NRB's Reassessment of Dividend Cap May Spark Rally in Select Microfinance Stocks
Nepal Rastra Bank's plan to review the 15% dividend cap has triggered optimism in NEPSE's microfinance segment, with over 20 firms positioned to benefit.
The Nepal Rastra Bank (NRB) has signaled it may revisit its long-standing cap that restricts microfinance companies from distributing dividends beyond 15%. The statement, included in the newly released monetary policy for the upcoming fiscal year, triggered a bullish sentiment across microfinance stocks on Sunday.
Although Monday’s trading lacked Sunday’s vigor, anticipation remains high that an NRB circular will provide greater clarity on potential dividend ceilings. Based on third-quarter disclosures, several microfinance institutions (MFIs) could potentially distribute over 15% in dividends—if allowed.
According to data compiled by Merolagani, over 20 out of 50 NEPSE-listed microfinance firms show the capacity to exceed the current cap. This projection is derived by annualizing third-quarter earnings per share (EPS), though numbers may adjust after fourth-quarter results.
Chhimek Laghubitta leads the pack, with an estimated distributable EPS of NPR 76.35. Unique Nepal Laghubitta (NPR 56.64), Jeevan Bikas (NPR 54.97), and Small Farmers Development Bank (NPR 48.25) follow closely.
Others showing strong earnings include:
Aatmanirbhar Laghubitta – NPR 36.52
National Microfinance – NPR 35.60
Sworojgar Laghubitta – NPR 34.72
Support Microfinance – NPR 33.37
Mithila & Guras Laghubitta – NPR 31+ each
Even more conservative players like Swabhimaan, NESDO Samriddhi, and Upakar still show dividend potential ranging from NPR 25 to 30 per share.
At the lower end, Forward, Kalika, and Swabalamban may distribute 12–13%. Meanwhile, firms like Ganapati, Infinity, NIC Asia Laghubitta, and others fall below the 10% mark in estimated dividend capacity.
Notably, 14 microfinance firms reported negative distributable profits, suggesting no dividend payout unless fourth-quarter results see a turnaround. These include names such as WIN Nepal, Abhiyan, Nadep, Manushi, and Samudayik.
Market watchers now await NRB’s final decision on dividend policy, which could redefine investor appetite in the microfinance segment.