Grameen Bikas and Samaj Microfinance Merge, Unified Operations to Begin from October 19

14th October 2025, Kathmandu

The Nepali microfinance landscape has witnessed a significant consolidation event with the successful merger of Grameen Bikas Laghubitta Bittiya Sanstha Limited and Samaj Laghubitta Bittiya Sanstha Limited.

Grameen Bikas Merge With Samaj Microfinance

Following the final seal of approval from Nepal Rastra Bank (NRB) on Ashwin 23, 2082 (October 9, 2025), the two ‘D’ class financial institutions are set to begin their integrated operations under the unified name, Grameen Bikas Laghubitta Bittiya Sanstha Limited, starting from Kartik 2, 2082 (October 19, 2025). This strategic merger is anticipated to create a stronger, more efficient entity, capable of expanding its financial services deeper into Nepal’s rural communities.

The Mechanics of the Merger: Swap Ratio and Financial Snapshot

The pivotal element of this merger for shareholders was the definitive 1:1 Share Swap Ratio agreed upon for the amalgamation. This means that for every 100 shares of Samaj Laghubitta held, a shareholder will receive 100 shares of the newly merged Grameen Bikas Laghubitta, ensuring an equal share transfer based on the Due Diligence Audit (DDA) report.

Prior to the merger, both entities presented distinct financial profiles and market valuations:

Grameen Bikas Laghubitta (GBLBS): As a substantially larger microfinance institution (MFI), GBLBS boasted a robust Paid-Up Capital of Rs. 98.25 Crores. Its unaudited financial statement for the fourth quarter of FY 081/082 indicated a significant operational scale, with total assets exceeding Rs. 13 billion. The Earnings Per Share (EPS) for GBLBS was reported at Rs. 32.01, and the Book Value stood at Rs. 293.35 as of the end of the last fiscal year. The market price for GBLBS on the last trading day prior to this news was approximately Rs. 712.00 (as of October 12, 2025).

Samaj Laghubitta (SAMAJ): Operating on a smaller scale, SAMAJ had a Paid-Up Capital of Rs. 2.28 Crores. Despite its smaller size, SAMAJ demonstrated strong financial health in some key areas, reporting an impressive EPS of Rs. 62.10 and a Book Value of Rs. 258.84 for the fourth quarter of FY 081/082. The market price of SAMAJ was significantly higher, recorded at approximately Rs. 2,670.00 (as of September 24, 2025), reflecting its high per-share earnings before the merger news fully integrated into the price.

Projected Strength of the Unified Entity

The consolidation of GBLBS and SAMAJ results in a substantially larger microfinance institution, which will be a more formidable force in Nepal’s microfinance sector.

Enhanced Capital Base: The total Paid-Up Capital of the merged entity, Grameen Bikas Laghubitta Bittiya Sanstha Limited, will effectively combine the capital of both institutions, resulting in a new paid-up capital of approximately Rs. 100.53 Crores (Rs. 98.25 Crores + Rs. 2.28 Crores). This enhanced capital strength is crucial for expanding the loan portfolio and complying with regulatory capital requirements set by the central bank.

Expanded Operational Footprint: The merger combines the extensive branch network of GBLBS with SAMAJ’s existing branch offices. Prior to the merger, GBLBS was already a substantial player with an expansive network spread across multiple provinces and operational supervision offices in regions like Biratnagar, Janakpurdham, Butwal, Nepalgunj, and Dhanagadhi. SAMAJ, primarily based in the Terai region with its head office in Malangwa, Sarlahi, also contributed its network, including its five branches and outreach across three working districts, along with its base of approximately 7,200 members. The unified entity will now leverage this expanded geographical reach, with the head office strategically maintained in Butwal, Rupandehi. The combined presence will significantly enhance the institution’s ability to serve a larger number of clients in remote and deprived sectors.

Streamlined Operations: The temporary closure of transactions on Kartik 1 is a critical step in the merger, designated for the essential task of system integration. This closure allows for the successful alignment of data and the consolidation of all banking operations onto a single software platform, which is key to ensuring seamless and efficient service delivery once joint operations begin. This operational streamlining is a primary driver of the merger’s expected efficiency gains.

Broader Implications and Sector Benefits

The merger of Grameen Bikas and Samaj Laghubitta is not an isolated event but a reflection of the larger trend in Nepal’s microfinance sector, driven by the central bank’s push for consolidation to address critical industry challenges.

Mitigating Over-Indebtedness: One of the most significant benefits anticipated from such mergers is the reduction of multiple borrowing—where clients take loans from several MFIs simultaneously. Research indicates that mergers and acquisitions can be an effective tool in addressing this anomaly, thereby improving financial stability and sustainability for both the MFI and the client. A larger, more centralized institution often leads to better credit information management and more responsible lending practices.

Improving Operational Efficiency and Competitiveness: The Nepalese microfinance sector is characterized by an oversupply of institutions in certain geographical areas, leading to unhealthy competition and higher operational costs. By merging, the new entity can realize significant economies of scale. This allows for the rationalization of duplicate branches, better deployment of technological resources, and a reduction in overall operating expenses, ultimately positioning the institution to offer more competitive and sustainable services to the poor.

Strengthening Financial Resilience: A stronger capital base and larger reserve fund provide a greater buffer against potential financial shocks, such as high rates of loan delinquency or unforeseen economic downturns. This improved resilience is vital for the long-term mission of poverty alleviation and financial inclusion that microfinance institutions are chartered to fulfill. The combined expertise and resources of the merged entity will allow for more innovative product development and a stronger focus on the social objectives of microfinance, particularly in enhancing women’s empowerment, which is a core mission of both former institutions.

The transition to unified operations under Grameen Bikas Laghubitta Bittiya Sanstha Limited on Kartik 2, 2082, marks a strategic step towards a more robust and streamlined microfinance sector in Nepal, promising greater outreach and enhanced service quality for the rural populace.

For More: Grameen Bikas Merge With Samaj Microfinance