Nepal Rastra Bank has introduced a new regulatory framework for companies that provide hire purchase loans, a key source of finance for cars, motorcycles and heavy equipment in Nepal.
Association welcomes key provisions
The Association of Hire Purchase Companies of Nepal says the policy, issued on 26 Shrawan 2083, formally recognises the role of hire purchase firms and should create a more professional business environment.
According to the association, the new rules: - Allow hire purchase firms to charge a 1% service fee to customers - Address long‑standing issues around spread rate, supporting long‑term sustainability - Fix the company renewal period at 10 years, which is seen as encouraging for investors
Wider reach beyond banks
Association president Bishnu Kumar Agrawal said the core purpose of hire purchase companies is to serve customers who cannot easily access bank and financial institution loans for vehicles, motorcycles or heavy equipment.
There are currently 10 hire purchase companies licensed by Nepal Rastra Bank. These firms finance everything from Rs 10,000 consumer electronics to high‑value vehicles and machinery.
Under the new rules, companies can open contact offices in multiple locations, which is expected to extend services to more remote areas and small businesses.
Remaining concerns
The association still sees some practical gaps. It wants hire purchase companies to be able to use the Credit Recovery Tribunal to make loan recovery more efficient.
It has also urged regulators to quickly fix the lack of clear procedures for registering auctioned vehicles in Gandaki, Bagmati and Lumbini provinces.
Overall, the association believes the framework will make the hire purchase segment more organised, transparent and service‑oriented, while supporting entrepreneurship and job creation in Nepal.
Writes on vehicle pricing, taxation and the Nepali auto market from ongoing tracking of distributor price lists. Editorial policy.
