Kathmandu. In recent years, there has been a tendency to shift the priorities of the banks and financial sector from small and disadvantaged groups to big businesses and safe investments. Fiscal Year 2081. According to the data, 54 financial institutions including commercial banks, development banks and finance companies have disbursed loans to the poor in 82 years.
According to the data of Nepal Rastra Bank, a total of Rs 296.26 billion loan was disbursed to the poor people in the last fiscal year. This amount is only 5.52 percent of the total loan disbursement of Rs 5.581 billion in the same period. Compared to the previous year, credit flow to the poor decreased by 0.9 percent or about Rs 15.92 billion.
Commercial Banks: Higher priority for large loans{
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Commercial banks alone have disbursed loans worth more than Rs 49.5 trillion. However, the share of the poor has been limited to 5.40 percent or Rs 256.78 billion. This amount has decreased by Rs 10.57 billion compared to the previous year.
Earlier, commercial banks had disbursed Rs 4.56 trillion in loans to the poor, but more than 6 percent of the loans were given to the poor. However, this rate has been decreasing in the last year. This indicates that commercial banks are more attracted to big business, industry or secure projects.
What is the status of the development bank?TAG_OPEN_strong_27
Although the development banks have disbursed loans worth Rs 526 billion, the share going to the poor has been limited to Rs 33.92 billion (6.61 percent). This is a decrease of Rs 4.14 billion compared to the previous year. In the previous year, the development banks had disbursed 7.74 percent of the loans to the poor people. It has come down to 6.61 percent this year. This shows that the contribution of development banks to small business and rural credit is declining.
Finance Company extended only 5% of loans {
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Finance companies have disbursed loans worth more than Rs 104 billion. However, the share of the poor was only 5.48 per cent or Rs 5.55 billion. In the previous fiscal year, they had disbursed 7.27 per cent or more than Rs 6.75 billion to the poor. However, the current figures show a decline of about 1.8 percentage points.
Loans targeted at the poor are generally focused on agriculture, small industries, self-employment, animal husbandry, entrepreneurship and rural areas. However, banks and finance companies are reluctant to engage in these areas due to high risk, difficulty in loan recovery, guarantee problems, and uncertainty in interest payments. Bankers say that small industries are not able to ask for loans because of the impact of the sluggish economy.
On the other hand, the financial institutions are focused on big business, real estate, import-export, hydropower and other safe sectors as they provide immediate profit and safe guarantee.
The Deposit and Credit Guarantee Fund has been securing the loans for the poor people. As a result of this security, banks have to increase their investment in such loans, but they are increasingly shrinking the loan expansion.
Due to the sluggishness of the economy and the contraction in the loan flow of microfinance financial institutions, the loan of the poor class has decreased in the last fiscal year. Experts say that the demand for loans in banks has increased due to the transaction through cooperatives, but now the cooperative is in crisis.
