Nepalis have bought motor vehicles worth NPR 800 billion with loans secured from banks over the past half-decade.
Nepal Rastra Bank (NRB) stated that the banking and finance institutions (BFI) approved the purchase loans of NPR 837.12 billion during the fiscal years from 2016/17 to 2020/21. In addition, commercial banks approved loans worth NPR 679 billion during the same period.
As per the NRB, the BFI sector aided the economy with the purchase of loans of NPR 150.40 billion in 2016/17. The loan approvals surged to NPR 171 billion and NPR 180 billion in the next two years, respectively.
For the fiscal year of 2019, the amount surged to NPR 174 billion, and the fiscal year 2020/21 witnessed the loan approvals of NPR 160 billion.
NRB approved the threshold limit approval at 50 percent of the vehicle valuation in the fiscal year of 2016/17. The bank revised the limit to 65 percent in 2017/18.
However, for 2019/20, the limit was dropped to 50 percent again. This was done due to the pandemic impact.
The total loans issued by BFIs for hire-purchase loans plummeted by NPR 13.40 billion last year, stated NRB.Â
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