggests that banks are rebalancing their loan portfolios toward safer, short- to medium-term retail and energy sectors, which offer quicker turnover and lower default risks. Economists interpret this as a structural adjustment in Nepal’s post-pandemic credit landscape — prioritizing consumption and energy sustainability over speculative real estate or industrial build-up.