Swarojgar Laghubitta Proposes 15 Percent Dividend

21st December 2025, Kathmandu

Swarojgar Laghubitta Bittiya Sanstha Limited has officially announced a 15 percent dividend proposal for its shareholders, following a successful performance in the fiscal year 2081/82. The decision was formalized during the 297th meeting of the Board of Directors held on Poush 4, 2082. This announcement is a key milestone for the microfinance institution, which continues to focus on self-employment generation and rural economic empowerment. As a class D financial institution licensed by Nepal Rastra Bank, Swarojgar Laghubitta has established itself as a resilient player in the microfinance sector, particularly in the Kavrepalanchok district where its head office is located.

Swarojgar Laghubitta Proposes Dividend

The proposed dividend is based on the current paid up capital of the company, which stands at 783.92 million Nepalese rupees. At a total rate of 15 percent, the dividend is valued at approximately 117.5 million rupees. This distribution is a clear signal of the financial health of the company and its ability to generate distributable profit despite the broader economic shifts affecting the microfinance industry in Nepal.

Breakdown of the Dividend Components

The dividend proposal is structured into two distinct parts to balance capital growth with shareholder liquidity. The majority of the dividend is proposed in the form of bonus shares, while a small portion is allocated as a cash dividend to cover tax requirements.

Bonus Shares: The board has proposed a 14.25 percent bonus share issuance. This amounts to approximately 111.7 million rupees. By issuing bonus shares, the company increases its paid up capital, which strengthens its internal reserves and enhances its capacity for future lending. For shareholders, this means they will receive additional shares proportional to their current holdings, increasing their total number of units in the company.

Cash Dividend: A 0.75 percent cash dividend has been proposed, primarily for tax purposes. This amounts to approximately 5.87 million rupees. In Nepal, when bonus shares are distributed, a tax of 5 percent is applicable on the total dividend value. The cash component is designed to ensure that shareholders do not have to pay this tax out of their own pockets, making the dividend process more convenient for retail investors.

Approval and Endorsement Procedure

It is important for investors to understand that the announcement by the Board of Directors is the initial step in the distribution process. The proposed 15 percent dividend must undergo two critical stages of approval before it can be credited to the accounts of the shareholders.

First, the company must submit its financial statements and the dividend proposal to Nepal Rastra Bank (NRB) for review. The central bank evaluates the capital adequacy and the overall financial stability of the microfinance institution to ensure it can sustain the payout while maintaining healthy reserves. Following the approval from NRB, the proposal will be tabled as a primary agenda item during the upcoming Annual General Meeting (AGM) of the company. Once the shareholders provide their final endorsement at the AGM, the company will announce a book closure date, after which the bonus shares and cash will be distributed to eligible investors.

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Financial Performance and Operational Growth

The dividend proposal follows a strong start to the current fiscal year. According to the first quarter report for the fiscal year 2082 2083, Swarojgar Laghubitta reported a net profit of over 50.6 million rupees, representing a growth of more than 37 percent compared to the same period in the previous year. The earnings per share (EPS) for the institution reached a healthy level of 25.84 rupees on an annualized basis, while the net worth per share stood at approximately 165.96 rupees.

The institution has successfully managed its assets, with a total loan portfolio reaching over 9 billion rupees. Serving over 129,000 clients through its network of 91 branches, the bank has remained committed to its mission of uplifting the socio-economic status of poor and backward communities. Its focus on female group members and small scale entrepreneurship has helped it maintain a stable source of revenue even during times of market volatility.

Market Context for Microfinance Dividends

In 2025, the microfinance sector in Nepal has seen a shift in regulatory focus. Nepal Rastra Bank has been reviewing dividend distribution arrangements, particularly for institutions proposing payouts above 15 percent. By keeping the proposal at exactly 15 percent, Swarojgar Laghubitta aligns itself with the preferred regulatory guidelines while still offering a competitive return to its investors. Many microfinance institutions have faced challenges with non-performing loans (NPL) recently, but the performance of Swarojgar indicates a robust recovery and efficient credit management.

For the general public, the 15 percent dividend is an attractive prospect compared to the current interest rates on fixed deposits. As a sector that is vital for rural development, microfinance stocks are often seen as high-impact investments. The combination of bonus shares and cash ensures that the company stays well capitalized for the next phase of its journey, which may include further digital expansion and reaching deeper into the unbanked regions of Nepal.

Conclusion and Next Steps for Shareholders

In conclusion, the 15 percent dividend proposal from Swarojgar Laghubitta Bittiya Sanstha Limited reflects a period of stability and growth for the institution. With a clear 14.25 percent bonus share component and a necessary cash portion for tax, the company is rewarding its investors while building a stronger financial foundation for the future. Shareholders should stay informed about the upcoming book closure date and ensure their Demat accounts and bank details are correctly updated in the Mero Share system.

The transition toward the 2082 2083 fiscal year looks promising for the company, and the endorsement of this dividend at the next Annual General Meeting will mark a successful close to the previous year financial cycle.

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