Lahore, June 28, 2019 (PPI-OT): The ratings of Pakistan Microfinance Investment Company Limited (PMIC) reflect its strong equity base, well-conceived business plan and a strong ownership structure. Pakistan Poverty Alleviation Fund (PPAF), Karandaaz Pakistan – funded by UK’s Department for International Development (DFID) – and KfW, a German government-owned development bank – have contributed to the institution’s capital in addition to providing subordinated loans. PMIC is distinctly positioned as an apex lending institution for the microfinance sector, in addition to its role to develop the sector and facilitate the evolution of the eco-system. PMIC’s target market includes 37 institutions – 26 NBMFIs and 11 MFBs.
Of these, the company has developed relationships with 20 MFIs and the loan portfolio stood at PKR 20bln as of end-Dec’18. The company was able to grow its lending portfolio. To hold asset quality is of utmost importance in the wake of pending risks to the customer universe. Additionally, PMIC is in the process of developing lending relationships with MFBs and has already engaged one MBF. PMIC plans on expanding its microfinance lending portfolio to PKR~28bln by CY19.
The company board has also approved Microfinance Plus initiatives targeted towards agri-value chains, enterprise development, micro-insurance, renewable energy, among others. Several pilot projects are underway. Funding sources comprise of subordinated loans from sponsors, and market borrowings; wherein which expansion is planned. The company’s operations have been designed on efficient lines with a strong control environment. Notable developments in the overall structure and risk environment alongside operational efficiencies are yielding healthy revenues.
The ratings are dependent on the expanding loan portfolio while initiation of the Microfinance plus products, experienced team, the company’s ability to sustain credit quality is considered important; maintaining a strong control environment remains central to the company’s performance and hence the ratings. The sponsor support is a positive for the ratings.
For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com