25th September 2025, Kathmandu
Gurans Laghubitta Bittiya Sanstha Limited, a prominent microfinance institution in Nepal, has announced a total dividend of 15 percent for its shareholders for the fiscal year 2081/82 (2024/25).
Gurans Laghubitta Announces Dividend
The decision was made by the company’s board of directors during a meeting held on Ashwin 8, 2082 (September 24, 2025). This dividend declaration is a testament to the institution’s solid financial performance and its commitment to rewarding investors while strengthening its capital base. The Nepalese microfinance sector has shown considerable resilience despite broader economic challenges, and Gurans Laghubitta’s ability to maintain a consistent dividend history reflects this strength.
Dividend Breakdown and Financial Implications
The proposed dividend is structured as a combination of bonus shares and a cash component, a common practice among Nepalese companies to optimize shareholder value and manage capital. The breakdown of the 15 percent dividend is as follows:
14.25 percent Bonus Shares: The majority of the dividend will be distributed as bonus shares, equivalent to approximately NPR 16.5 million. This issuance will increase the company’s paid-up capital, which currently stands at NPR 115.8 million, to NPR 132.3 million. Bonus shares are a strategic way for a company to reward shareholders by giving them additional shares without having to spend cash, thus retaining funds for future growth and operational expansion. This is particularly important for financial institutions like Gurans Laghubitta, which need to maintain a strong capital base to support their lending activities and meet regulatory requirements.
0.75 percent Cash Dividend: A smaller cash dividend of approximately NPR 868,871.25 has also been proposed. This cash payout is specifically allocated to cover the tax obligations that shareholders incur on the bonus share distribution. This is a shareholder-friendly policy that ensures investors can benefit from the bonus shares without having to bear an immediate financial burden for the associated taxes.
Navigating Regulatory Requirements and Investor Eligibility
Before the dividend can be distributed, the proposal must undergo a two-step approval process. Firstly, it requires clearance from the Nepal Rastra Bank (NRB), the central bank that regulates all banks and financial institutions (BFIs) in the country. The NRB has recently tightened its dividend approval procedures, linking it directly to the company’s capital adequacy and non-performing loan (NPL) ratios. According to recent directives from the NRB, microfinance institutions with a capital adequacy ratio between 8% and 10% and an NPL ratio below 5% can distribute up to a 15% dividend. With Gurans Laghubitta’s strong performance, it is likely to meet these requirements.
Following the NRB’s approval, the dividend proposal will be presented for final ratification at the company’s upcoming Annual General Meeting (AGM). The date for the AGM and the official book closure period have yet to be announced. It is critical for investors to pay close attention to the book closure date. Only those shareholders who are on the company’s register by the end of the trading day preceding the book closure will be eligible to receive the dividend. The concept of book closure is the mechanism used to determine who is entitled to a company’s corporate actions, such as dividends and voting rights.
Gurans Laghubitta’s Strategic Outlook
Gurans Laghubitta operates as a “D” class financial institution, providing crucial financial services to underserved rural communities across Koshi Province. Its mission is to promote entrepreneurship and improve the living standards of socio-economically marginalized populations through small loans, savings products, and financial literacy programs. The company’s financial performance for the fourth quarter of the fiscal year 2081/82 was particularly strong, with a nearly 90% surge in net profit and a significant increase in Earnings per Share (EPS) to NPR 34.17, which validates the board’s decision to propose a generous dividend.
The dividend announcement sends a positive signal to the market, indicating the company’s financial health and management’s confidence in its future. Issuing bonus shares strengthens the company’s equity base, which is vital for sustained growth and for meeting the central bank’s capital requirements. The company’s ability to consistently generate profits and return value to shareholders highlights a well-managed business model that is both resilient and adaptable to the evolving microfinance landscape in Nepal. This also improves market liquidity by increasing the number of shares in circulation.
Investors will be watching for the upcoming book closure date and the final approvals from the NRB and the AGM, as these steps will confirm the dividend distribution and provide clarity on the company’s path forward.
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