Share-backed lending rises 38 percent in a year, NRB data shows

January 10, 2026, 11:34:14 AM |

KATHMANDU: Share-backed loans, commonly known as margin lending, extended by banks and financial institutions in Nepal increased sharply by 38 percent over the past year, reflecting renewed risk appetite in the stock market and improved credit flow conditions.

According to the latest data published by Nepal Rastra Bank (NRB), outstanding share-backed loans stood at Rs 107 billion as of mid-Mangsir last year. By mid-Mangsir this year, the volume had surged to Rs 148 billion, marking a significant year-on-year expansion in margin-type lending.

However, the growth momentum appears to have moderated in recent months. Compared to mid-Asar, the outstanding share-backed loan portfolio increased by only 5.7 percent by mid-Mangsir. NRB data shows that such loans amounted to Rs 140.70 billion as of mid-Asar, indicating a relatively slower rise in the first five months of the current fiscal year.

A breakdown of the loan portfolio shows a clear concentration in large-ticket lending. As of mid-Mangsir, loans exceeding Rs 10 million accounted for Rs 103 billion of the total share-backed credit. This suggests that high-net-worth individuals and large investors continue to dominate margin borrowing in Nepal’s capital market.

Loans ranging between Rs 5 million and Rs 10 million totaled Rs 17.90 billion during the same period. Similarly, share-backed loans between Rs 2.5 million and Rs 5 million reached Rs 18.28 billion, while loans below Rs 2.5 million stood at Rs 8.72 billion.

The sharp annual increase in margin lending comes amid improved sentiment in the Nepal Stock Exchange (NEPSE), following a period of subdued market activity caused by tight monetary policy and high interest rates. Analysts say easing liquidity conditions and expectations of further policy flexibility have encouraged investors to return to equity markets, increasing demand for share-backed credit.

At the same time, the dominance of large loans has raised concerns about concentration risk in the banking system. Regulators and market observers continue to closely monitor margin lending due to its direct exposure to stock market volatility and its potential impact on financial stability.

Nepal Rastra Bank has maintained regulatory caps and risk-weight provisions on share-backed lending to prevent excessive speculation. Officials say the central bank will continue to use macroprudential tools to balance credit growth with market stability as equity-linked borrowing gains momentum again.

Fiscal Nepal |

Saturday January 10, 2026, 11:34:14 AM |