Kathmandu: In the second quarter of the current financial year, life insurance companies provided Rs. 78.23 billion policyholders’ loans by Paush end of the current financial year 2079-80. The life insurers witnessed a surge of 36.95 percent in the policyholders’ loans as compared to the Paush end of the last financial year 2078-79. Life insurers had issued Rs. 57.12 billion policyholders’ loan by Paush end of last FY.
In the second quarter of the current FY, Nepal Life Insurance (NLIC) issued Rs.27.89 billion and Life Insurance Corporation Nepal(LICN) disbursed a total of Rs. 20.80 billion in loans to their policyholders. National Life Insurance(NLICL) disbursed Rs. 9.48 billion while Asian Life Insurance (ALICL) issued Rs. 4.42 billion in loans to policyholders.
According to the Nepal Insurance Authority, the policyholders’ loan distributed by Suryajyoti Life Rs. 3.29 billion, Rastriya Beema Sansthan Rs. 2.55 billion, Prime Life Rs. 2.48 billion, Met Life Rs. 1.42 billion, Gurans Life Rs. 1.32 billion and Union Life Rs. 1.24 billion. Loan flow of Rs. The least reliable Nepal Lifele has disbursed a loan of Rs 21 crore 50 lakhs.
The industry has witnessed a surge in loan outflow amid the increasing interest rate of banks and financial institutions(BFIs). The BFIs have been offering double-digit interest rates on term deposits and the interest rate for loans has also been hiked. The BFIs offer 11 percent on term deposits and provide loans above 14 percent p.a. interest rate. The prevailing interest rates of policyholders’ loan ranges from 11 to 12 percent. The interest against the policyholders’ loan is payable semi-annually.