April 7: Recession in the real estate business has started to affect not only the big but also the small businesses. Due to the recession, businessmen are struggling to pay the principal and interest of the loans taken for business operations on time.

 It is evident from the notices issued by the banks and financial institutions that there has been a rise in auctioning of mortgaged properties due to non-payment of loans.

Data from the previous quarter of the current fiscal year shows that auction-related notices of about 2,400 column centimeters (cc) on an average were published daily in the review period. In this period, the auction graph has almost doubled. The data of 'Minds Nepal' shows that more than 4,000 cc of auction-related information is being published daily.

Due to the recession in the real estate sector, the borrowers are not in a position to sell the land and repay the loan.

Banks and financial institutions, which published auction notices in 250,000 column centimeters (cc) space of newspapers in three and a half months from mid-September till the end of December last year, have published about 30 percent more notices in the last one and a half months.

The data of mid-January till the end of March, the information issued by banks and financial institutions for mortgage auctions is more than 320,000 cc.

According to Minds Nepal, this is the data of advertisements related to real estate auction published in 16 national daily newspapers published from Kathmandu.

According to this data, more than 4,500 cc auction notices have been published on a daily basis in the review period. If all the 10 pages of a national daily newspaper are filled with auction notices, it will be equivalent to 4,000 cc. Altogether 320,000 cc of auction notice can be published in a single newspaper of 10 pages (without any news) continuously for three months.

Banks and financial institutions, which issued 106,000 cc auction notices in the month of Magh (mid-January to mid-February), printed 155,000 cc in the following month (mid-February to mid-March). The notice published in mid-February to mid-March is almost 50 percent more than in January.

On April 2 alone, 60,000 cc auction notices were published on a single day. The Nepali month of Chaitra (mid-March to mid-April) is also the month to pay the principal and interest installments of the banks. At this time, the mortgage auction notice for those who cannot pay the bank loan is published in the upcoming months.

Currently, the number of auctions has reached between 1,000 to 1,500 per month. This figure was less than 400 per month in the months of Kartik, Mangsir and Poush (mid-October to mid-January).

A total of 1,000 real estate auction notices were published in those three months.

After that, more than a thousand auction notices were published in the month of Magh (mid-January to mid-February) followed by 1,500 notices in Falgun (mid-February to mid-March) and 600 by mid Chaitra (March end).

This data clearly shows how much the number of auctions has increased rapidly.

Commercial banks have the largest share in 320,000 cc of auctions published during this period.

Commercial banks have printed 200,000 cc notices followed by development banks which have published about 52,000 cc notices while cooperatives have published 38,000 cc notices.