The NEPSE Journal
Market commentary, data deep-dives, and trading notes from the NEPSE Trading desk.
Nepal’s bank credit structure in 2025/26 highlights a policy-driven shift — rising exposure to energy, transport, and construction sectors, while loans to agriculture and trade shrink amid weak demand and risk aversion.
Despite a restrictive policy environment, consumption loans in Nepal remain strong at Rs. 1.15 trillion, supported by continued demand for gold-backed, housing, and credit card loans, highlighting resilient household borrowing trends in 2025/26.
Bank credit to machinery and electrical sectors rose to Rs. 73.47 billion in August 2025, led by growth in electrical equipment and machinery financing, indicating a gradual revival in Nepal’s manufacturing and industrial modernization efforts.
Agricultural lending declined by Rs. 5.7 billion (–1.4%) in mid-August 2025, as climate risks, erratic monsoons, and high input costs dampened rural credit demand and discouraged bank exposure to the sector.
The NRB’s 2025 credit survey reveals increased funding in health and education sectors, with hospital loans up by Rs. 2.37 billion and continued investment in private schools and colleges — underscoring Nepal’s shift toward a service-driven growth model.
Electricity sector credit reached Rs. 438 billion in August 2025 — a record high — highlighting Nepal’s ongoing hydropower and infrastructure boom as banks prioritize lending toward energy projects driving future economic growth.
NRB’s August 2025 survey shows banks are diverting lending from fixed asset and real estate financing toward consumer and energy sectors, signaling a shift in Nepal’s credit structure driven by household demand and power project investments.
Construction sector loans in Nepal reached Rs. 232.8 billion in mid-August 2025, led by a strong rebound in highway and bridge projects, even as residential housing credit weakened.
Microfinance loans in Nepal have fallen by Rs. 20 billion (−10%), signaling liquidity strain, regulatory pressure, and reduced demand in rural areas. The sector faces growing stress that may challenge its traditional role in promoting financial inclusion.
Education and health loans are on the rise in FY 2025/26, reflecting stronger demand for investment in human capital and essential services, while consumer loans remain stable amid cautious household borrowing.