NRB May Reconsider Dividend Cap: These Microfinance Stocks Could Rally If 15% Limit Is Lifted
The NRB is reviewing the 15% dividend cap on microfinance firms. If revised, over 20 microfinance companies could distribute higher dividends, driving investor interest.
Nepal Rastra Bank (NRB) is considering a revision to its current monetary policy provision that restricts microfinance institutions (MFIs) from distributing more than 15% annual dividends.
This potential policy shift has fueled optimism among retail investors. On Sunday, NEPSE saw a rally in microfinance stocks as expectations grew around the dividend cap being lifted.
While Monday's market lacked the same momentum, the NRB's upcoming circular will offer further clarity. Based on the third quarter financial statements, Merolagani has compiled annualized earnings per share (EPS) data to gauge which MFIs could benefit the most.
Among the 50 listed MFIs, over 20 have the potential to declare dividends exceeding 15%, assuming the NRB allows it. At the top is Chhimek Laghubitta, with a potential dividend capacity of NPR 76.35 per share. It is followed by:
Unique Nepal Laghubitta – NPR 56.64
Jeevan Bikas Laghubitta – NPR 54.97
Small Farmer Development Bank – NPR 48.25
Aatmanirbhar Laghubitta – NPR 36.52
National Microfinance – NPR 35.60
Sworojgar Laghubitta – NPR 34.72
Support Microfinance – NPR 33.37
Mithila Laghubitta – NPR 31.69
Gurans Laghubitta – NPR 31.20
Other strong performers include Swabhimaan, Nesdo Samriddhi, Upakar, Dhaulagiri, and CYCL, all with 15–31 NPR dividend potential.
Meanwhile, institutions like Forward, Nirdhan Utthan, and Kalika may offer dividends in the 12–13% range. However, giants like Swabalamban, Asha, Ganapati, RSDC, and several others are likely to remain under the 10% threshold.
Thirteen firms—including Win Nepal, Abhiyan, Manushi, and Mirmire—reported negative distributable earnings as of Q3 and are unlikely to distribute dividends unless Q4 improves dramatically.