Due to liquidity crunch, and rise on interest rates, we can expect that micro finances will also face higher cost of funds. However, they are still limited to 15% max lending rates to public. Thus lower profit. However, some microfinance prices have fallen very hard. So what are your views on micros on current scenario?

More at: r/NepalStock by roshamns

  1. What difference does it make if micros continue to grow and remain profitable? In the short term, prices may fall. On a longer run, if MFIs continue to grow, I don’t see it making a big difference.

    Either way, banks will re-invest the capital gained in some way or the other.

  2. Microfinance had been a darling of kheladis due to their low cap but it would be interesting to watch how things will play out in coming months when banks won’t be able to invest in microfinances at least directly.

  3. For me staying away from micro finance scripts make more sense unless you are prepared to hold for at least a few years. NRB is putting a lot of pressure on MF to go for merger and we simply don’t know which MF will go for merger and for how long. One of my script from MF has been in merger process for more than 2 years now. ????

  4. There was a policy implemented months(don’t remember fully) back that bank must sell microfinance share within this year if they hold any, cause microfinance is also financial sector.

    I forgot the exact description but it was roughly like that. I believe that was during budget.

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