Press Release

JCR-VIS Assigns Positive Outlook to Ratings of The First MicroFinance Bank Limited - Pakistan

Karachi, April 29, 2015: JCR-VIS Credit Rating Company Limited has maintained the entity ratings of The First MicroFinance Bank Limited - Pakistan (FMFB-P) at ‘A/A-1’ (Single A/A-One). The previous rating action was announced on April 29, 2014.

The assigned ratings take into account FMFB-P’s association with the Aga Khan Development Network along with presence of international development finance organizations as its sponsors. Outlook on the assigned ratings has been revised from ‘Stable’ to ‘Positive’ in view of the recent decision by Habib Bank Limited to acquire majority shareholding in the bank by way of equity injection of Rs. 2.0b over the next three years; this is expected to significantly strengthen the capital base of the institution; Capital Adequacy Ratio of 24.1% was reported at end-FY14. The equity injection is expected to allow the bank to undertake planned growth in operations while maintaining healthy capitalization.

Deposits have continued to increase at a steady pace and form the primary source of funding; liquidity profile of the institution is considered sound. The overhaul in IT infrastructure, as planned, would allow the institution to offer value added services, which is likely to provide further impetus to deposit mobilization activities.

While being one of the oldest microfinance banks in the country, growth of FMFB-P had remained subdued over the period FY10-11; following the change at the helm and various measures undertaken to strengthen the control infrastructure, pace of growth has picked up lately. Growth was mainly fuelled by products entailing individual lending. The bank has target of doubling the balance sheet size in the next five years; the internal control infrastructure will be tested further at higher operating activity levels. Management envisages continuing product/geographical diversification with focus on individual lending and increasing share of loans involving higher amounts; new loan products for new market segments are also being developed.

For further information on this rating announcement, please contact the undersigned (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 021-35311861-70 (10 lines) or fax to 021-35311873.

Javed Callea

Applicable Rating Criteria:
Microfinance Institutions (October 2003) (

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 2015 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