Nepal Rastra Bank has published a circular stating D class microfinance need to establish Client Protection Fund. This provision will be in effect from the current fiscal year.
As per the directive, Microfinance needs to maintain client protection fund where
- they need to deposit at least 1% of their net profit in that fund
- The microfinances proposing more than 20% dividend (cash and/or bonus) is required to deposit 25% of dividend above 20% in Client Protection Fund.
ShareSansar queried to some Experts of Market regarding the effect of this provision brought by Nepal Rastra Bank in the share prices of microfinance ?
These are the views of our experts:
Bishnu Tripathi
Investor
The income of micro finances is good. Nepal Ratra Bank (NRB) is also coming out with capital plan for microfinance sector. I don’t think there will be negative impact in the share prices of microfinance as earning power of microfinance is high.
Jeevan Prasai
Sumeru Securities Private Limited Broker Number 39
There might be some affect but no such high fluctuation will be seen in the prices of shares of microfinance. The prices of scrips depend on demand and supply, performance of the organization and attraction towards that sector.
Even the provision brought by Nepal Rastra Bank (NRB) will make the company strong so I don’t see any negative impact in the share prices of microfinance. After circular was out, the share price of microfinance increased instead of decreasing.
Binod Rimal
Nepal Stock House Private Limited, Broker Number 14
In my opinion, there won’t be any decrement in the share prices of microfinance. The provision brought by Nepal Rastra Bank is good for the growth of the companies. The provision brought will make the business of microfinance better.
Instead of decreasing, the share prices of microfinance might rise as the first quarter report of microfinance are really good and even better than corresponding quarter of last fiscal year.
