Two-thirds of industrial bank loans in Madhes mobilised in Parsa district

Kathmandu, Nov. 13

Almost two-thirds of the total industrial loan channelled by the banks and financial institutions has been mobilised to Parsa district alone.

According to a report of the annual economic activities of the province of Fiscal Year 2024/24 published by the Nepal Rastra Bank (NRB), of the Rs. 128.09 billion loan mobilised by the banks and financial institutions to the industries of the province, Rs. 81.7 billion (63.79 per cent) is invested in Parsa.

Dhanusha comes second with 10.31 per cent (Rs. 13.2 billion) share in the industrial loan mobilised in the province, followed by Bara with 5.83 per cent (Rs. 7.46 billion), Sarlahi with 5.26 per cent (Rs. 6.73 billion), and Siraha with 4.86 per cent (Rs. 6.22 billion).

Saptari has the smallest share of industrial loans with 2.12 per cent (Rs. 2.71 billion).

The total loans disbursed by banks and financial institutions to the industrial sector increased by 5.11 per cent in the FY 2024/25, reaching Rs. 128.09 billion. This loan amount was Rs. 121.87 billion in FY 2023/24.

Sector-wise, 51.76 per cent bank loan was mobilised to non-food product manufacturing industries, and 37.39 per cent in agriculture-forestry and beverage production industries. Construction industry received 5.26 per cent, and metal production, machinery, electronics and metal goods manufacturing 4.13 per cent.

Meanwhile, in the FY 2023/24, the area occupied by vegetables and horticulture in the province increased by 10.27 per cent. Conversely, the area occupied by food and other crops decreased by 1.49 per cent, and the area occupied by fruits and spice crops decreased by 25.20 per cent and 7.94 per cent, respectively.

Similarly, production of food and other crops increased by 14.01 per cent in the fiscal year 2081/082. While the production of vegetables and horticulture increased by 9.79 per cent, the production of fruits decreased by 9.07 per cent, and spice production decreased by 10.53 per cent.

In the last FY, the average production capacity utilisation of major industries included in the sample selection for the study was 46.47 per cent.

The report has noted that, as Madhes is located in the border region of India, it has potential for expanding trade and industry in the large Indian market.

Similarly, the cost of transporting industrial raw materials from India is likely to be low, making it possible to produce and export goods at a lower cost.

“As the province has the largest population density and the second-largest population in the country, ensuring easy labour supply, there is potential to establish industries in Madhes Province, increase production, enhance the competitiveness of manufactured goods, and increase the contribution of the industrial sector to the total Gross Domestic Product of the province,” read the report.

According to it, there is potential to develop areas with favourable geographical and industrial development prospects, such as market access and labour supply, into industrial zones,” read the report.

Likewise, abundant production of agricultural goods offers a good prospect for establishing agriculture-based industries (such as sugar, food processing, and oil industries).

According to the National Statistics Office, GDP of Madhes last year was Rs. 804 billion against the national GDP of Rs. 6107 billion. Madhes’ GDP is estimated to grow by 3.88 per cent in FY 2024/25.

 Published in The Rising Nepal daily on 14 November 2025.