Press Release

JCR-VIS Maintains Entity Ratings of NRSP Microfinance Bank Limited

Karachi, April 29, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has maintained the entity ratings of NRSP Microfinance Bank Limited (NRSPB) at ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the assigned rating has been revised from ‘Stable’ to ‘Positive’. The previous rating action was announced on April 28, 2015.

The ratings assigned to NRSPB takes into account sound asset quality indicators, growing equity base on account of internal capital generation and increasing market share of the institution. Ratings also place reliance on the strength of the sponsors, their experience and commitment for financial support.

With loans for “Agri inputs” representing around 90% of gross microcredit portfolio, concentration in the lending portfolio continues to remain high. Dominance of bullet repayment structure poses challenges to portfolio risk profile. Comfort, however, can be drawn from the bank’s experience and satisfactory track record in agriculture financing. The bank plans to offer high ticket individual loan products to community organization members with good repayment history. This is expected to increase the average loan size while also rationalizing group vis-à-vis individual lending.

Deposit base witnessed sizeable growth which was more pronounced during the last quarter of FY15. With change in policy, deposits under mandatory savings have reduced on a timeline basis. Concentration in deposit base continues to remain high. Resource base of the bank was supplemented by a subordinated debt for a period of 8 years by KFW, a sponsor.

Markup income posted healthy growth during FY15 on account of volumetric growth in the microcredit portfolio. Meanwhile, lower cost of funding reflected positively on the spreads of the institution while overheads continue to remain lowest among peer microfinance banks.

For further information on this rating announcement, please contact the undersigned (Ext: 501) or Mr. Muhammad Khalid Ali (Ext: 508) at (021) 35311861-70 or fax to (021) 35311872-3

Javed Callea

Applicable Rating Criteria:
Microfinance Institutions (October 2003) (

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 2016 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