NRB reports show bank lending skewed to services and a few hubs in three provinces
Nepal Rastra Bank reports for fiscal year 2082/83 show most bank credit in Sudurpashchim and Karnali going to services and a few districts, while lending in Madhesh slipped even as deposits grew.
Annual reports from the Nepal Rastra Bank (NRB) on the economies of Madhesh, Sudurpashchim and Karnali provinces for fiscal year 2082/83 show bank deposits rising while lending stays concentrated in services and in a handful of districts, with comparatively little reaching farming and industry.
Madhesh: deposits up, lending flat
Banks and financial institutions extended Rs 8.99 billion in concessional loans across Madhesh's eight districts last fiscal year, according to an NRB study reported by Onlinekhabar and Khabarhub. Dhanusha received the largest share, Rs 1.02 billion (16.54%), and Saptari the smallest, Rs 300 million (4.87%). Agriculture, forestry and fisheries are estimated to contribute 34.97% of the province's GDP. By the end of Ashar 2083, deposits in the province had grown 17.32% to Rs 478.37 billion, while total lending fell 0.18% to Rs 494.95 billion, Khabarhub reported.
Sudurpashchim: services take most credit
In Sudurpashchim, 73.48% of all bank lending went to the service sector, according to the report of the NRB's Dhangadhi office, cited by Onlinekhabar and Clickmandu. Agriculture contributes 33.65% of the province's GDP but received 9.56% of credit, and lending to farming fell 2.13% last fiscal year to Rs 15.62 billion, Clickmandu reported. Two Tarai districts, Kailali and Kanchanpur, account for 88.29% of the province's total lending, leaving its seven hill and mountain districts with little.
Karnali: slower growth, credit centred on Surkhet
Karnali's economy is projected to grow 2.94% in 2082/83, below the national rate, according to the report of the NRB's Surkhet office as cited by Nagarik News and Clickmandu. Industry contributes 10.07% of the provincial economy, according to Clickmandu, and about 75% of the province's roads are unpaved, Nagarik News reported. Deposits rose 22.03% to Rs 111.15 billion, but lending grew only 9.79% to Rs 66.85 billion; 85.21% of that lending went to services, and more than half of the province's credit is concentrated in Surkhet, according to Clickmandu.
A common pattern
In all three provinces the reports show deposits growing faster than lending. In Sudurpashchim and Karnali, most credit goes to services and personal consumption rather than to agriculture, which makes up about a third of both provinces' economies.