Kathmandu, June 15: Credit extended by banks and financial institutions (BFIs) to Nepal’s industrial sector reached Rs. 1.78 trillion by the first half of the current fiscal year, although lending growth slowed considerably compared to last year, according to the Nepal Rastra Bank’s (NRB) Semi-Annual Economic Activity Study.
The report shows industrial lending rose 7.99 percent year-on-year to Rs. 1,778.30 billion by mid-January 2026, significantly lower than the 17.66 percent growth recorded during the same period of the previous fiscal year. Industrial loans accounted for 30.82 percent of total credit disbursed by BFIs.
Among industrial sectors, non-food manufacturing industries received the largest share of lending at 35.67 percent, followed by electricity, gas and water industries with 26.62 percent.
Agriculture, forestry and beverage-related industries accounted for 20.64 percent of industrial credit, while construction received 12.26 percent. Metal products, machinery and electronics industries accounted for 4.14 percent, and mining-related industries received 0.67 percent.
Bagmati Province continued to attract the overwhelming share of industrial credit, receiving Rs. 1.28 trillion, or 72.22 percent of total industrial lending.
The remaining distribution included:
- Koshi: Rs. 164.04 billion (9.22%)
- Lumbini: Rs. 140.70 billion (7.91%)
- Madhesh: Rs. 128.47 billion (7.22%)
- Gandaki: Rs. 28.72 billion (1.62%)
- Sudurpaschim: Rs. 27.63 billion (1.55%)
- Karnali: Rs. 4.41 billion (0.25%), the lowest among all provinces.
The NRB report also revealed that 461 new industries were registered nationwide during the review period.
Bagmati Province accounted for 363 of the new registrations, followed by Madhesh (25), Lumbini (24), Koshi (21), Gandaki (19), Karnali (5) and Sudurpaschim (4).
Proposed foreign investment in the newly registered industries totaled Rs. 55.83 billion, with the projects expected to create 22,885 jobs.
Despite the increase in industrial lending, the report noted a slight decline in overall industrial activity. Average capacity utilisation across 195 surveyed industries fell to 42.11 percent, down from 42.94 percent in the corresponding period last year.
Garment industries recorded the highest capacity utilisation at 95.74 percent, followed by textiles (90 percent), hydropower (82.74 percent), tyre and tube manufacturing (76.20 percent) and noodle industries (70.06 percent).
Capacity utilisation improved in industries producing garments, sugar, steel products, soybean oil, aluminium products, beer, processed leather, tyres and tubes, chemicals, sawn timber, soft drinks, alcoholic beverages, biscuits, yarn and cement.
However, utilisation declined in industries manufacturing G.I. pipes, vegetable ghee, cigarettes, bricks, iron rods and sheets, slippers, wheat flour, processed tea and milk, paper, electric wires and cables, and household metal products, indicating uneven recovery across Nepal’s industrial sector. #nepal
