Press Release

JCR-VIS Reaffirms Entity Ratings of Kashf Foundation with a Stable Outlook

Karachi, January 07, 2014: JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Kashf Foundation (KF) at ‘BBB/A-3’ (Triple B/A-Three). The ‘Rating Watch-Developing’ status has been removed. Outlook on the assigned rating is now ‘Stable’.

Over the last three years, KF has re-built a sizeable performing portfolio by streamlining its lending methodology and instituting various checks during the pre and post disbursement stage. Previously classified loans have been fully provided while the quality of the current portfolio, built in recent years, remains sound. Given the current loss absorption capacity, maintaining asset quality indicators while pursuing growth objectives, is considered critical.

Higher microcredit loan portfolio enhanced KF’s income generating capacity and net markup income increased during the period, while spreads were maintained. Given that the entire balance sheet is funded by borrowings, reducing the time lag between mobilization of funding and deployment in loan portfolio may facilitate in further enhancement of earnings. At the same time, current liquidity level may be desirable, given the balance sheet composition.

While having declined on a timeline basis, overheads remain high. To an extent, high overheads may be characteristic of the segment in which the institution operates. There is nevertheless room for improvement. In order to enhance operational efficiency, KF plans to introduce internal business process improvements, identify niche markets and pursue competence development of field staff.

Over the years, KF has emerged as a national level program with presence in all four provinces of the country while further penetration is planned during the ongoing year in Khyber Pakhtunkhwa province. In addition to core financing activities, the organization continues to provide non-financial services, in the form of financial literacy trainings, etc. which are funded by grants.

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

Javed Callea

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-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. JCR-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. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-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 2014 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited