Loss of Banking Sectors Due To Lack of Loan Demand.

Billions of investable funds with low interest rates are available in Nepali banks. Though people have a huge opportunity to invest, they are not satisfied with the established policies. This is why some economists, bankers, and policymakers have been expressing concerns about the lack of demand for loans from investors, as it does not lead to profits for the banks. On the other hand, Finance Minister, Bishnu Poudel has been highlighting the positive growth in Nepali investment. As mentioned by Nepal Rastriya Bank, we have around 6 trillion rupees available for investment. Similarly, interest rates for loans are in the single digits.

Industrialists and businessmen have stated that the main reason for the low demand for loans is the government's tight and unstable policies. People are hesitant to take significant steps when the environment is not stable. There is a sense of uncertainty, as interest rates can be increased at any time and in any manner. This creates fear among investors, as they may not be able to repay the loan if interest rates rise unexpectedly. It is the responsibility of the government to provide a stable policy framework to encourage investment and loan demand.

The difficulty and lengthy process in the loan application might be a reason for not seeking loans. Banks also evaluate the risk of lending; if they analyze that there is a low possibility of repayment, they may not provide the loan. Another reason could be the limited involvement of people in the business sector, which directly reduces interest in taking loans. Additionally, some investors may not have sufficient income from their businesses, which can also lead to low demand for loans from banks.