FINANCIAL PERFORMANCE ANALYSIS OF NEPALESE FINANCE COMPANY

Abstract

Nepal's finance sector has expanded significantly. Because they can raise more money, Finance Company has an edge in offering a wide range of financial services to its clients. The primary aim of this research is to identify the factors that influence the financial performance of finance companies in Nepal. Additionally, the study aims to investigate the impact of internal variables and finance-specific features on the financial achievement of these companies. Therefore, it may be concluded that the size of the finance sector has little bearing on its financial performance. The benefit of capitalization suggests that Nepali finance companies have enough easily covered assets to meet both short- and long-term obligations. The volume of credit deposit ratio significantly and favorably affects the financial performance volumes of Nepali finance companies. Additionally, the results demonstrated that interest rates had a favorable and considerable impact on customers' return on assets. The study's conclusions showed that there is an inverse link between the total amount of loans given by the finance company and the spread in finance interest rates, meaning that high interest rates deter borrowing and conversely. Additionally, there is proof of a substantial negative correlation between the loan and advance amounts made by Nepalese financial companies and the average interest rate spread. Therefore, as the rate of financial success rises, the private sector experiences a decline in financial performance. The study's conclusions demonstrated that the size of the finance company and the overall credit-deposit ratio have a significant impact on the loans and advances made by the finance company. The main asset and source of income for finance companies is their loan portfolio, so they should invest more money in it. Finance will be able to effectively and sustainably meet its liquidity commitment to its borrowers by doing this. Key Word: Financial Performance Analysis of Nepalese Finance Company