Private sector credit increases by 5.8 per cent

By TRN Online, Kathmandu, Aug 18: Private sector credit from the Bank and Financial Institutions (BFIs) increased Rs 276.94 billion (5.8 percent) in the review year compared to an increase of Rs 175.94 billion (3.8 per cent) in the previous year. 

According to Macroeonomic and financial data of the fiscal year 2023/24 published by Nepal Rastra Bank (NRB) published today, the share of private sector credit from BFIs to non-financial corporation and household stand at 63.3 per cent and 36.7 per cent respectively in mid-July 2024. Such shares were 62.7 per cent and 37.3 per cent a year ago.

In the review year, private sector credit from commercial banks, development banks and financial companies increased 5.8 per cent 5.0 per cent and 7.7 per cent respectively. 

In the review year, out of the total outstanding credit of the BFIs, 66.5 per cent is against the collateral of land and buildings and 13.2 per cent against the collateral of current assets (such as agricultural and non-agricultural products). Such ratios 68 per cent and 11.6 per cent respectively a year ago.

Outstanding loan of BFIs to the agriculure sector increased 0.9 per cent, industrial production sector 8.8 per cent, transportation, communication and public sector 16.7 per cent, wholesale and retail sector 1.5 per cent and service industry sector 6.2 per cent in the review year.

In the review year, term loan extended by BFIs increased 22.2 per cent, real estate loan (including residential personal home loan) 9.6 per cent, margin nature loan 18.1 per cent and trust reciept (import) loan 12.6 percent while that of hire purchase loan decreased 22 per cent overdraft 46.3 per cent demand and working capital loan 17.6 per cent.