Kathmandu. Executive Director and Spokesperson of Nepal Rastra Bank, Guru Prasad Poudel, has said that the loan system based on property collateral in Nepal has discouraged project loans. He said this while speaking at a program on ‘Current Challenges in the Banking Sector and the Economy’ organized by Artha Artha in Kathmandu. <\/p>\n
He said that about 67 percent of Nepal’s credit flow is based on property collateral. He said that this will discourage banks and financial institutions from issuing loans based on project feasibility and risk assessment. He said that banks are also hesitant to invest in innovation by taking risks after being able to lend on the backup of assets. He said that Nepal’s financial system should be taken from collateral-based loans to project-based financing. <\/p>\n
He stressed on the need to enable banks to provide loans based on innovation and risk assessment. He said that banks are not able to both expand and recover loans at present. He said that banks are facing problems in recovering loans due to the perception that small borrowers do not have to repay loans. He also said that banks and financial institutions are reluctant to disburse small loans for fear of problems in loan recovery. <\/p>\n
He said, “For a very long time, we have done asset back financing. Even today, about 67 percent of the people have fixed assets or collateral-based financing. This is probably a practice that happens in very few countries. It eventually bubbles up the price of assets or makes the price high, increases the price. It does not motivate project-based financing, it does not motivate it and it makes the banks lazy. Innovation kills. Because if we can give loans on the backup of the loan, who will invest in innovation and risk? We have to shift from asset back financing to project-based financing. We also have to make the banks innovative. ‘<\/p>\n
Director Poudel further said, “Now a narrative is being made that after taking small loans, there is no need to repay. Various types of groups, some political covers, there are activities to cover it up and promote it. This has also created a problem, if small loans are not to be repaid, then why should the borrowers also repay the loans that have to be paid now? Similarly, if they do not repay, then why should small loans be disbursed? If we look at the economy of Nepal, small loans are more important than big loans. If we look at small loans now, there are thousands of firms and companies in the domestic and small industry sector for which a loan of 10-15 lakhs used to be subsidiary, in such loan flows, different types of projects should have been brought in based, it seems that there is a little bit of flexibility in the flow of loans. The reason may be because of the narrative that there is no need to repay and also because of such groups. Once the loan is disbursed, the loan should be recovered. We should also be very strict in the recovery of the loan. ‘<\/p>\n
He claimed that the financial condition of Nepal’s banking sector is comparatively strong.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. Executive Director and Spokesperson of Nepal Rastra Bank, Guru Prasad Poudel, has said that the loan system based on property collateral in Nepal has discouraged project loans. He said this while speaking at a program on ‘Current Challenges in the Banking Sector and the Economy’ organized by Artha Artha in Kathmandu. He said that […]<\/p>\n","protected":false},"author":1,"featured_media":30509,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[90,117,123,126,129,147],"tags":[],"class_list":["post-39327","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-breaking-en","category-bankerka-kura-en","category-banking-update-en","category-banking-news-en","category-special-en","category-news-en"],"acf":[],"jetpack_featured_media_url":"https:\/\/english.bankingsansar.com\/wp-content\/uploads\/2026\/06\/guru-prasad-poudel.jpg","publishedDateNp":"\u096a \u0906\u0936\u094d\u0935\u093f\u0928 \u0968\u0966\u096e\u0969, \u0906\u0908\u0924\u0935\u093e\u0930 \u0967\u0969:\u0967\u096b","_links":{"self":[{"href":"https:\/\/english.bankingsansar.com\/bs_api\/wp\/v2\/posts\/39327","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/english.bankingsansar.com\/bs_api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/english.bankingsansar.com\/bs_api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/english.bankingsansar.com\/bs_api\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/english.bankingsansar.com\/bs_api\/wp\/v2\/comments?post=39327"}],"version-history":[{"count":1,"href":"https:\/\/english.bankingsansar.com\/bs_api\/wp\/v2\/posts\/39327\/revisions"}],"predecessor-version":[{"id":39328,"href":"https:\/\/english.bankingsansar.com\/bs_api\/wp\/v2\/posts\/39327\/revisions\/39328"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/english.bankingsansar.com\/bs_api\/wp\/v2\/media\/30509"}],"wp:attachment":[{"href":"https:\/\/english.bankingsansar.com\/bs_api\/wp\/v2\/media?parent=39327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/english.bankingsansar.com\/bs_api\/wp\/v2\/categories?post=39327"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/english.bankingsansar.com\/bs_api\/wp\/v2\/tags?post=39327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}