Microfinance In NEPSE

Micro-finance is a financial institution, which provides the microloan to the low individuals or group to generate the basic income source. Furthermore, this type of financial institution is popular in developing countries such as Bangladesh, Uganda, Nepal, and Serbia.

Although microfinance has a long history, it became popular in 1970. Muhammad Yunus started the modern microfinance concept from Grameen Bank in 1976. Muhammad Yunus and Grameen Bank were awarded by Nobel prize in 2006 for their contribution in develop the microfinance sector. Micro-finance is popular in India as well. It is serving many poor clients in different states.

As per the report of the world bank, more than 500 million people are benefited from Microfinance all over the world. Microfinance contributed a lot to the Nepalese economy and there are more than forty listed Microfinance in NEPSE.

Microfinance in Nepal

Firstly, Microfinances started formally in 2036 BS in Nepal. Agriculture Development Bank Limited  (ADBL) played a significant role to introduce Microfinance in Nepal. Rastriya Banjiya Bank started the microcredit to women of rural area in 2038 BS.

In Nepal, Dr. Harihardev Pant started the microfinance concept. Secondly, Nepal Rastra Bank (NRB) started a microcredit program but later it changed into Microfinance. Microfinance used to operate under the development bank act but now it is operating under the banking and financial institution act. Microfinance is denoted under the ‘D’ category of financial institutions.

There was a couple of rural bank in the Western and Eastern part of Nepal in 2050. These banks used to supply microcredit in a rural area but it was not affected as it supposed to be. Finally, in 2050 BS much non-governmental microfinance like Nirdhan, Chhimek started to operate as microfinance.

Initially, Nepal Government announced many poverty-related loans such as small sector loans, priority sector loans, productive loan programs for rural women through financial institutions in 2050. Because of fewer branches of a financial institution in rural areas government failed to achieve the intended objective. So, the concept of Microfinance in Nepal emerged.

Listed Microfinances in NEPSE

S.N.	Symbol	Name
1	CBBL	Chhimek Laghubitta Bittiya Sanstha Limited
2	DDBL	Deprosc Laghubitta Bittiya Sanstha Limited
3	FMDBL	First Microfinance Laghubitta Bittiya Sanstha Limited
4	KMCDB	Kalika Laghubitta Bittiya Sanstha Limited
5	NLBBL	Nerude Laghubitta Bittiya Sanstha Limited
6	NUBL	Nirdhan Uthan Laghubitta Bittiya Sanstha Limited
7	RMDC	RMDC Laghubitta Bittiya Sanstha Limited
8	SKBBL	Sana Kisan Bikas Laghubitta Bittiya Sanstha Limited
9	SLBBL	Swarojgar Laghubitta Bittiya Sanstha Limited
10	SMFDB	Summit Laghubitta Bittiya Sanstha Limited
11	SWBBL	Swabalamban Laghubitta Bittiya Sanstha Limited
12	MLBBL	Mithila Laghubitta Bittiya Sanstha Limited
13	LLBS	Laxmi Laghubitta Bittiya Sanstha Limited
14	MMFDB	Mirire Laghubitta Bittiya Sanstha Limited
15	JSLBB	Janautthan Samudayic Laghubitta Bikas Bank Limited
16	WOMI	Womi Microfinance Bittiya Sanstha Limited
17	VLBS	Vijaya Laghubitta Bittiya Sanstha Limited
18	RSDC	RSDC Laghubitta Bittiya Sanstha Limited
19	NMBMF	NMB Laghubitta Bittiya Sanstha Limited
20	MERO	Meromicrofinance Laghubitta Bittiya Sanstha Limited
21	ALBSL	Asha Laghubitta Bittiya Sanstha Limited
22	NMFBS	National Microfinance Laghubitta Bittiya Sanstha Limited
23	SLBS	Suryodaya Laghubitta Bittiya Sanstha Limited
24	GMFBS	Ganapati Microfinance Bittiya Sanstha Limited
25	CLBSL	Civil Laghubitta Bittiya Sanstha Limited
26	ILBS	Infinity Laghubitta Bittiya Sanstha Limited
27	FOWAD	Forward Microfinace Laghubitta Bittiya Sanstha Limited
28	SMATA	Samata Gharelu Laghubitta Bittiya Sanstha Limited
29	MSLB	Mahuli Laghubitta Bittiya Sanstha Limited
30	GILB	Global IME Laghubitta Bittiya Sanstha Limited
31	SMB	Support Microfinance Bittiya Sanstha Limited
32	GBLBS	Grameen Bikas Laghubitta Bittiya Sanstha Limited
33	MLBSL	Mahila Laghubitta Bittiya Sanstha Limited
34	GLBSL	Gurans Laghubitta Bittiya Sanstha Limited
35	NICLBSL	NIC Asia Laghubitta Bittiya Sanstha Limited
36	SLBSL	Samudayik Laghubitta Bittiya Sanstha Limited
37	SDLBSL	Sadhana Laghubitta Bittiya Sanstha Limited
38	SMFBS	Swabhimaan Laghubitta Bittiya Sanstha Limited
39	SABSL	Sabaiko Laghubitta Bittiya Sanstha Limited
40	ACLBSL	Aarambha Chautari Laghubitta Bittiya Sanstha Limited
41	USLB	Unnati Nepal Laghubitta Bittiya Sanstha Limited
42	SNLB	Sarathi Nepal Laghubitta Bittiya Sanstha Limited
43	KLBSL	Kisan Laghubitta Bittiya Sanstha Limited

Top 5 Microfinance Listed in NEPSE

Currently, the market price of Microfinance is relatively high as compared to other financial institutions. Limited outstanding shares, good dividend and bonus capacity, high demand and low supply of share is the major reason of stock’s high price.

And, after a comparison of paid-up-capital, dividend distribution, Reserve and Surplus, Deposit and borrowing, Loan and Advance, Net Interest Income, and operating profit we listed the top five microfinance for investors.

• CBBL (Chhimek Laghubitta Bittiya Sanstha Limited)
• DDBL (Deprosc Laghubitta Bittiya Sanstha Limited)
• NUBL (Nirdhan Uthan Laghubitta Bittiya Sanstha Limited)
• SWBBL (Swabalamban Laghubitta Bittiya Sanstha Limited)
• FOWAD (Forward Microfinace Laghubitta Bittiya Sanstha Limited)

As compared to others, FOWAD microfinance’s stock market price is high. Recently, many microfinance is overpriced but these five companies are still good to buy.

Heading	CBBL	DDBL	NUBL	SWBBL	FOWAD
Paid Up Capital ‘Crores’	183	115	169	94.30	62.5
Earning Per Share (EPS)	69.65	59.75	56.23	20.21	77.07
Price/Earning Ratio	25.64	28.90	30.50	85.11	36.20
Market price Per Share	1786	1727	1715	1720	2790
Networth Per share	258.52	198.21	254.78	237.13	268.45
Listed Shares	18,300,300	11,562,486	16,950,000	9,430,000	6,255,190
Operating Profit (in Rs  Crore)	87.07	-72.14	44.71	56.54	39.45
Deposits ‘Rs Arba’	18.67	4.94	13.34	9.29	5.61
Borrowing ‘Rs Arba’	4.07	6.51	6.95	4.76	5.95

Here operating profit, Deposits, and borrowing are presented on the basis of the fourth-quarter report of 3076/77. So, the above five companies are good for long-term investors.

Future of Microfinance’s in Nepal

The policy about the financial liberalization, the support from other financial institutions to microfinance, different regulation of Nepal Rastra Bank will impact the growth of the microfinance sector in Nepal. Likewise, there are many rural areas where any financial institution is not reached yet. So, for overall financial development and to increase financial literacy across Nepal the growth of microfinance is necessary.

Many investors are investing their amount in the Microfinance sector. There is high competition between different microfinance companies. All microfinance stock’s prices are high. Also, Microfinance in Nepal are transparent in their financial and social activities and they are regulated by NRB under different Act so, this sector is safer for investment.

All microfinance have positive financial status and they are spreading their branches in different locations. Empowering women and support for small and medium enterprises are the major purpose of Microfinance in Nepal.