Automobile traders are having a hard time due to increased interest rates by banks facing a liquidity crunch. The traders said most banks have started to discourage loans and hire purchase schemes. Even those willing to invest have hiked rates to as high as 20 percent.

“They have been charging 15 percent interest even for term loan,” said Manoj Sethia, general secretary of Nepal Automobile Dealers’ Association. He said unavailability and costly loans to the automobile sector had started to put billions of investment as well as employment of over 600,000 people at risk. The association states that import of vehicles too had gone down by 50 percent in recent times.

However, according to data complied by the Department of Transport Management, a total of 117,981 vehicles have been registered during the first eight months of the current fiscal year. The number is already up by 15.02 percent compared to the total registration number of 102,570 vehicles last year.

An official at the automobile traders’ association said though the growth was at satisfactory level but still it was considered low in line with the population growth ratio in the country.

coutesy:the kathmandu post