The Housing Finance System

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A. Primary Housing Finance Market

A.1 Industry Structure and Performance
VariableEnd of 2018End of 2017End of 2016SourcesVar ID
Number of firms originating and funding mortgage loans7982118
Nepal Rastra Bank
A.1.1
Types of originating lenders/market share:A.1.2
Universal/ commercial banks81.23% of total83.31% of total76.72% of total
Nepal Rastra Bank
A.1.2.1
General non-depository financial institutions3.96% of total3.68% of total4.51% of total
Nepal Rastra Bank
A.1.2.4
Others (e.g. insurance co, pension funds, labor tax funds)14.81% of total13.01% of total18.77% of total
Nepal Rastra Bank
A.1.2.5
Identify the 3 largest loan originating lendersNIC ASIA Bank, Everest Bank, Rastriya Banijya BankNIC ASIA Bank, Everest Bank, Prabhu BankNIC ASIA Bank, Everest Bank, Prabhu Bank
Nepal Rastra Bank
A.1.3
Are there (quasi) public mortgage lenders:Yes  
Nepal Rastra Bank
A.1.4
Universal/ commercial banksYes  
Nepal Rastra Bank
A.1.4.1
Level of Non-Performing Mortgage Loans (90 days or more past due):A.1.6
Average 1997-2007 A.1.7
A.2 Size of Mortgage Finance Sector
VariableEnd of 2018End of 2017End of 2016SourcesVar ID
Total amount of home mortgage loans outstanding at the end of year in millions of USD:1,882.58 USD (millions)1,795.76 USD (millions)1,474.64 USD (millions)
Nepal Rastra Bank
A.2.1
Total amount of home mortgage loans outstanding at the end of year as % of GDP (current)6.48%7.13%6.96%
Nepal Rastra Bank and WEO
A.2.1.1
and as % of all credits outstanding8.12%8.16%8.66%
Nepal Rastra Bank
A.2.1.2
A.3 Housing Finance Products
VariableEnd of 2018End of 2017End of 2016SourcesVar ID
Mortgage products as % of all mortgages (approx.) in local currency:A.3.1
Most prevalent type of foreign currency mortgage used:A.3.3
Most frequent interest rates on fully amortizing:A.3.4
Typical lender fees associated with mortgage origination: A.3.6
Typical third party fees associated with mortgage origination:A.3.7
Loan-to-Value (LTV) on first mortgage: A.3.8
Maximum LTV60.0060.0066.00
Nepal Rastra Bank
A.3.8.1
Mortgage pmt-to-income ratio A.3.10
A.4 Lending and Servicing Process
VariableEnd of 2018End of 2017End of 2016SourcesVar ID
Which institutions define underwriting rules? A.4.2
A.5 Credit Risk Assessment
VariableEnd of 2018End of 2017End of 2016SourcesVar ID
Do credit bureaus exist? YesYesYes
Credit Information Bureau
A.5.2
Are there legal/regulatory constraints to gaining access to credit information?YesYesYes
Credit Information Bureau
A.5.2.1
B. Funding Sources for Mortgages and the Secondary Mortgage Market
VariableEnd of 2018End of 2017End of 2016SourcesVar ID
What are the main funding sources for mortgages?B.1
Retail funding (deposits/other)primaryprimaryprimary
Nepal Rastra Bank
B.1.1
Other secondarysecondarysecondary
Nepal Rastra Bank
B.1.5
C. Housing Microfinance
VariableEnd of 2018End of 2017End of 2016SourcesVar ID
Are non-collateralized housing micro-finance loans offered? Yes  
Research
C.1
Types of lenders operating in the housing micro-finance (HMF) sector:C.2
Commercial banksYes  C.2.1
Specialized non-depository MFIs Yes  C.2.2
NGOsYes  C.2.3
OthersYes  C.2.4
NoneNo  
Research
C.2.5
Level of NPLs (>90 days past due) in HMFC.4
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Notes: % of households
Notes: % of households
Notes: % of households
Notes: % of households
Notes: % of households
Notes: % of households
Notes: % of households
Notes: % of households
Notes: % of households
Notes: % of households
Notes: 50% for Kathmandu Valley
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: As of mid-December
Notes: Basobas Mahila Sahakari Sanstha (Settlement Women Cooperative) offers collateral-free housing loans
Notes: Capital gains realized from selling real property that is not used in business are taxed at a flat rate of 10%.
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit Information Bureau
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Credit reports only to members, central bank or to any institutes as recommended by the Central Bank
Notes: Development banks
Notes: Development banks
Notes: Development banks
Notes: Development banks
Notes: Development banks
Notes: Development banks
Notes: Development banks
Notes: Development banks
Notes: Excludes MFIs
Notes: Excludes MFIs
Notes: Excludes MFIs
Notes: Excludes MFIs
Notes: Excludes MFIs
Notes: Excludes MFIs
Notes: Excludes MFIs
Notes: Excludes MFIs
Notes: Finance companies
Notes: Finance Companies
Notes: Finance Companies
Notes: Finance Companies
Notes: Finance Companies
Notes: Finance Companies
Notes: Finance Companies
Notes: Finance companies
Notes: In 2016, NRB offered a subsidized 2% rate for house reconstruction on loans up to Rs. 2.5 million inside Kathmandu, Rs. 1.5 million outside, and Rs. 300,000 under group guaranteed microcredits.
Notes: In 2016, NRB offered a subsidized 2% rate for house reconstruction on loans up to Rs. 2.5 million inside Kathmandu, Rs. 1.5 million outside, and Rs. 300,000 under group guaranteed microcredits.
Notes: In 2016, NRB offered a subsidized 2% rate for house reconstruction on loans up to Rs. 2.5 million inside Kathmandu, Rs. 1.5 million outside, and Rs. 300,000 under group guaranteed microcredits. This program was ended in October 2018 and replaced with the Integrated Working Procedure for Subsidised Credit which provides concessional loans of up to Rs. 300,000 at a 5% rate covered by the government.
Notes: In 2016, NRB provided a refinance facility at 0% interest rate for subsidized loans extended to earthquake victims. The loan offer ended in October 2018.
Notes: In 2016, NRB provided a refinance facility at 0% interest rate for subsidized loans extended to earthquake victims. The loan offer ended in October 2018.
Notes: In 2016, NRB provided a refinance facility at 0% interest rate for subsidized loans extended to earthquake victims. The loan offer ended in October 2018.
Notes: In 2016, NRB provided a refinance facility at 0% interest rate for subsidized loans extended to earthquake victims. This program ended in October 2018.
Notes: In 2016, NRB provided a refinance facility at 0% interest rate for subsidized loans extended to earthquake victims. This program ended in October 2018.
Notes: In 2016, NRB provided a refinance facility at 0% interest rate for subsidized loans extended to earthquake victims. This program ended in October 2018.
Notes: Max value of housing loan is Rs.10 million (~USD100,000)
Notes: Max value of housing loan is Rs.10 million (~USD105,000)
Notes: Max value of housing loan is Rs.10 million (~USD95,000)
Notes: Max value of housing loan is Rs.10 million (~USD95,000)
Notes: Max value of housing loan is Rs.10 million (~USD95,000)
Notes: Max value of housing loan is Rs.15 million (~USD135,000)
Notes: Max value of housing loan is Rs.6 million (~USD80,000)
Notes: Max value of housing loan is Rs.8 million (~USD95,000)
Notes: Nepal Bank, Rastriya Banijya Bank, and Agriculture Development Bank are state-owned commercial banks.
Notes: Rent-free occupancy; % of households
Notes: Rent-free occupancy; % of households
Notes: Rent-free occupancy; % of households
Notes: Rent-free occupancy; % of households
Notes: Rent-free occupancy; % of households
Notes: Squatting or other form of occupancy; % of households
Notes: Squatting or other form of occupancy; % of households
Notes: Squatting or other form of occupancy; % of households
Notes: Squatting or other form of occupancy; % of households
Notes: Squatting or other form of occupancy; % of households
Notes: Urban house and land tax ranges from 0.05% to 1.5% annually