Press Release

JCR-VIS Reaffirms Entity and PPTFC Ratings of NRSP Microfinance Bank Limited

Karachi, April 28, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of NRSP Microfinance Bank Limited (NRSPB) at ‘A/A-1’ (Single A /A-One). The rating of Privately Placed Term Finance Certificate (PPTFC) has also been reaffirmed at ‘A’ (Single A). Outlook on the assigned ratings is ‘Stable’. The previous rating action on Entity and PPTFC rating was announced on October 29, 2016.

The ratings assigned take into account sound profile of sponsors carrying vast experience in the microfinance sector. Sponsor’s commitment to the bank has been witnessed in the form of both technical knowledge transfer and financial support during the recent years. Moreover, ratings of NRSPB also reflect sound asset quality indicators and improvement in capitalization. In terms of gross advances, NRSPB continues to remain the third largest microfinance bank in the country.

Despite diversification in portfolio during the outgoing year, portfolio depicts product concentration as agricultural lending accounts for almost three-fourth of the total portfolio. In this regard, ratings draw comfort from bank’s experience and satisfactory track record in agriculture financing primarily in rural areas. Going forward, management intends to increase the bank’s customer base by offering high ticket loan products to individuals with satisfactory repayment history. The same will aid in rationalizing product concentration, in addition to enhancing average loan size. Concentration in deposit profile has increased on the back of accumulation of term deposits from institutions. At present, liquidity profile of the bank is supported by presence of sizeable proportion of liquid assets in relation to deposits and borrowings; maintaining adequate liquidity buffer in future is considered important.

Volumetric growth in portfolio has translated into higher profitability during the outgoing year. Meanwhile, the bank also maintains lowest overheads among peer microfinance banks. Capital Adequacy Ratio (CAR) remains above the regulatory requirement and depicts considerable room for growth in risk weighted assets. Going forward, the growing competitive environment in microfinance sector would demand continued implementation of sound credit risk policies along with sustenance of market share.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at 35311861-70 or fax to 35311872.

Javed Callea

Applicable Rating Criteria:
Microfinance Banks (June 2016) (

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2017 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited