CEO Tab
  • Home
  • Prime News
  • International Market
  • Special Report
  • Corporate
  • Opinion
  • Next Gen
  • Entertainment
No Result
View All Result
CEO Tab
  • Home
  • Prime News
  • International Market
  • Special Report
  • Corporate
  • Opinion
  • Next Gen
  • Entertainment
No Result
View All Result
CEO Tab
No Result
View All Result
Home Prime News

NRB Study Reveals Massive Misuse of Subsidized Loans in Agriculture and Primary Sectors

CEO Tab by CEO Tab
May 26, 2025
in Prime News
0
Country’s remittance inflows increased by 10.9%
77
SHARES
1.3k
VIEWS
Share on FacebookShare on Twitter

A recent study conducted by Nepal Rastra Bank (NRB) has exposed widespread misuse of subsidized loans, particularly in the primary sector, including agriculture-based businesses. The central bank’s field survey of 31,664 borrowers revealed that loans totaling Rs 21.25 billion are suspected to have been misappropriated.

You might also like

NEA Invites Proposals to Modernize Electricity Bill Collection System

New NEPSE Rule Raises Concerns Over Risks to Small Investors

Hetauda Cement Factory Halts Production Again Due to Raw Material Shortage

The study assessed the effectiveness of the subsidized loan program, which has reached 172,654 borrowers across Nepal. It found that Rs 1.74 billion was disbursed without properly identifying the target groups. Additionally, loans worth Rs 10.49 billion were issued in duplicate to borrowers already availing of similar benefits.

The NRB report highlights that many recipients used the subsidized loans not for new investments but to settle older debts. In several cases, previous borrowings were simply converted into subsidized loans without following the central bank’s operational guidelines. Such practices violate the purpose of the subsidized loan scheme, which was designed to support investment and productivity in vital sectors like agriculture and livestock.

The misuse was especially severe in loans issued for agricultural businesses. Among 10,901 borrowers in the farming sector who received a combined Rs 5.34 billion in loans, 25.6 percent misused the funds. One striking example cited in the report involves Global IME Bank issuing a Rs 2 million collateral-free loan to a poultry business, whose owner subsequently left for foreign employment without using the funds as intended.

This is not a new concern. The annual report of the Office of the Attorney General from last year also pointed to serious flaws in the system, including double subsidies, weak accountability, and a lack of effective monitoring. Citing such problems, the government recently decided to halt subsidies to the agricultural sector.

According to NRB data, as of fiscal year 2024/25, a total of Rs 86.89 billion in subsidized loans was disbursed to 46,356 borrowers involved in commercial agriculture and livestock activities. Of this amount, Rs 77.54 billion was channeled through commercial banks to 41,689 borrowers.

In addition to direct loan disbursements, the central bank has also mobilized Rs 658.3 million through the Deposit and Credit Guarantee Fund and Rs 133.6 million to the Nepal Insurance Authority under the same program.

In response to the findings, the government is now working to revise its policies. An official from the Ministry of Agriculture and Livestock Development stated that the loan threshold for subsidized agricultural loans may be reduced from Rs 50 million to Rs 10 million. Additionally, the interest rate cap may be lowered from six percent to four percent in a bid to improve oversight and reduce misuse.

The findings underscore the need for more robust monitoring and enforcement mechanisms to ensure that subsidized loans serve their intended purpose of supporting Nepal’s primary sectors.

Share31Tweet19
CEO Tab

CEO Tab

Recommended For You

NEA Invites Proposals to Modernize Electricity Bill Collection System

by CEO Tab
April 19, 2026
0
NEA invites hydropower promoters for PPA

The Nepal Electricity Authority (NEA) has called for proposals from qualified service providers to enhance the efficiency and user-friendliness of its electricity bill collection system. The authority is...

Read more

New NEPSE Rule Raises Concerns Over Risks to Small Investors

by CEO Tab
April 19, 2026
0
10 firms keen to receive stockbrokers licenses

Stakeholders have raised concerns that the revised provision allowing wider fluctuations in share prices in the secondary market could expose small investors to greater financial risks. The Nepal...

Read more

Hetauda Cement Factory Halts Production Again Due to Raw Material Shortage

by CEO Tab
April 19, 2026
0
Closed Hetauda cement industry resumes operation

Hetauda Cement Factory has suspended operations less than a month after resuming production, citing a shortage of essential raw materials. After remaining closed for around seven months, the...

Read more

Nepal’s Trade Costs 44% Higher Than SAFTA Average: Govt Report

by CEO Tab
April 16, 2026
0
“Issues of price increment of petroleum goods will be resolved”

Nepal’s trading cost is 44 percent higher than those of member countries of the South Asian Free Trade Area (SAFTA), according to a new government report highlighting deep-rooted...

Read more

APF Tightens Border Monitoring to Curb Revenue Leakage

by CEO Tab
April 16, 2026
0
Exports of Nepali goods double in four months

The Armed Police Force (APF) Nepal has intensified monitoring at eastern border customs points, including Kakarbhitta, in a bid to control revenue leakage. The move follows growing concerns...

Read more
Next Post
NIA curbs on investment of reinsurance companies

NIA Launches Monthly Report to Enhance Sector Transparency

Browse by Category

  • Corporate
  • Entertainment
  • Featured
  • International
  • Major Story
  • Next Gen
  • Opinion
  • Prime News
  • Special Report
  • Tete – A – Tete

EDITOR

Manish Raj Poudel
info@ceotab.com
9841317747


PUBLISHED BY

Welcome Group
www.welcomeadnepal.com

Publisher

www.ceotab.com is a premium news portal being run by Welcome Group. The website features quality business/economic news contents,  in-depth profiles of companies, stories of struggle and success of entrepreneurs, articles that assess various dimensions of  the commerce, trade and economy.

Editor

Manish Raj Poudel

info@ceotab.com

9841317747

Sub-Editor

Riza Poudel

poudelriza@gmail.com

Archives

© 2023 CEO Tab. All rights reserved.

No Result
View All Result
  • Home
  • Prime News
  • International Market
  • Special Report
  • Corporate
  • Opinion
  • Next Gen
  • Entertainment

© 2023 CEO Tab. All rights reserved.