Over NPR 24 Billion Increase in Personal Housing Loans

A significant rise in personal housing construction has driven notable growth in housing-related loans. By the end of Jestha in the fiscal year 2081/82, banks and financial institutions had disbursed more than NPR 24.63 billion in additional loans for personal housing construction compared to the previous fiscal year.

According to Nepal Rastra Bank, 54 commercial banks, development banks, and finance companies have provided a total of NPR 410.04 billion in loans for personal housing. This marks an increase of about NPR 24 billion over the same period last year.

Banking officials attribute the surge in demand for housing loans to lower interest rates, high remittance inflows, and the reactivation of the real estate sector, which has led to the rapid expansion of housing projects. Commercial banks alone disbursed over NPR 326.72 billion in personal housing loans by the end of Jestha, while development banks and finance companies disbursed NPR 68.67 billion and NPR 14.64 billion, respectively.

Experts say personal housing loans contribute to job creation in the real estate and construction sectors and have a positive impact on the overall economy. The current monetary policy has also encouraged loan flow into the housing and land sectors.

Banks and financial institutions are currently offering various schemes, offers, and plans to attract customers for housing loans. Despite stable land prices, loan disbursement continues to rise.

Meanwhile, in the first 11 months of the previous fiscal year, the total credit flow from the banking sector reached NPR 5.554 trillion, which is around NPR 426 billion higher than the year before. Commercial banks hold the largest share of total credit, followed by development banks and finance companies.

Bankers note that although there is some flexibility in monetary policy, the growing assets of the non-banking sector and pressure on capital funds pose challenges to sustaining a high level of credit growth in the long term.