FINANCING PRACTICES OF BANKS AND FINANCIAL INSTITUTIONS IN NEPAL

Proposal analysis and credit appraisal includes the examination of business and financial aspects with respective importance to measure economic, financial and technical feasibility of the project and repayment capacity of the borrowing firm. Such analysis has far reaching implication on the mobilization of resources as well as on the earning and soundness of the banks and financial institutions (BFIs). We examine this process in the context of bank lending to tourism business enterprises through a survey. The result incorporates the importance accorded by BFIs on business and financial aspects of the proposal. Using Phi-Coefficient ( ) the study finds a strong relationship between various aspects examined during the proposal analysis and credit appraisal. Further, we also examine the cross significance of business and financial aspects and find a significant relationship between business prospects with most of the financial aspects. The findings are relevant for both bankers and beneficiaries to ensure the suitability of tourism sector loan processing and significance of credit appraisal.