Nepal Non-Performing Loans
Bank nonperforming loans as % of total gross loans FB.AST.NPER.ZS
Nepal's non-performing loans was 4.14% in 2025, ranked 53rd globally. This represents a 9.7% increase from 2024. Data from World Bank, covering 2016–2025.
Overview
Nepal's non-performing loans stood at 4.14% in 2025, a rise of +0.37pp from 2023. Based on recent trends, this figure is projected to reach 4.14% by 2025. Nepal ranked 53rd globally.
Nepal’s non‑performing loan (NPL) ratio has risen sharply over the nine‑year series, climbing from 1.68 % in 2016 to a peak of 4.14 % in 2025, the highest level recorded and the 53rd highest globally. The trough of 1.16 % in 2021 marks the lowest point in the series, after which a rapid deterioration resumed, pushing the ratio above the 4 % threshold that characterises many emerging economies. By comparison, peer economies with similar rankings such as Grenada (4.22 %) and Moldova (4.07 %) are already experiencing comparable stress levels in their banking sectors, suggesting that Nepal’s credit quality is converging with regional averages. The acceleration in NPLs coincides with broader macro‑financial vulnerabilities, including slower growth and heightened external shocks, which could further erode loan performance if not addressed. Strengthening prudential supervision and improving loan‑loss provisioning are likely to be decisive in reversing the upward trajectory and stabilising the banking system.
Data & projection
| Year | Non-Performing Loans | YoY change | Rank |
|---|---|---|---|
| 2026* trend | 4.64% | - | - |
| 2025* trend | 4.14% | - | - |
| 2025 | 4.14% | +0.37pp | #53 |
| 2023 | 3.78% | +1.33pp | #60 |
| 2022 | 2.44% | +1.29pp | #49 |
| 2021 | 1.16% | −0.52pp | #15 |
| 2020 | 1.68% | +0.02pp | #23 |
| 2019 | 1.66% | +0.10pp | #25 |
| 2018 | 1.56% | −0.14pp | #21 |
| 2017 | 1.70% | +0.01pp | #23 |
| 2016 | 1.68% | – | #24 |
Detected Pattern
Analysis
Nepal matched the Stagflation Risk pattern in 2016. Historically, 38% of countries showing this pattern (117 out of 307) saw non-performing loans improve within 24 months. View full analysis →
Frequently Asked Questions
Nepal's non-performing loans was 4.14% in 2025. Ranked 53rd globally. This represents a 9.7% increase from the previous year.
Nepal's non-performing loans peaked at 4.14% in 2025.
The lowest non-performing loans in Nepal was 1.16% in 2021.
Nepal ranks 53rd globally in non-performing loans as of 2025.
The World Bank indicator code is FB.AST.NPER.ZS. Data sourced from World Bank.
Nepal's non-performing loans is projected to reach 4.14% by 2025 based on trend extrapolation.
The non-performing loans of Nepal in 2025 was 4.14%. This ranks 53rd in the world.
Cite this page
@misc{historysaid_nepal_non-performing-loans,
title = {Nepal Non-Performing Loans},
url = {https://historysaid.com/nepal/non-performing-loans/},
publisher = {HistorySaid},
year = {2026}
}