Banks and financial institutions (BFIs) in Nepal have issued loans worth Rs 144.95 billion against shares as of mid-October this year.
According to a report released by the Nepal Rastra Bank (NRB) on Sunday, BFIs issued an additional Rs 4.25 billion in such loans between mid-July and mid-October of the current fiscal year. By the end of the previous fiscal year, the total volume of loans in this category was Rs 140.70 billion.
During the review period, margin lending increased by 3.02 percent. Loans in the range of Rs 5 million to Rs 10 million grew significantly by 10.48 percent, reaching a total of Rs 17.70 billion, an increase of Rs 1.68 billion. Likewise, margin loans of up to Rs 2.5 million rose by 3.09 percent, amounting to Rs 8.43 billion.
Bankers stated that loan demand in the productive sector has slowed down in the aftermath of the Gen Z movement, as investor confidence has weakened. Although interest rates have fallen to their lowest levels and BFIs are holding excessive liquidity, the issuance of margin loans has seen a slight increase as investors consider it an alternative sector for utilising their funds.
