Friday 22nd November 2019

Bank Loans to Services Sector On Rise in Nepal, Tourism and Hotel Atop!

By sub-sectors, Tourism and Hotel industries received major lending
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Bank Loans to Services Sector On Rise in Nepal, Tourism and Hotel Atop!

Nepal service sector received the major chunk of investment from local banks in FY 2018-19.

As the latest reports show, Nepali banks’ lending to the domestic services sector went up 18 percent over the first eight months of the fiscal.

This rise has instilled some positive sentiment among investors looking for investment in tertiary sector in the economy.

According to Nepal Rastra Bank (NRB) reports, the total lending to services sector was found to be NPR 232.51 billion during the first eight months period, showing a rise from NPR 35 billion.

Banking and finance companies’ total outstanding loans to service sector firms during the fiscal was NPR 195 billion, showing a 14 percent year-on-year rise.

Nepal Rastra Bank

Growth in investment to the service sector was majorly attributed to the tourism industry that showed 10.8 percent growth in FY 2018-19.

“You can see a lot of hotels are being constructed, while tourism sector is also buoyant as tourist arrivals are increasing at a record high pace. This will definitely increase the demand for loans from these businesses,” says a bank official.

Hotel industry was another major recipient as a sub-sector under service sector!

Total lending to hotels has reportedly increased by 21.9 percent or NPR 14.81 billion during the review period, and the total outstanding loans to hotel sub-sector was totaled at NPR 82.4 billion.

The lending to tourism industry was totaled NPR 2.6 billion and the total outstanding banking investment stands at NPR 275 million.

Entertainment sector also received some 52 percent hike in lending at NPR 7.96 billion, while it was NPR 41.66 billion for education sector and NPR 30 billion for health sector.

While majority sub-sectors have received hike in their lending year-on-year, advertising sub-sector witnessed a fall of 4.1 percent by receiving just NPR 1.65 billion.

Hope the new discussions on Budget FY 2019-20 and change in policies will add some positives to the other sectors too, giving a due boost to the Nepali economy.

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