As per the study ‘Current Macroeconomic and Financial Situation of Nepal’ based on two months period released by NRB on October 15, Banks and Financial Institutions (BFIs) extended margin lending of Rs 8.32 billion by mid-September 2024/25. It shows that the investors are borrowing loans from BFIs to invest in the share market.
The study shows that the margin lending which was Rs 90.09 billion by the end of last FY rose to Rs 99.76 billion by the end of two months period of the current FY.
Increasing liquidity, declining interest rates and up trending stock market can be attributed to the increase in margin lending.
Since the central bank released margin lending cap to institutional investors, the stock market is gradually taking pace. It can also be seen by the increment in volume of margin lending.
Currently, investors can take margin nature loan at a single-digit interest rate from BFIs which also helped boost investment in the stock market.
