Samaj Laghubitta's Net Profit Declines Amid High Risk Management Costs

Samaj Laghubitta Bittiya Sanstha Limited (SAMAJ) has recently published its unaudited financial report for the fourth quarter of the fiscal year 2081. The report reveals a significant decline in the microfinance institution's net profit compared to the previous fiscal year.

Key Financial Highlights:

• Net Profit: By the end of fiscal year 2081, the microfinance institution has earned a net profit of NPR 5.13 million, which is a 32.34% decrease compared to the same period last year. Last year's net profit was NPR 7.58 million.

• Net Interest Income: The microfinance institution's net interest income increased by 4.78%, reaching NPR 22.6 million. Although this growth shows some improvement in the institution's income, it hasn't had a significant positive impact on the overall profit.

• Provisions for Potential Risks: The institution has set aside NPR 33.1 million for potential risk management, resulting in a negative operating profit. This expenditure has directly impacted the net profit in a negative way.

• Operating Income: During the review period, the institution's total operating income increased by 2.27%, but other operating income decreased by 3.12%.

• Non-Performing Loans (NPLs): The NPL percentage increased to 4.82%, creating further challenges for the institution's financial position.

Overall:

The microfinance institution has faced a decline in profit in the fourth quarter of fiscal year 2081 due to the need to allocate significant funds for risk management. The modest growth in interest income has not been enough to improve the overall financial situation. Additionally, the drop in earnings per share may negatively affect investor sentiment. In the coming days, the institution will need to adopt further plans and strategies to improve its financial performance.