Districts around Valley receive biggest chunk of agri loansDistricts surrounding the Kathmandu Valley are the biggest consumers of agricultural loans in the country, a latest Nepal Rastra Bank report shows.
Districts surrounding the Kathmandu Valley are the biggest consumers of agricultural loans in the country, a latest Nepal Rastra Bank report shows.
Nine districts, namely Kathmandu, Lalitpur, Bhaktapur, Sindhupalchowk, Dolakha, Kavrepalanchowk, Dhading, Nuwakot and Rasuwa, obtained Rs22.4 billion in agricultural loans from banks and financial institutions in the last fiscal year, up 7.2 percent than in the fiscal year 2015-16, shows the latest Economic Activities Study Report of the NRB, the central bank. Credit disbursed in these nine districts accounted for 24.4 percent of the total agricultural loans issued by banks and financial institutions in the fiscal year 2016-17.
Banks and financial institutions provide loans to support plantation of various crops, build and scale-up poultry and fishery farms, set up cold storage facilities and slaughterhouses, purchase fertilisers and pesticides, and construct irrigation facilities, among others.
Banks and financial institutions extended Rs91.8 billion in loan to the agricultural sector in the last fiscal year, up 20 percent than a year ago, according to the report, which was prepared based on studies conducted in 57 districts of the country. This credit volume, however, accounted for only 4.7 percent of the total loans disbursed by commercial banks, development banks and finance companies in the last fiscal year.
The NRB has been pushing banking institutions to increase disbursement of loans in the agricultural sector, but improvement has not been made despite the government move to provide subsidy on premium of agricultural insurance.
Of the total agricultural credit disbursed in the last fiscal year, 22.4 percent went to Bara, Parsa, Chitwan, Makwanpur and Rautahat districts. Another 15.7 percent of the agricultural loans went to Ilam, Jhapa, Dhankuta, Sunsari, Morang, Saptari, Taplejung, Paanchthar and Sankhuwasabha districts.
Another biggest recipient of agricultural loans in the last fiscal year was Rupandehi, Kapilbastu, Nawalparasi, Palpa, Arghakhachi and Gulmi districts. These districts consumed 10.6 percent of the total agricultural loans disbursed by banks and financial institutions. Kailali, Kanchanpur, Dadeldhura, Doti, Baitadi, Acham and Darchula districts, meanwhile, received only 1.3 percent of the total agricultural loans, making them the lowest recipient of agricultural credit. Of the total agricultural loans disbursed in the last fiscal year, 20.5 percent was used to set up slaughterhouses, while another 20 percent of the loan was disbursed to build or scale up poultry farm, shows the NRB report.