July 7: Deposit collection of banks and financial institutions in Madhesh Province have increased by 13 percent in the current fiscal year. In the meantime, credit flow increased by 37 percent. The expansion of the branch network of banks and financial institutions in Madhes has increased the financial literacy of the general public as well as the transactions through banks.

According to a study on provincial economic activities conducted by the Janakpur office of Nepal Rastra Bank, the deposits of banks have increased by 13.24 percent and reached Rs 247.09 billion as of last December. Such deposits had increased by 37.56 percent to Rs 218.20 billion in the corresponding period of the previous year.

Credit flow has been higher than the deposit collection of banks. Loans disbursed by banks increased by 37.29 percent to Rs 424.14 billion in the review period. Such loans had increased by 14.22 percent to Rs 308.94 billion in the first six months of last fiscal year.

The share of Madhesh Province in the total deposits of the banking sector is 5 percent while the credit flow is 9 percent. The number of branches of banks and financial institutions in the state has reached 1,703. Of them, microfinance companies have the highest number of  branches which stand at 1,031. Similarly, 559 branches of commercial banks, 82 branches of development banks and 31 branches of finance companies are in operation in the province. In terms of number of branches, Dhanusha has the highest number of branches at 242 and Rautahat has the lowest number at 180.

Loans extended by banks and financial institutions to the agriculture sector have increased by 43.53 percent to Rs 50.01 billion in the current fiscal year. Such a loan was Rs 34.84 billion in the corresponding period of the previous fiscal year. Similarly, concessional loans have also increased to Rs 44.68 billion. Such a loan was Rs 8.57 billion in the corresponding period of the previous year. Agriculture and concessional loans have been expanded due to the policy of NRB.

Of the total loans invested by banks and financial institutions in Madhesh till January, 51.69 percent has been invested in non-food manufacturing industries, 25.60 percent in agro-forestry and beverage manufacturing industries, 14.30 percent in construction industries, 6 in machinery and electronics and metal products manufacturing industries.