Nepal, Feb. 17 -- Faced with increasing bad loans, Nepal's Banks and Financial Institutions (BFIs) are showing a clear preference for issuing consumption-related loans over production-based credit to minimize recovery risks.

A report released by the Banks and Financial Institutions Regulation Department of Nepal Rastra Bank (NRB) reveals that BFIs had disbursed Rs 1.261 trillion in consumption loans by mid-January of the current fiscal year. This sector saw a significant inflow of over Rs 51 billion in just one month between mid-December and mid-January.

In contrast, credit disbursed to agriculture, forestry, and production-related activities (including beverages and non-food items) stood at a comparatively lower Rs 965.25 billion. Furt...