Kathmandu. Loans to the private sector from banks and financial institutions have improved by about 3 percent. Loans from banks and financial institutions to the private sector increased by 11.4 percent in the first six months of the current fiscal year. Such loans had increased by 8.6 percent in the corresponding period of the previous year.

On a year-on-year basis, credit to private sector from banks and financial institutions increased by 14.9 percent in mid-January 2012/13. Of the credit to private sector, credit to commercial banks increased by 11.3 percent, development banks by 15.3 percent and finance companies by 0.3 percent during the review period.

During the review period, 66.3 percent of the outstanding loans of banks and financial institutions were secured by real estate and 12.2 percent by current assets (agricultural and non-agricultural goods). In mid-January 2012, the ratio of such collateral loans was 64.9 percent and 13.5 percent respectively.

Of the total investment by banks and financial institutions in the first six months of the current fiscal year, credit to agriculture sector increased by 20.2 percent, credit to industrial manufacturing sector increased by 6.9 percent, credit to construction sector increased by 6.3 percent, credit to transport, communication and public services sector increased by 6.9 percent. Loans to the retail sector increased by 9.5 percent and credit to the services sector increased by 11.9 percent. 

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