Laxmi Capital News
Credit flow to service sector jumps 14 percent

Lending of bank and financial institutions (BFIs) toservice industries jumped by 14 percent in the first eight months of thecurrent Fiscal Year 2017/18. 

According to a data of Nepal Rastra Bank (NRB),outstanding credit of BFIs to service industries rose 14 percent year-on-yearto Rs 177.97 billion in mid-March. 
Bankers say that the recovery in tourism sector has led to the rise in demandfor loans in service industries. 

Nepal welcomed 940,218 tourists -- a record high arrival-- in 2017. Though the number of was short of the target of welcoming onemillion visitors in a calendar year, the encouraging growth has made tourismentrepreneurs upbeat.

The buoyancy in the service industries, particularlytourism and hospitality, has also led to expansion of businesses.“"Looking at the data, you see that tourism and hospitality are the bestperformers. There are so many hotels being built, while travel and trekkingagencies are also doing wel”," said a banker“ "There is a surge inthe demand for credit for business expansion as well as setting up newproject”," added the banker. 

BFIs have outstanding loans of Rs 15.05 billion ontourism sub-sector under the service industries as at first eight months of thecurrent fiscal year -- a rise of 24.7 percent compared to the correspondingperiod of the last fiscal year.  Banks lump their loans to trekking,mountaineering, resort, rafting and camping, among other businesses, under thissub-category. 

Similarly, total loans to Hotel, another sub-sector underservice industries, also rose by 19.5 percent in the review period to Rs 60.84billion. Similarly, there was a growth of 18.5 percent in Advertising Agencysub-sector in the first eight months of FY2017/18. Credit flow in thissub-sector stood at Rs 1.76 billion. Outstanding lending to Automotive Serviceinched up 0.4 percent to Rs 2.94 billion. BFIs have an outstanding loan of Rs25.19 billion in health services that include hospitals, clinics andpharmacies, among others. Educational Services received total credit of Rs25.19 billion, up by 9.5 percent from the corresponding period of the lastfiscal year. 

Similarly, outstanding loans to entertainment andrecreation sub-sector increased by 8.1 percent to Rs 3.81 billion. Lending toother service companies also rose 13.6 percent to Rs 35.73 billion in the firsteight months of the current fiscal year.  

Source : My Republica, 29th April 2018

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