Banking and Financial Concerns: Hydropower | Agriculture | Tourism

Authors: Ankit Raj Suwal, Anushka Tuladhar and Bhupendra Rawal

Nepal’s current banking policies are impacting key sectors like hydropower, agriculture and tourism industries. The financial instability has led to limited access to loans, which is crucial for project development, expansion, and innovation.
The declining credit-to-deposit (C/D) ratio, rising net liquidity, high dependence on real estate as loan collateral, and increasing non-performing loans (NPLs) impacts banks’ ability to diversify investments into key productive sectors such as agriculture, tourism, and hydropower in Nepal.
While bank’s investments in agriculture and hydropower are growing incrementally, systemic challenges like collateral preferences, rising NPLs, and cautious credit policies continue to restrict broader economic diversification and growth.
ISSR aims to build a collaborative environment where all stakeholders contribute to shaping the amendments. The report includes discussions regarding diverse viewpoints of representatives from the various sectors: Hydropower, Agriculture, Tourism and Bank. The discussion aims to address critical issues for making Nepal’s banking system inclusive and future-ready.