#NRBReport2025 #WholesaleCredi
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By Sandeep Chaudhary

Wholesale and Retail Credit Sees Rs. 4.8 Billion Decline Amid Sluggish Trade Demand

Wholesale and Retail Credit Sees Rs. 4.8 Billion Decline Amid Sluggish Trade Demand

According to the Nepal Rastra Bank’s Sectorwise Credit Report for Mid-August 2025, the wholesale and retail trade sector experienced a decline of Rs. 4.8 billion (−0.5%) in outstanding bank credit compared to the previous month. The total credit to the sector fell to Rs. 1.028 trillion from Rs. 1.033 trillion in mid-July 2025. The contraction indicates weakening trade activities and subdued consumer demand across both durable and non-durable goods segments.

The detailed breakdown shows that wholesale credit for durable goods such as vehicles, electronics, and machinery declined by Rs. 1.48 billion (−0.8%), reflecting slower imports and restrained business sentiment. Similarly, non-durable wholesale credit, including daily essentials, food items, and fast-moving consumer goods (FMCG), remained nearly stagnant with a slight rise of just 0.1%, suggesting sluggish restocking among retailers.

Interestingly, automotive dealers and franchise-based businesses saw modest growth of 3.9%, reaching Rs. 105.8 billion — driven by new vehicle models and festival season demand. However, other retail businesses, which form the largest portion of the category, dropped by Rs. 7.8 billion (−1.7%), signaling lower consumer spending and cautious inventory management among small traders.

The import and export trade segments remained mixed: import-related credit rose marginally by 0.2%, while export-related loans dropped by 1.5%, reflecting Nepal’s ongoing trade imbalance and limited export competitiveness. Analysts suggest that the slowdown in trade-related credit is partly due to tighter liquidity conditions, higher interest rates, and weak domestic purchasing power — factors that collectively dampened trading activity during the review period.

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