Microfinance Companies Restrained from Distributing Dividend Despite of Good Capacity

Aug 22, 2024 04:30 PM Merolagani



Although, many microfinance companies which have good dividend capacity, they cannot distribute dividend to their shareholders due to high non-performing loans (NPL).

As per directive of Nepal Rastra Bank (NRB), microfinance companies that have NPL above 5 percent cannot distribute dividend.

The central bank, through the Monetary Policy of the current FY, has allowed companies to count profit earned through NPL recovered till Shrawan to the profit of the last FY, thus, the decision is uncertain whether they can distribute dividend based on the financial reports of the last FY.

As per the report published by the companies, out of 50 microfinance companies, 21 may be unable to distribute dividend despite having good dividend capacity.

According to the data, Aatmanirbhar Laghubitta has the highest NPL of 13.22 percent followed by Unique Nepal with 12.74 percent and NESDO Samriddha Laghubitta with 12.58 percent NPL.




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