Kathmandu, Feb. 21
The Nepal Automobile
Importers and Manufacturers Association (NAIMA) has requested the Nepal Rastra
Bank (NRB) and the Ministry of Finance to increase the loan-to-value (LTV)
ratio for hire-purchase loans on all types of vehicles from the current 60 per
cent to a maximum of 80 per cent.
According to NAIMA, the
existing 60 per cent cap is one of the principal reasons for the slowdown
observed in the automobile market. “The requirement for a high initial deposit
has left many consumers unable to purchase vehicles, resulting not only in
reduced sales but also in a direct impact on overall economic activity and
revenue collection,” it said in a statement.
The automobile sector
is one of the key contributors to government revenue through customs duties,
excise duties and value-added tax (VAT). “NAIMA believes that an increase in
vehicle sales would have a significant and positive effect on revenue
collection,” read the statement.
In view of the excess
liquidity currently present in the banking system, NAIMA considers that
increasing the LTV ratio for vehicle loans could be a practical and effective
means of capital mobilisation. As hire-purchase loans are instalment-based and
secured against collateral, they are regarded as a comparatively safe lending
segment.
NAIMA has also stated
that vehicle sales stimulate auxiliary industries such as service centres,
spare parts, insurance, financial services, transport and technical services,
thereby generating direct and indirect employment. “We therefore emphasise the
need for policy facilitation in this sector,” said NAIMA, adding that it will
continue to advocate on this matter in line with its mission of ‘mobility for
all’.
Published in The Rising Nepal daily on 22 February 2026.
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