Review period sees increment in Domestic Credit by 2.2 percent

The domestic credit increased by 2.2 percent in the review period of running fiscal year compared to a growth of 0.8 percent in the previous year. The credit expanded on account of a rise in claims on non-government financial enterprises along with an increase in private sector credit, said a report of Finance Ministry.
 
The report shows of the net claims on government declined in the review period as previous year. Such a claim declined by 3.8 percent in the review period compared to a decline of 7.1 percent last year. The decline in the claims on government was on account of surplus in the budget.
     
Similarly, claims on financial institutions grew by 35.4 percent in the review period. Such claims had increased by 47.6 percent last year. Commercial banks' short-term placement in finance companies, development banks and other financial institutions contributed increment of the claims on non-government financial institutions.
 
On the other hand, following some loan repayment by National Trading limited, Nepal Food Corporation and Nepal OilCorporation, claims on non-financial government enterprises declined by 17.9 percent in the review period as against a growth of 9.2 percent last year.
 
The report shows that compared to a growth of 2.2 percent last year, private sector credit grew by 3.8 percent in the review period. Private sector credit increased due to the credit expansion in production, construction, wholesale and retail business and service sector in the review period. Commencement of transactions by new commercial banks also contributed to the increase in such a credit in the review period.