KATHMANDU, Nov 16: Banks and financial institutions (BFIs) have issued Rs 144.95 billion loans against shares as of mid-October this year.
According to a report unveiled by the Nepal Rastra Bank (NRB) on Sunday, the BFIs provided additional loans worth Rs 4.25 billion in three months during mid-July and mid-October of the current fiscal year (FY). By the end of the last FY, the loan amount in this category stood at Rs 140.70 billion.
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In the review period this year, the margin loans increased by 3.02 percent. The growth rate in the range of Rs 5-10 million was 10.48 percent. The loan amount in this segment increased by Rs 1.68 billion to Rs 17.70 billion in total. Likewise, the growth in margin loan of up to Rs 2.5 million increased 3.09 percent to Rs 8.43 billion.
According to bankers, the demand for loans in production businesses has seen a slump in the aftermath of the Gen Z movement due to depletion in investors’ confidence. The interest rate has come down to minimal level as the BFIs have been flushed with overwhelming amounts of liquidity with them. However, the issuance of margin loans has marginally increased as investors have found the sector has an alternative to utilise their fund.
