The NEPSE Journal
Market commentary, data deep-dives, and trading notes from the NEPSE Trading desk.
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.
Nepal’s tourism credit expanded by 12.6% in August 2025, signaling renewed optimism in adventure and travel services, even as hotel loans fell 3.9% amid high costs and cautious investment. The service sector continues to grow unevenly, with tourism emerging as a key driver of post-pandemic recovery.
Wholesale and retail credit in Nepal declined by Rs. 4.8 billion (−0.5%) in August 2025, with the drop led by durable goods and small retail businesses. Despite a small uptick in automotive trade loans, overall trade credit remained weak, indicating a broader slowdown in consumer demand and import activity.
Agriculture credit in Nepal declined by 1.4% (Rs. 5.7 billion) in August 2025, mainly due to reduced financing for forest, fish farming, and allied activities. This shift underscores banks’ growing preference for industrial, construction, and service-sector lending over rural agriculture.
The latest NRB data shows that credit to transport and energy sectors grew steadily, with electricity loans up by Rs. 1.7 billion and transport loans rising modestly. This indicates that infrastructure-led financing remains a crucial pillar of Nepal’s banking system, fueling both power generation and logistics growth.
NRB data shows that manufacturing credit rose 0.8% year-on-year, led by growth in cement, iron, and steel industries. The uptick indicates a slow but steady recovery in Nepal’s industrial and infrastructure sectors, supported by stable liquidity and gradual improvement in domestic demand.
NRB data shows real estate loans stable at Rs. 191 billion, while microfinance credit plunged 10% to Rs. 184 billion. This shift highlights banks’ cautious lending behavior and a move toward lower-risk, asset-backed sectors amid regulatory and market pressures.
Nepal’s service sector credit crossed Rs. 480 billion, led by strong loan expansion in tourism and healthcare, despite moderate declines in hotels and education. The trend highlights Nepal’s growing reliance on tertiary industries as key economic contributors.
NRB’s data signals a gradual structural transformation in Nepal’s credit ecosystem — from traditional agriculture-led lending toward industrial, infrastructure, and service-oriented financing. While this marks a positive shift toward productive investment, it also underscores the need to strengthen rural credit access to ensure inclusive economic growth.