KATHMANDU: Global IME Bank’s Chief Marketing Officer Raj Aryal said most people taking hire purchase loans for vehicles now have a stable source of income.
He made the remarks at the “Mobilizing Mobility Through Finance and Insurance” program organized by the Nepal Automobile Importers and Manufacturers Association (NAIMA) on Thursday.
Aryal said the average age of people buying vehicles used to be around 43 years. It has now come down, with 60% of vehicle loan borrowers below the age of 40.
“Among them, the number of women is also higher,” he said.
Kathmandu still has the highest demand for vehicle loans, but the market is gradually growing outside the capital as well. “We are also expanding our services to cities outside Kathmandu,” Aryal said.
He said people with a regular source of income can easily take vehicle loans. Even students can buy vehicles through financing if they meet the required conditions and have a stable source of income.
Aryal said banks also find it easier to work with hire purchase companies because some of the lending risk is shared.
If all the required documents are complete, banks can provide the loan as early as the next day, he said.
He added that vehicle loans are provided based on the loan-to-value (LTV) ratio. Banks usually calculate the interest rate by adding a certain premium to the base rate.
