Press Release

JCR-VIS reaffirms ratings of The First MicroFinance Bank Limited

Karachi, April 25, 2007: JCR-VIS Credit Rating Company Limited has reaffirmed the medium to long- term ratings of The First MicroFinance Bank Limited (FMFB) at ‘A+’ (Single A Plus) and short-term ratings at ‘A-1+’ (A-One Plus). Outlook on the rating has remained ‘Stable’.

The rating agency has noted the significant improvement in FMFB’s core business volume which has surpassed initially projected levels. The bank has been able to maintain a sound quality loan book so far. Adequate control infrastructure with regular upgrades in systems deployed has facilitated the bank’s rapid, recent growth.

Liquidity levels are still substantial with an almost 90% coverage against deposits and borrowings, however going forward, liquidity levels are likely to drop as the financing portfolio continues to grow. While the nature and quality of the bank’s core asset and the developing nature of its deposit base are likely to assure liquidity levels commensurate with an A-1+ rating in the near-term, JCR-VIS will keenly monitor emerging trends over the next few months.

While surplus liquidity was available to fund growth in the micro-loan portfolio, fresh deposit mobilization has increased the bank’s resource base. The deposit taking branches of the bank, are projected to double in 2007 and all branches have been authorized to mobilize funds with the objective of attracting retail deposits. Initial response is positive with branches in the rural areas also contributing to deposit growth.

FMFB has a strong capital base which gives the bank significant loss absorption capacity. Further capital infusion is budgeted for FY2009. The bank also generates sizeable spreads which have increased during the year and efficiency indicators have also improved during FY2006.

Ratings also incorporate the impact of the franchise and support of key sponsors namely Aga Khan Agency for Microfinance and International Finance Corporation.

For further information on this rating announcement, please contact Mr. Safdar Kazi (Ext: 208) or Ms. Sabeen Saleem (Ext: 206) at 5311861-72 or fax to 5311873.

Faheem Ahmad
President & CEO

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 2007 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