NADEP Laghubitta Reports Profit for Q2 FY 2082/83

12th February 2026, Kathmandu

NADEP Laghubitta Bittiya Sanstha Limited has officially released its unaudited financial statements for the second quarter (Q2) of the fiscal year 2082/83. For the period ending Poush 2082, the institution reported a net profit of NPR 37.68 million. This financial update indicates a stable performance trajectory for the “Gh” class national-level microfinance institution, especially considering the ongoing structural and social challenges within the microfinance sector in Nepal.

NADEP Laghubitta Reports Profit

The company, headquartered in Gajuri, Dhading, continues to focus on rural financial inclusion, supported by major promoters like DEPROSC-Nepal, Nabil Bank, and Lumbini Bikas Bank.

Financial Performance and Profitability Highlights

The second quarter results reflect a steady growth in core revenue streams despite a cautious lending environment.

Net Interest Income: For the first half of the year (YTD), the company earned NPR 210.47 million in net interest income. For the second quarter alone, the net interest income stood at NPR 122.58 million.

Net Profit: The cumulative net profit up to Poush 2082 reached NPR 68.24 million, with NPR 37.68 million being generated within the second quarter.

Operating Profit: The institution’s operating profit for the quarter was NPR 45.59 million, showcasing effective management of operating expenses relative to total income.

Fee and Commission Income: A significant boost to the bottom line came from fee-based activities, which totaled NPR 106.34 million for the year-to-date period.

Balance Sheet and Asset Quality

NADEP Laghubitta has maintained a sizeable balance sheet, though it has seen some fluctuations in its deposit and loan portfolios as it maneuvers through liquidity management.

Total Assets: The institution’s total assets grew to NPR 6.84 billion as of Poush 2082, compared to NPR 6.46 billion at the end of the previous fiscal year.

Loans and Advances: Total loans disbursed to customers stood at NPR 5.71 billion. The management has shifted its focus toward securing these loans and prioritizing recovery over aggressive new disbursements.

Deposits: Customer deposits were recorded at NPR 2.82 billion. While this is a slight dip from the previous year-end, it reflects a strategic alignment with the institution’s current lending capacity and cost of funds.

Equity and Reserves: The total equity, including share capital and reserves, has surged to NPR 1.91 billion, providing a significantly stronger capital cushion for the institution.

Key Financial Ratios and Regulatory Compliance

The financial health of NADEP is characterized by strong capital adequacy and improving asset quality metrics.

Capital Adequacy Ratio (CAR): The Capital Fund to Risk Weighted Assets (RWA) remains robust at 17.54 percent (cumulative), which is well above the regulatory threshold set by Nepal Rastra Bank.

Non-Performing Loan (NPL) Ratio: One of the most critical indicators for microfinance institutions, the NPL ratio improved to 5.71 percent this quarter, down from the 6.88 percent reported earlier in the year.

Loan Loss Provision: The institution maintains a very high loan loss provision to NPL ratio of 313.42 percent (YTD), signaling extreme prudence in covering potential credit risks.

Interest Rate Spread: The annualized interest rate spread is quite high at 14.43 percent, though it narrowed significantly to 6.53 percent during the second quarter.

Market Value and Shareholder Metrics

For investors tracking NADEP on the Nepal Stock Exchange (NEPSE), the following metrics are key for valuation:

Earnings Per Share (EPS): The annualized basic EPS is reported at NPR 15.52.

Market Price: Based on recent trading data, the market price per share is approximately NPR 770.00 to 800.00 (the provided “81790” appears to be a clerical error in the source text, likely representing a price closer to the historical range).

Price to Earnings (P/E) Ratio: At a price of NPR 817.90, the P/E ratio stands at 52.71, reflecting investor expectations for future growth.

Net Worth Per Share: With total equity rising, the book value per share remains a strong indicator of the company’s internal worth.

Operational Analysis and Challenges

The management of NADEP has identified several strategic hurdles that have defined this quarter’s operations:

Member Overlap: High competition among microfinance providers has led to some members taking loans from multiple sources, increasing the risk of over-indebtedness.

Social Resistance: Organized protests against microfinance institutions in certain rural areas have impacted recovery efforts and field operations.

Liquidity Management: The bank has focused on internal controls and specialized recovery task forces to ensure that default risks are minimized and liquidity remains stable.

Staff Retention: High turnover in field-level staff continues to be a challenge for maintaining consistent member relationships.

Strategic Outlook and Conclusion

Moving forward, NADEP Laghubitta plans to deepen its digital footprint and improve member-friendly services. The focus for the remainder of FY 2082/83 will be on high-quality loan recovery, strengthening its technology infrastructure, and ensuring the effective use of its Client Protection Fund.

Despite the broader sectoral headwinds, NADEP’s Q2 report demonstrates that disciplined governance and a strong capital base can sustain profitability. The institution’s ability to bring down its NPL ratio and maintain a high provisioning cover suggests a stable path toward long-term sustainability.

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