WEAN Nepal and Swarojgar Laghubitta to Merge, MoU Signing Completed

26th December 2025, Kathmandu

In a significant move toward consolidation within the microfinance sector of Nepal, Wean Nepal Laghubitta Bittiya Sanstha Limited and Swarojgar Laghubitta Bittiya Sanstha Limited have officially decided to merge. This strategic decision was formalized through the signing of a Memorandum of Understanding on Poush 9, 2082.

WEAN and Swarojgar Merger

The merger reflects the ongoing trend in the Nepalese financial landscape where smaller institutions are joining forces to create larger, more resilient entities capable of navigating regulatory challenges and expanding their market reach. As the central bank, Nepal Rastra Bank, continues to encourage mergers and acquisitions among microfinance institutions to ensure stability and reduce operating costs, this latest agreement marks a key milestone for both organizations.

THE FORMALIZATION OF THE MERGER PROCESS

The initial step toward this unification took place in Kathmandu, where the leadership of both institutions met to finalize the terms of the Memorandum of Understanding. By signing this document, Wean Nepal and Swarojgar Laghubitta have committed to a joint process that involves evaluating their respective assets and liabilities through a Due Diligence Audit. This audit will eventually determine the share swap ratio, which is a crucial factor for the shareholders of both companies. The merger process is expected to take several months as it requires approvals from the respective annual general meetings, the Securities Board of Nepal, and ultimately the final consent from the central bank.

GEOGRAPHICAL PROXIMITY AND OPERATIONAL SYNERGY

An interesting aspect of this merger is the geographical proximity of the two institutions. Wean Nepal Laghubitta Bittiya Sanstha Limited maintains its central office in Banepa–13, Kavrepalanchok. Similarly, Swarojgar Laghubitta Bittiya Sanstha Limited has its headquarters located in Banepa–5. Being based in the same municipality of Kavrepalanchok allows for significant operational synergy. The proximity of their central administrative functions will likely make the integration of human resources, information technology systems, and corporate cultures much smoother compared to institutions located in different regions. This proximity also suggests a shared understanding of the local market and customer base in the Kavrepalanchok district and surrounding areas.

Advertisement

STRENGTHENING THE CAPITAL BASE AND FINANCIAL STABILITY

One of the primary motivations for this merger is the requirement to strengthen the capital base of the combined entity. In the current economic climate of Nepal, microfinance institutions are facing pressure from rising non-performing loans and the need for higher provisioning. By merging, Wean Nepal and Swarojgar Laghubitta can pool their resources to improve their capital adequacy ratio and liquidity position. A larger capital base will also allow the merged institution to borrow more effectively from commercial banks and expand its lending portfolio to small scale entrepreneurs and rural farmers who rely on microcredit for their livelihoods.

IMPACT ON SHAREHOLDERS AND THE STOCK MARKET

The announcement of the merger has been a point of interest for investors on the Nepal Stock Exchange. Traditionally, when two microfinance companies announce a merger, their stock trading is monitored closely. Following the signing of the Memorandum of Understanding, the process of suspending or restricting trading may be initiated as per the prevailing regulations to prevent insider trading and ensure market transparency. Shareholders are looking forward to the final share swap ratio, as a fair valuation will be critical for the long term value of their investment in the new, larger entity. The successful integration of these two companies could potentially lead to better dividend prospects in the future due to improved efficiency and scale.

FOCUS ON RURAL EMPOWERMENT AND SELF EMPLOYMENT

Both Wean Nepal and Swarojgar Laghubitta have historically focused on the core mission of microfinance, which is the promotion of self employment and poverty reduction. Swarojgar, which literally translates to self employment, has a strong identity tied to fostering entrepreneurship at the grassroots level. By joining forces with Wean Nepal, the combined institution will have a larger network of branches and field staff to reach underserved populations. This expanded reach is essential for providing not just credit, but also financial literacy and business training to women and marginalized groups across Nepal. The merger is expected to enhance the social impact of their operations while maintaining financial sustainability.

CONCLUSION AND NEXT STEPS TOWARD UNIFICATION

In conclusion, the merger between Wean Nepal Laghubitta and Swarojgar Laghubitta represents a proactive response to the changing regulatory and economic environment in Nepal. By consolidating their operations in Banepa and beyond, the two institutions are setting the stage for a more robust and efficient future. The next few months will be critical as they move through the legal and technical phases of the merger, including the appointment of a joint merger committee and the completion of the Due Diligence Audit. This move is a clear indicator that the microfinance sector is entering a phase of maturity where scale and stability are prioritized over the sheer number of individual players.

For More: WEAN and Swarojgar Merger