Loan growth slows down in four months, credit growth by 0.9 percentage points

लगानी न्यूज

१ पुष २०८२, मंगलवार १५:३६December 16, 2025

. KATHMANDU: The flow of loans from banks and financial institutions (BFIs) has slowed down as the country’s economic activities have not returned at the expected pace. Credit investment has decreased due to weak demand for loans in industry, trade, construction and other investment sectors.

According to the latest data released by Nepal Rastra Bank, loan investment increased by only 0.9 percentage points from mid-July to mid-November of the current fiscal year.TAG_OPEN_div_40 The loan investment made by the banks and financial sector is very low compared to the same period of the last fiscal year.

According to the Nepal Rastra Bank, banks and financial institutions (BFIs) have extended loans of Rs 51.56 billion to various sectors in the last four months.TAG_OPEN_div_38 So far, the total loan investment has reached Rs 5.643 trillion. However, credit investment increased by 2.3 percentage points in the first four months of the previous fiscal year.

{{TAG_OPEN_div_36} Credit expansion has slowed down in recent times due to weak investment environment, low morale of the private sector, decrease in consumption and government spending not increasing as expected. Although the interest rate on bank loans has come down in the last few years, businessmen and investors are still reluctant to make new investments. This has a direct impact on the demand for loans.

Cash credit loans declined by 1.8 percent in the first four months of the current financial year.TAG_OPEN_div_34 According to the data of the Rastra Bank, loans towards cash credit decreased by Rs 11.42 billion during the period.

Similarly, overdraft loans have also declined. In the four-month period, overdraft loans decreased by 4.9 percent to Rs 5.50 billion. The decline in short-term loans by businesses indicates that cash flow in the market is weak and business expansion is low.

Import-related credit has also contracted. Trust receipts and import loans fell 2.1 percent in the first four months. Import credit decreased by Rs 2.64 billion in the review period. Import credit has also been affected due to the government’s policy of controlling import, decrease in consumption and trade deficit in recent period.

By the end of November of the current fiscal year, there has been limited improvement in some titles. In the first four months of the current fiscal year, Rs 17.68 billion has been extended under term loans. This loan increased by 0.9 percent.

Demand and other working capital loans have also seen a modest increase.TAG_OPEN_div_26 According to the NRB, the loan under this heading has increased by 1.1 percent to Rs 9.19 billion. However, there has been a comparatively good growth in the housing loan. Residential personal home loans above Rs 20 million increased by 5.9 percent in the first four months. During the period, Rs 24.59 billion was added to the sector.

Real estate loans declined by 0.4 percent in the first four months of the current fiscal year.TAG_OPEN_div_24 During this period, the sector has lost Rs 1.01 billion. However, margin type loans related to the capital market have improved. Such loans increased by 3.9 percent to Rs 5.52 billion in the first four months.

Similarly, there has been a general increase in hire purchase loans.TAG_OPEN_div_22 Credit to the sector increased by 1.3 percent to Rs 1.64 billion in the first four months. Meanwhile, there has been a significant decline in the loans going to the priority sector. In the first four months of the current fiscal year, credit to this sector has decreased by 7.4 percent. According to the data of the Rastra Bank, loans decreased by Rs 21.83 billion during the period.