Himal Press 
KATHMANDU: Margin lending by banks and financial institutions increased by 18.79 billion, or 13.4%, over the first nine months of fiscal year 2025/26 to reach Rs 159.48 billion.
According to the latest macroeconomic situation data of the Nepal Rastra Bank (NRB), the total margin loan portfolio was at Rs 140.69 billion in mid-July 2025 when the current fiscal year began.
Margin lending refers to loans provided by banks and financial institutions against shares pledged as collateral. Investors use such facilities to purchase additional shares beyond their own capital in the expectation of earning higher returns.
The central bank data shows large borrowers continue to dominate the market. Loans above Rs 10 million accounted for Rs 110.04 billion or 69% of total margin loan disbursements. Loan disbursements in this category grew by a modest 11% in the review period.
The sharpest increase, however, was seen in smaller loans. Margin loans below Rs 2.5 million surged 47.2% to Rs 12.04 billion in mid-April from Rs 8.18 billion in mid-July 2025. This indicates a strong inflow of new and retail investors into the stock market.
Similarly, loans ranging between Rs 5 million and Rs 10 million increased 14% to Rs 18.27 billion, while loans between Rs 2.5 million and Rs 5 million rose 9.5% to Rs 19.23 billion.
Stock market analysts attribute the rise in margin lending to lower interest rates offered by banks, excess liquidity in the banking system, and the removal of individual borrowing caps for share-backed loans.
The NRB lifted the margin lending cap for individual investors in October last year. Before that, BFIs were allowed to extend investors a maximum of Rs 250 million as margin loans. The central bank had imposed limits of Rs 40 million per borrower from a single financial institution and Rs 120 million across the financial system for margin lending in the fiscal year. The central bank gradually eased these restrictions before completely removing the cap in October last year.
The stock market is slightly up compared to July 15 last year, when the Nepal Stock Exchange (Nepse) index stood at around 2,655.85 points. Nepse index closed at 2,744.40 points on Tuesday. Daily turnover, however, has dropped to Rs 4.66 billion compared to Rs 11.21 billion on July 15 last year.
