In this study, we will take 5 top retail microfinance of Nepal based on their performance until the third quarter of the fiscal year 2076/77. We have selected the microfinance companies on the basis of the volume of business they have generated. The microfinance include (based on the current paid-up capital):
Note: Click on the links above to see the individual performance in the third quarter of FY 2076/77
Here, we will try to make the financial comparison of these microfinance companies based on the following indicators.
Paid-Up Capital & Reserve/Surplus
Chhimek Laghubitta and Nirdhan Utthan Laghubitta have the highest paid-up capital of Rs. 150 crores. On the other hand, Forward Community Microfinance has the lowest capital among the five with Rs. 50.04 crores.
Chhimek Laghubitta leads in total reserve & surplus with Rs. 164.31 crores closely followed by Nirdhan Utthan Laghubitta with Rs. 161.69 crores in reserve. Deprosc Laghubitta, on the other hand, has the lowest reserve of Rs. 82.39 crores.
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The paid-up capital and the reserve and surplus of the five microfinance are shown in the table below:
|Microfinance||Paid up capital(Rs.’crores’)||Reserve and Surplus(Rs.’ crores’)|
|Nirdhan Utthan Laghubitta||150||161.69|
|Forward Community Laghubitta||50.04||89.08|
Borrowings, Deposits & Loans
Nirdhan Utthan Laghubitta has the highest borrowing of Rs. 6.89 Arba while Chhimek Laghubitta has the lowest borrowings of Rs. 4.62 Arba.
In terms of deposit collection, Chhimek Laghubitta vastly surpasses other microfinance with Rs. 18.07 Arba. Nirdhan Utthan Laghubitta is second with Rs. 12.83 Arba in deposits. Deprosc has the lowest deposit of Rs. 4.90 Arba.
Similarly, Nirdhan Utthan leads the others in terms of total loans and advances with Rs. 20.74 Arba. Likewise, Chhimek is a close second with Rs. 20.37 Arba in loans and advances. Forward Community has floated the lowest loans and advances of Rs. 11.82 Arba.
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The borrowings, deposits and loans of the microfinance is presented in the table below:
|Microfinance||Borrowings (Rs.’Arba’)||Deposits(Rs.’Arba’)||Loans & Advances(Rs.’Arba’)|
|Nirdhan Utthan Laghubitta||6.89||12.83||20.74|
|Forward Community Laghubitta||6.28||5.43||11.82|
Net Interest Income, Operating Profit & Net Profit
Chhimek Laghubitta has earned the highest net interest income, operating profit as well as net profit of Rs. 126.30 crores, Rs 82.60 and Rs. 59.79 crores respectively. Nirdhan Utthan Laghubitta is second to Chhimek with Rs. 117.32 crores, Rs. 74.95 crores and Rs. 47.33 crores in net interest income, operating profit and net profit respectively.
On the other hand, Forward Community has the lowest net interest income and net profit with Rs. 56.21 crores and Rs. 21.76 crores respectively. Likewise, Deprosc Laghubitta has the lowest operating profit of Rs. 26.20 crores.
The table below shows the net interest income, operating profit and net profit of the respective microfinance:
|Microfinance||Net Interest Income(Rs.’crores’)||Operating Profit (Rs. “crores’)||Net Profit(Rs.’crores’)|
|Nirdhan Utthan Laghubitta||117.32||74.95||47.33|
|Forward Community Laghubitta||56.21||34.19||21.76|
NPL & Cost of Funds
Chhimek Laghubitta has the lowest Non Performing Loans (NPL) with 0.41 percent while Deprosc Laghubitta has the highest NPL of 2.58 percent.
Similarly, Nirdhan Utthan Laghubitta has the lowest cost of funds with 8.56 percent while Forward Community Laghubitta has the highest cost of funds with 10.43 percent.
The NPL and cost of funds of the 5 microfinance is presented in the table below:
|Microfinance||Non Performing Loans, NPL(%)||Cost of Funds (%)|
|Nirdhan Utthan Laghubitta||1.76||8.56|
|Forward Community Laghubitta||1.06||10.43|
Earnings Per Share & Net worth Per Share
Forward Community Laghubitta leads others in terms of Earnings Per Share and net-worth per share with Rs. 57.98 and Rs. 278.01 respectively.
Deprosc Laghubitta, on the other hand, has the lowest Earnings Per Share of Rs. 35.04 and the per share net-worth of Rs. 181.95.
The table below presents the Earnings Per Share and Net-worth Per Share of the five microfinance.
|Microfinance||Earnings Per Share, EPS(Rs.)||Networth Per Share ( Rs.)|
|Nirdhan Utthan Laghubitta||42.07||207.79|
|Forward Community Laghubitta||57.98||278.01|
Market Price Per Share & P/E ratio
Forward Community Laghubitta has the highest share price of Rs. 1,380 and P/E ratio of 23.80. Deprosc Laghubitta has the lowest share price of Rs. 759 while Chhimek Laghubitta has lower P/E ratio of 17.97.
The table below shows the share price and p/e ratio of the respective microfinance.
|Microfinance||Market Price Per Share (Rs.)||P/E Ratio|
|Nirdhan Utthan Laghubitta||910||21.63|
|Forward Community Laghubitta||1380||23.80|
Note: The share price, as well as the P/E ratio, is based on the data of Chaitra end, 2076. At current, the numbers may vary.
Top 5 Microfinance of Nepal: Comparative Study
In Summary, the financial comparison of the 5 microfinance is shown in the table below:
|Paid up capital(Rs.’crores’)||150||150||100.54||79.24||50.04|
|Reserve and Surplus(Rs.’ crores’)||161.69||164.31||82.39||131.6||89.08|
|Loans & Advances(Rs.’Arba’)||20.74||20.37||12.07||15.72||11.82|
|Net Interest Income(Rs.’crores’)||117.32||126.3||66.77||81.29||56.21|
|Operating Profit (Rs. “crores’)||74.95||82.6||26.2||48.05||34.19|
|Non Performing Loans, NPL(%)||1.76||0.41||2.58||1.7||1.06|
|Cost of Funds (%)||8.56||9.61||9.89||9.47||10.43|
|Earnings Per Share, EPS(Rs.)||42.07||53.15||35.04||50.95||57.98|
|Networth Per Share ( Rs.)||207.79||209.54||181.95||266.08||278.01|
|Market Price Per Share (Rs.) [Chaitra end, 2076]||910||955||759||1171||1380|
The above figures are based on the un-audited third-quarter report published by the respective company. Investors are advised to take other things into consideration along with this report while making investment decisions. The numbers may vary after the final audit.
Depending on the several indicators which microfinance among the five do you prefer? Feel free to share your views in the comment section.