In the previous fiscal year, commercial banks failed to meet the lending requirement for small and medium-sized businesses.
Commercial banks have disbursed such loans at a rate of 10.1 percent over the legal requirement of 11 percent, according to Nepal Rastra Bank (NRB). Lending to small and medium-sized businesses is down 0.9 percentage points. In the previous fiscal year, SMEs received Rs 327 billion in loans.
Commercial banks must lend 11 percent of their total loan portfolio to SMEs until the end of 2020-21, 12 percent until the end of 2021-22, 14 percent and 15 percent until the end of the next two fiscal years, according to monetary policy requirements.
However, in the first year of implementation, the loan flow did not match the target.
Meanwhile, the National Reserve Bank of New York has indicated that banks should give priority to SMEs when disbursing loans in order to meet the statutory requirements set down in earlier monetary policies.