Nepal Automobile Importers and Manufacturers Association (NAIMA) has urged the government to increase the loan-to-value ratio to 80% from the current 60% on all types of vehicles. The organization has officially sent a letter to Nepal Rastra Bank and the Ministry of Finance requesting them to revise the LTV and help ease the automobile industry.
NRB set EV LTB to 60% in early 2025. The decision was not taken positively even last year. Industry stakeholders argued that the policy contradicted the government’s stance of promoting EVs. NAIMA has now renewed the call for its readjustment and brought notice of NRB and the Finance Ministry to it.
Setting 80% loan to value means buyers will only have to pay up to 20% in downpayment significanlty raising their financial convenience to purchase a new vehicle.
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NAIMA wants the LTV increased to 80%
NAIMA holds that one of the reasons behind the slowdown in the auto industry is the constricting 60% LTV on vehicles. The high down payment requirements are forcing consumers from affording vehicles, which reduces sales and also impacts overall economic activity and revenue collection.
Further, it said that the automobile sector is a key industry that contributes significantly to the government revenue through customs, excise duties, and VAT. Therefore, it adds that the revised LTV will have a positive outcome on the industry, economy, and revenue collection.
NAIMA also shares that the auto industry directly and indirectly keeps the industry running for service centers, spare parts, insurance, delivery, etc. It also creates employment for several. Therefore, it wrote that it sought policy-level facilitation from the government.