Banking News – Member of the House of Representatives Ashish Gajurel has urged the government to introduce immediate policy reforms to restore private-sector confidence, saying businesses and investors remain reluctant to take loans despite ample liquidity in the banking system.

Speaking at a meeting of the House of Representatives, Gajurel said the country’s primary economic challenge is no longer a shortage of loanable funds in banks but rather the declining confidence of the private sector to invest.

“Banks have money, but businesses are not willing to borrow,” he said. “The confidence of entrepreneurs to take loans has weakened, and the government must take steps to boost it.”

Gajurel noted that although the government has set an economic growth target of 7 percent for the current fiscal year, achieving that goal will be difficult unless private-sector investment and credit expansion increase significantly.

According to him, the government should focus immediately on three key areas to encourage greater credit flow: policy stability, investment security and the mobilization of loans toward productive sectors.

He said businesses can only make long-term investment decisions when government policies are stable and predictable. Frequent policy changes, he argued, make it difficult for entrepreneurs to plan and commit to investments, underscoring the need for clear and consistent policies.

Gajurel further stated that the private sector will remain hesitant to take risks and borrow from banks unless it is confident that its investments, businesses and assets are protected.

“The government must take the private sector into confidence,” he said.

He emphasized that the private sector should not be viewed solely as a source of tax revenue and employment generation but as a key partner in the country’s economic development. Regular dialogue with investors, timely resolution of business-related issues and greater policy clarity would help strengthen business confidence, he added.

Gajurel also stressed that increasing credit disbursement alone should not be considered an achievement. Instead, loans should be directed toward productive sectors that generate output, employment and income.

According to him, expanding credit to productive industries would not only support business growth but also create jobs, increase incomes and stimulate market demand across the economy.