Lending of banks and financial institutions (BFIs) went up by 57.46 per cent in the first half of the current fiscal year, with more than a fourth of the total credit going towards the production sect. BFIs extended Rs 131.54 billion in credit in the six-month period between mid-July to mid-January, as against Rs 83.54 billion in the same period last fiscal, shows the latest report of Nepal Rastra Bank (NRB).
Bucking the past trend, production sector absorbed biggest chunk of loan in the first half of the fiscal year. This indicates more credit is flowing towards productive sector. Earlier, the biggest chunk of loan used to go towards the wholesale and retail sector. Most of these funds were then used to finance imports, mostly consumer goods.The production sector absorbed credit of Rs 34.11 billion, or 25.94 per cent of the total loans in the six-month period, as against Rs 22.34 billion in the same period last fiscal.
A huge portion of credit extended to the production sector — Rs 12.05 billion — went towards iron and steel plants. Food packaging and processing firms, on the other hand, walked away with Rs 4.52 billion in loans, while miscellaneous production units absorbed credit of Rs 4.45 billion.Wholesale and retail sector, nonetheless, received Rs 32.74 billion in loans in the six-month period. A big chunk of this money, or Rs 12.89 billion, went towards miscellaneous retail business, followed by wholesale business of durable commodities, which absorbed Rs 8.19 billion in loans.Surprisingly, lending to export businesses declined by Rs 75.11 million, meaning repayment of loans surpassed issuance of new loans.Another big absorber of credit in the six-month period
was the construction sector. It received Rs 16.46 billion in loans from banks and financial institutions in the first six months of the current fiscal year, as against Rs 9.62 billion in the same period last fiscal.Over 90 per cent of the loans extended to the construction sector, or Rs 14.87 billion, was absorbed by residential construction business.
Among others, lending to service industries stood at Rs 8.55 billion in the six-month period of this fiscal, as against Rs 7.79 billion in the same period last fiscal; credit to the agricultural sector hovered around Rs 6.40 billion in the review period, as against Rs 4.10 billion in the same period last fiscal, while loans to the financial sector stood at Rs 3.73 billion in the six-month period.
However, credit to the transportation equipment sector fell by Rs 1.52 billion and loans to the mining sector also declined by Rs 43.81 million in the first six months of this fiscal.
source: the himalayan times,19 feb 2015
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Bucking the past trend, production sector absorbed biggest chunk of loan in the first half of the fiscal year. This indicates more credit is flowing towards productive sector. Earlier, the biggest chunk of loan used to go towards the wholesale and retail sector. Most of these funds were then used to finance imports, mostly consumer goods.The production sector absorbed credit of Rs 34.11 billion, or 25.94 per cent of the total loans in the six-month period, as against Rs 22.34 billion in the same period last fiscal.
A huge portion of credit extended to the production sector — Rs 12.05 billion — went towards iron and steel plants. Food packaging and processing firms, on the other hand, walked away with Rs 4.52 billion in loans, while miscellaneous production units absorbed credit of Rs 4.45 billion.Wholesale and retail sector, nonetheless, received Rs 32.74 billion in loans in the six-month period. A big chunk of this money, or Rs 12.89 billion, went towards miscellaneous retail business, followed by wholesale business of durable commodities, which absorbed Rs 8.19 billion in loans.Surprisingly, lending to export businesses declined by Rs 75.11 million, meaning repayment of loans surpassed issuance of new loans.Another big absorber of credit in the six-month period
was the construction sector. It received Rs 16.46 billion in loans from banks and financial institutions in the first six months of the current fiscal year, as against Rs 9.62 billion in the same period last fiscal.Over 90 per cent of the loans extended to the construction sector, or Rs 14.87 billion, was absorbed by residential construction business.
Among others, lending to service industries stood at Rs 8.55 billion in the six-month period of this fiscal, as against Rs 7.79 billion in the same period last fiscal; credit to the agricultural sector hovered around Rs 6.40 billion in the review period, as against Rs 4.10 billion in the same period last fiscal, while loans to the financial sector stood at Rs 3.73 billion in the six-month period.
However, credit to the transportation equipment sector fell by Rs 1.52 billion and loans to the mining sector also declined by Rs 43.81 million in the first six months of this fiscal.
source: the himalayan times,19 feb 2015
LINK
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