Banks and financial institutions have been able to expand their lending to the agricultural sector by 23.4 percent in the 10 months of the current year 2013/14.
According to a latest report of the Nepal Rastra Bank (NRB), credits of BFIs to the agriculture sector have reached Rs 9.4 billion in the review period. During this period, the total lending of the BFIs has gone up by 11.9 percent, or Rs 136.66 billion.
Bankers say that the credit growth of the BFIs in the agriculture sector is mainly due to lack of other sectors for investment and measures introduced by the central regulatory body to lend certain percent of the loans to the productive sector.
Through the Monetary Policy for fiscal year 2013/14 NRB has made it mandatory for commercial banks to maintain at least 12 percent credit flow to the agriculture and energy sector, the mandatory provision of maintaining certain percent of total credit to the productive sector for development banks and finance companies would be enforced over next three years.
Vice president of Nepal Bankers Association (NBA) Upendra Poudyal said the banks are focusing on agro loans after NRB made it mandatory for them to extend 12 percent of their total loans to the agriculture and energy sector.
Among the five sub-sectors, ´Other Agriculture and Agricultural Services´ is the highest recipient of the credits from the BFIs in the review period. Loan to this sub-sector rose 35.4 percent, or Rs 5 billion, out of the total loan exposure in the agriculture sector. Likewise, lending to ´Farming service´, ´Tea´, ´Animals Farming/service´ and ´Forest, Fish Farming, and Slaughter´ also grew by Rs 200 million, 1.4 billion, 1.6 billion and Rs 1 billion respectively during the period.
Bharat Raj Dhakal, vice-president of Development Bankers Association Nepal (DBAN), told Republica that the rise in loans on the agricultural sector is the manifestation of the realization among BFIs and other stakeholders that the country´s economic development hinges on the agriculture development of the country.
“BFIs are increasingly becoming comfortable with the expansion of loan in the agriculture sector in comparison to loan exposure to other sectors like real estate,” said Dhakal, adding, “The measures introduced by the central regulatory bank to maintain certain percent of total loans to the productive sector has also helped the surge in agro lending.”
source: republica,29 june 2014
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According to a latest report of the Nepal Rastra Bank (NRB), credits of BFIs to the agriculture sector have reached Rs 9.4 billion in the review period. During this period, the total lending of the BFIs has gone up by 11.9 percent, or Rs 136.66 billion.
Bankers say that the credit growth of the BFIs in the agriculture sector is mainly due to lack of other sectors for investment and measures introduced by the central regulatory body to lend certain percent of the loans to the productive sector.
Through the Monetary Policy for fiscal year 2013/14 NRB has made it mandatory for commercial banks to maintain at least 12 percent credit flow to the agriculture and energy sector, the mandatory provision of maintaining certain percent of total credit to the productive sector for development banks and finance companies would be enforced over next three years.
Vice president of Nepal Bankers Association (NBA) Upendra Poudyal said the banks are focusing on agro loans after NRB made it mandatory for them to extend 12 percent of their total loans to the agriculture and energy sector.
Among the five sub-sectors, ´Other Agriculture and Agricultural Services´ is the highest recipient of the credits from the BFIs in the review period. Loan to this sub-sector rose 35.4 percent, or Rs 5 billion, out of the total loan exposure in the agriculture sector. Likewise, lending to ´Farming service´, ´Tea´, ´Animals Farming/service´ and ´Forest, Fish Farming, and Slaughter´ also grew by Rs 200 million, 1.4 billion, 1.6 billion and Rs 1 billion respectively during the period.
Bharat Raj Dhakal, vice-president of Development Bankers Association Nepal (DBAN), told Republica that the rise in loans on the agricultural sector is the manifestation of the realization among BFIs and other stakeholders that the country´s economic development hinges on the agriculture development of the country.
“BFIs are increasingly becoming comfortable with the expansion of loan in the agriculture sector in comparison to loan exposure to other sectors like real estate,” said Dhakal, adding, “The measures introduced by the central regulatory bank to maintain certain percent of total loans to the productive sector has also helped the surge in agro lending.”
source: republica,29 june 2014
LINK
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