Private Sector Loans Surge 7.7% to Rs. 5.6 Trillion Amid Expanding Credit Demand

Nepal’s private sector credit has witnessed a strong rebound, climbing 7.7 percent year-on-year to reach Rs. 5.63 trillionin mid-August 2025, according to the latest Other Depository Corporation Survey published by the Nepal Rastra Bank (NRB). The data highlights a steady revival in borrowing activity as businesses and households respond to improving liquidity and stable interest rates.

Within the total loan portfolio, loans to non-financial private corporations rose by 6.7 percent, reaching Rs. 3.44 trillion, while household loans climbed by 10.2 percent to Rs. 2.05 trillion. This indicates that both the industrial and consumer sectors are driving credit expansion — with increasing financing for trade, construction, real estate, and consumer goods purchases.

Economists note that this growth in private sector credit reflects renewed business confidence, aided by gradual policy easing and stronger deposit inflows. However, the credit growth remains moderate compared to the double-digit surge seen during pre-pandemic years, signaling a cautious lending environment among banks and financial institutions.

Meanwhile, accrued interest on loans stood at Rs. 134.9 billion, slightly lower than the previous year, indicating improved repayment capacity and better loan performance across the banking sector.

Experts suggest that while the private sector’s credit momentum is a positive sign for Nepal’s economic recovery, sustaining this pace will depend on domestic demand, government capital spending, and external economic stability in the months ahead.