Loan Disbursement by Banks and Financial Institutions Increases by 7.3%

In the first 10 months of the current fiscal year, banks and financial institutions have disbursed loans amounting to NPR 368.68 billion, showing a 7.3% increase. According to Nepal Rastra Bank, the loan flow in the banking and financial sector as of the end of Baishakh has shown this growth.

In the same period last year, banks and financial institutions had disbursed only NPR 225.24 billion. In the current fiscal year, the increase in loan flow is relatively modest. Nepal Rastra Bank has projected a 12.5% increase in loan flow for the current year, with a 7.3% increase seen up to Baishakh.

On an annual point-to-point basis, by the end of Baishakh 2082, loans disbursed to the private sector by banks and financial institutions increased by 8.4%. Of this, the share of loans directed towards the non-financial institutional sector was 63.1%, and the share for individuals and households was 36.9%. In the same period last year, these shares were 63.7% and 36.3%, respectively.

During the review period, loan disbursement to the private sector by commercial banks increased by 7.6%, development banks by 4.1%, and finance companies by 6.5%.

Regarding the composition of loans in the investment portfolio of banks and financial institutions, loans secured by current assets (agriculture and non-agricultural goods) accounted for 14.6%, while loans secured by real estate (property) comprised 65.1%. In the same period last year, these ratios were 12.1% and 68.5%, respectively.

In the first 10 months of the fiscal year 2081/82, loans disbursed to various sectors showed the following increases: loans to the industrial production sector by 9.0%, the construction sector by 12.3%, the wholesale and retail trade sector by 4.9%, the transportation, communication, and public service sector by 11.9%, the service industry sector by 7.9%, and loans to the consumption sector by 8.8%.

Additionally, periodic loans increased by 5.1%, margin-type loans by 39.3%, trust receipts (import) loans by 58.1%, hire purchase loans by 4.1%, cash flow loans by 3.4%, and real estate loans (including personal housing loans) by 5.2%. However, non-performing loans (NPLs) decreased by 12.9%.