Nepal Rastra Bank (NRB) must stop granting operating license to new finance companies as the financial market is already overcrowded, says Ram Shanta Shrestha, chairman, Nepal Finance Companies Association.

Shrestha, who is also Chairman of Alpic Finance Ltd and a member of the Board of Directors of the Credit Information Bureau, believes that keeping tabs on the breakneck proliferation in the number of finance companies is mandatory to ward off ethical competition in the market.

Talking to Nepalnews, Ram Shanta Shrestha, chairman, Nepal Finance Companies Association, also urged the central bank to carry out regular supervision and monitoring of the financial companies to ensure a healthy and robust growth of the country’s financial sector.

He also relates that the finance companies must expand their physical presence in rural areas as it will help bolster the country’s rural economy.

“Nepali finance companies are highly urban-centric. They must penetrate the rural areas and for this the concentrated efforts on the part of all stakeholders are simply imperative,” he stated.

According to him, some 74 percent of Nepalese people are still bereft of banking services. “As political agendas continue to take precedence over vital economic topics, the slogan of financial inclusiveness has been eluding a large chunk of the poor people,” laments Shrestha.

He was also of the view that financial inclusiveness is vital in ensuring political stability. He argues the failure on the part of the government to come up with well articulated economic plans and programmes is responsible for rampant poverty in the country.

“The mushrooming growth in the number of banks and financial companies alone will not rescue a large number of people out of the quagmire of deprivation. Until and unless, the political leadership deems it fit to promulgate concrete and result-oriented economic policies, the country will continue to reel under the yoke of poverty,” Shrestha opines.

He also says that sustainable economic growth is a must to propel the country towards the path of political stability.

“The country is in dire need of more investment in various economic avenues. However, the lack of investment friendly atmosphere due to frequent political disturbances and other non-political problems like power outage is deterring potential investment in many sectors,” he says.

According to Shrestha, big investors are adopting a “wait and watch” policy to pour their bucks into businesses.

“As such, the state must cease from displaying lackadaisical attitudes towards removing barriers for potential investment,’ he prescribes. nepalnews.com