Sana Kisan, RMDC agree for a merger

Kathmandu, Sept. 17

Sana Kisan Bikas Laghubitta Bittiya Sanstha (SKBBL) and RMDC Laghubitta Bittiya Sanstha – both class 'D' microfinance institutions licensed by the Nepal Rastra Bank – have agreed for a merger.

General meetings of both organisations will be held soon and a unified general meeting will be held by January next year, they said in a joint statement on Saturday. The share swap ratio of Sana Kisan and RMDC for the merger is 100:87.

The new company after merger will be known as Sana Kisan RMDC Laghubitta Bittiya Sanstha.

Khem Bahadur Pathak, Chairman of Sana Kisan, will be the chairman of the integrated company while Shiva Ram Koirala, Chief Executive Officer of the same company, will be the CEO. There will be three people each from both the companies on the board of directors of the new institution. Likewise, one director each will be sent to the board from public shareholders.

The CEO of RMDC will be the Deputy CEO of the integrated company and staff will be managed with mutual agreement.

It will become a strong and capable microfinance institution to provide advanced financial services by making the international, national and local reach, experience and capacity more effective, read the statement. "It will be easier to enter into real competition in the service of the target group," it said.

After the merger, the total assets of the integrated organization will be Rs. 43.22 billion. Total asset of Sana Kisan is Rs. 30.76 billion and RMDC's Rs. 12.46 billion.

Total loan mobilisation of the merged institution would be Rs. 41.86 billion – Rs. 30.2 billion of Sana Kisan and Rs. 11.84 billion of RMDC.

Likewise, total capital of the new company will be Rs. 7.5 billion while paid up capital will be Rs. 2.80 billion, with Rs. 1.56 billion contribution from Sana Kisan and Rs. 1.24 billion from RMDC.

Number of branches will reach 13. There are 11 branches of Sana Kisan and two branches of RMDC.

Both these institutions provide loans to partner institutions. There are 1,309 partner organisations of small farmers and 315 partner organisations of RMDC. After the merger, it will be 1,624.

Sana Kisan's Umesh Lamsal and RMDC's Bhupesh Chatkuli signed for the merger on behalf of their companies.

Speaking on the occasion, Pathak promised to fulfill the hope of the government and people by means of merger.

Sujata Joshi, Chairperson of RMDC, said that the merger will have a synergy effect. It will be easy to provide quality services through a stronger institution, she said. 

Published in The Rising Nepal daily on 18 September 2022.