Credit flow in real estate sector drops

KATHMANDU: Credit disbursement in the real estate sector has come down in the recent months owing to the decision of the government to ban plotting of land and the unfavorable circumstances resulted by the COVID-19 pandemic.

As of mid-October this fiscal year, banks and financial institutions have disbursed credit worth Rs 160 billion in the real estate sector which is two percent less compared to what banks had disbursed in the sector as of mid-October last fiscal year.

BFIs had disbursed Rs 163 billion worth loan in the real estate sector by mid-October last fiscal year.

Entrepreneurs say that the real estate business has been affected due to the closure of the Land Revenue Offices throughout the lockdown period and the government’s decision to stop land plotting.

Though the government had recently decided to allow plotting of land, the Supreme Court last week stayed the government’s decision.

The double bench of Chief Justice Cholendra Shamsher JBR and justice Manoj Kumar Sharma has overturned the decision of Land Management, Cooperatives and Poverty Alleviation to open land plotting.

Advocate Santosh Bhandari had filed a writ petition in the Supreme Court seeking annulment of the Cabinet’s decision to open land plotting.