Press Release

JCR-VIS Assigns Positive Outlook to Entity Ratings of NRSP Microfinance Bank Limited

Karachi, April 30, 2013: JCR-VIS Credit Rating Company Limited (JCR-VIS) has maintained the entity ratings of NRSP Microfinance Bank Limited (NRSPB) at ‘BBB+/A-3’ (Triple B Plus/ A-Three). Outlook on the assigned rating has been revised from ‘Stable’ to ‘Positive’.

During the first full year of operations, NRSPB enhanced its outreach in the existing districts by leveraging on the strong client base of National Rural Support Program (NRSP), also the major shareholder of the bank. Lending portfolio of the bank showcased considerable growth; agriculture financing using group lending methodology remains the forte of the bank. Disbursements of the bank are highly seasonal and are linked to the crop cycle. Branches are mainly located in southern Punjab and upper Sindh. The bank has taken steps to expand its outreach in urban cities, including Karachi and Lahore.

Following State bank of Pakistan’s approval to generate deposits other than mandatory savings, the bank’s deposit base increased considerably in FY12. However, with deposits constituting around one-third of overall funding at end-March, 13, funding arrangements of the bank are primarily reliant on commercial borrowings. With current funding mix, cost of funds may persist on the higher side.

Profitability indicators of the bank improved during FY12 on the back of improved return on mark-up bearing assets, which allowed the bank to absorb the impact of higher overheads. Positive trend in profitability may continue if the bank is able to maintain overheads within prudent levels and keep portfolio quality intact.

The bank witnessed turnover in the top management team. All key positions are now occupied with suitable candidates replacing the out-going personnel. Given that the bank is in a rapid expansion mode, stability in the core team is critical to achieve the strategic blueprint laid down for the organization. The bank has implemented Flexcube as core banking solution across the branch network.

For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA ( or Mr. Maimoon Rasheed ( at 021-35311861-70 and 042-36610681-84 or fax to 021-35311873.

Jamal Abbas Zaidi
Deputy CEO

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 2013 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