Agriculture loan rises by 20%

By TRN Online, Kathmandu, July 15: The agriculture loan has increased by 20 per cent in the review period however quantum of rate hike remained below the previous fiscal year (FY).

The Current Macroeconomic and Financial Situation of 11 months released by Nepal Rastra Bank (NRB) showed a hike in the rate of loan outflow that remained below the previous hike of 40.2 per cent in the same period of the previous FY.

The total outstanding credit outflow in the agriculture sector now touched Rs 389.4 billion up from Rs 324.2 billion recorded in mid-July 2021.

Meanwhile, the import loan sharply plummeted in the fiscal year 2021/22. The Current Macroeconomic and Financial Situation of 11 months published by Nepal Rastra Bank (NRB) showed that the outstanding import loan shrunk 53.8 per cent from Rs 205.6 billion to Rs 95.07 billion.

In an unprecedented move, Nepal Rastra Bank (NRB) banned the import of several luxurious goods in April in the backdrop of rapid depletion of the foreign exchange reserve and leakage of liquidity from the financial system.

Irrespective of the NRB measures, the challenges created by the bourgeoning imports and shortening liquidity have remained relentless over the current FY. The imports went up by 27.5 per cent and average excess liquidity was maintained at around Rs 15 billion in mid-June.

Amid the austere liquidity in financial system, the outstanding credits mobilized by the banks and financial institutions positively trended up in ; Agriculture( 20.1 %); Production (9.6 %); Metal, machinery, electric (23.6 %); Transportation fittings (8 %); Wholesale & retail (14.6%) ; Finance, insurance (11.4%); Service industries (5%); Consumable goods (482.9 %).

While, the outstanding credit shrunk in mines (-1.1) ; construction (-49.6 %) and local government (-26 %).

In the review period, the outstanding credit marginally edged up by 13.2 per cent which left far behind the 25.4 per cent upswing in the same period of the previous FY.

The outstanding credit edged up by Rs 552.1 billion in the FY 2021/22. The rise has summed up the total outstanding credit to Rs 4724.9 billion by the end of mid-June 2022 from Rs 4172.7 billion recorded in mid-July 2021.