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Nirdhan Utthan & Deprosc scores among the top; See how much other national level microfinance scores

- ShareSansar, March 7, 2017  on Company Analysis , Exclusive , Featured , Financial Analysis , Latest , Stock Market
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ShareSansar has ranked the currently traded national level micro finance companies on the basis of their second quarter reports of 2073/74. They were scored in terms of the value and their growth. We have analyzed the companies on the basis of their fundamentals such as Paid up Capital, Reserves, Borrowings, Loans and Advances, Net Interest Income, Staff Expenses, Provisions, Operating and Net Profits, NPL and EPS.

There are a total of 21 national level microfinance companies operating in Nepal. Out of these, 17 are currently traded in NEPSE, 3 among them have not been listed yet and 1 (Forward Community Microfinance) recently floated IPO.

According to our analysis, 7 companies stand out from the rest:  Nirdhan Utthan Bank Ltd., Forward Microfinance, Deprosc Development Bank Limited, Swabalamban Laghubitta Bikas Bank Ltd., National Microfinance, Sana Kisan Bikas Bank Ltd. and Chhimek Microfinance Development Bank Ltd. have performed above average on major indices. The score was given by analyzing both the value and growth in the major parameters.

How the score was calculated

Weights were assigned to the above mentioned 11 parameters. The companies having the value more than the industry were given the score as assigned to the parameters. Again, the process was repeated in terms of growth. The companies having growth more than the industry average were assigned with the scores. The resulting values were then weighted and compared with a final score out of 10.

score-out-of-10

Nirdhan Utthan Bank Limited has scored the highest with a total of 8.26 out of 10.  First Microfinance and Mahila Sahayatra have the least with a score of 1.30 and 1.09 respectively. The average score of the national level microfinances was only 4.09 out of 10.  Forward Microfinance who recently floated an IPO stands in the 2nd position. Deprosc Development Bank and Swabalamban Bikas Bank were in the 3rd and 4th position respectively.

 score-all

 

Performance on major indicators

 

NET PROFIT

net-profit

 

Of the total profit of the national level microfinances, 80.25% has been earned by the top 7 companies with just 19.75% earned by the remaining 10. All the national level microfinances are in profit as of 2nd quarter. Nirdhan Utthan has posted the highest net profit as of Q2 with a profit of Rs.30.13 crores and ILFCO Microfinance has the lowest net profit with Rs.33.71 lakhs earned. Whereas in terms of growth, National Microfinance, Nirdhan Utthan have made it to the top. They have shown a growth of 172.84% and 113.25% respectively.

Earnings per Share

 EPS

 

8 companies have the EPS above average. The Industrial EPS stands at Rs 59.63. Three companies EPS stand above Rs.100, five have an EPS between Rs.60 and Rs.100 and the remaining 9 companies EPS below Rs.60. ILFCO Microfinance has the lowest EPS of Rs 6.74.

 

Net Worth

net worth per share

 

The average net worth per share of these companies stands at Rs.203.3. All the companies have their networth above Rs.100. Forward Microfinance has the highest net worth per share of Rs.454.21 then followed by Deprosc Laghubitta with a Net worth of Rs 328.96. ILFCO Microfinance has the lowest Net worth of Rs 107.13. Seven companies have a Net Worth more than the Industry.

 

Staff Expenses

staff expenses

 

In the review period, it was seen that the staff expense of the industry was Rs 8.17 crore.  The staff expenses of 6 companies were found to be more than the average. Nirdhan Utthan bank had the highest expense, whereas RSDC Microfinance had the lowest.

In this review period, the staff expense of Vijaya Laghubitta has increased by a massive 85.48%. Sana Kisan Bank’s staff expenses increased by 13.29% only.

 

Borrowing

borrowing

 

Increase in borrowing increases a company’s strength to extend loans. Higher the amount of borrowing, higher will be the company’s ability to disburse loans.

The borrowing of the Industry surged by 35.86% in the review period. The borrowing of ILFCO Microfinance expanded by 100.07% whereas the same of Rural Microfinance (RMDC) rises by merely 8.04% only. In terms of value, Sana Kisan Bikas Bank had the highest borrowing of Rs 10.53 arba. It was followed by Nirdhan Utthan bank (NUBL) with a borrowing of Rs 6.70 arba.

LOANS AND ADVANCES

In terms of increase in loan and advances, Vijaya Laghubitta made it to the top with an increase of 107.17%. The industrial loans and advances surged by 54.64%. 7 companies did it better than the industry. In terms of value, Sana Kisan Bikas Bank extended the highest amount of loans and advances with a total loan disbursement of Rs 12.45 arba. The industry, on an average, extended a loan of Rs 4.55 arba.

Loans

 

Non- Performing loan

A non-performing loan is any loan that can reasonably be expected to enter default. Often, if the loan isn’t already in default, the borrower has failed to make a number of payments within a specified period. Most commonly, no payments have been made within 90 days, though a loan can still qualify even if that time has not yet elapsed.

In case of Nepalese microfinance industry, Nepal Grameen Bikas Bank has the highest Non-performing loan of 4.29%. Whereas, companies such as First microfinance, Rural Microfinance and RSDC have a NPL of zero. Most of the companies have successfully decreased their NPL, as compared to last year.
non-performimg-loan
Paid up Capital

In terms of paid up capital, National level microfinance companies have an average paid-up capital of Rs 32.11 crore. Chhimek laghubitta has the highest paid-up capital of Rs. 83.40 crore. Followed by  Rural microfinance with Rs. 69.21 crore. 6 companies have a paid up capital more than the industry. Laxmi Laghubitta has increased its capital by 100% in the period of 1 year. 4 companies have a stagnant capital.

paid-up-captial

 

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