PMR

Editorial Board
Mr. Mudassar Aqil Mr. Noor Ahmed Mr. Aqeel Ahmed Zeeshan
Chairperson - PMR Board Member - PMR Board Member - PMR
President Head of Department – Agricultural Credit Additional Director - Specialized Companies Division,
Telenor Microfinance & Microfinance Department (AC&MFD) Policy, Regulation and Development Department (PRDD)
Bank Limited (TMFB) State Bank of Pakistan (SBP) Securities & Exchange Commission of Pakistan (SECP)

Mr. Greg Chen Ms. Mehr Shah Mr. Masood Safdar Gill
Board Member - PMR Board Member - PMR Board Member - PMR
Policy Lead Director – Knowledge Management Director Programme – Urban Poverty
Consultative Group to & Communications Alleviation Programme
Assist the Poor (CGAP) Karandaaz Pakistan (KRN) National Rural Support Programme (NRSP)

Mr. Shahzad Shahid Mr. Saqib Siddiqui

Board Member - PMR Board Member - PMR
Chief Executive Officer Head of Sector Development
TPS Worldwide Pakistan Microfinance Investment Company (PMIC)

PMR
TEAM
Mr. Ali Basharat Mr. Abdullah Saeed
Head of Operations - PMN Financial Analyst - PMN
Managing Editor Data Collection, Analyst & Author
Abbreviations
API Application Performing Interface
SECP Securities and Exchange Commission of Pakistan
SBP State Bank of Pakistan
PMIC Pakistan Microfinance Investment Company Ltd
PMRC Pakistan Mortgage Refinancing Company Ltd
SME Small and Medium Enterprise
NBMFC Non-Banking Microfinance Company
MFP Microfinance Provider
MFI Microfinance Institution
MFB Microfinance Bank
KYC Know Your Customer
CDD Customer Due Diligence
AML Anti-Money Laundering
CFT Counter Terrorist Financing
ICAP Institute of Chartered Accountants of Pakistan
FLGF First-Loss Guarantee Facility
PPTFC Private Placed Term Finance Certificate
MFCG Microfinance Credit Guarantee
OSS Operational Self Sufficiency
FSS Financial Self Sufficiency
PAR Portfolio at Risk
CAR Capital Adequacy Ratio
MoF Ministry of Finance
A2F Access to Finance
GoP Government of Pakistan
Highlights
YEAR 2021 2020 2019 2018 2017
Active 8.0 7.0 7.4 6.7 5.5
Borrowers (in
millions) 372 319 302 256 196
Gross Loan
Portfolio
(PKR billions) 3.5 3.4 3.8 3.5 2.7
Active Women
Borrowers
(in millions) 3,667 3,722 3,802 4,102 3,533
Branches 41,384 44,57 46,163 42,048 36,053
Total Staff 704 3 493 427 330
Total Assets 617
(PKR billions) 401 266 239 186
Deposits 373
(PKR billions) 163 105 90 74
Total Debt 117
(PKR billions) 123 111 89 66
Total Revenue 111
(PKR billions) 97 97 119 125
OSS 100
(percentage) 95 95 109 122
FSS 99
(percentage) 4.8 3.9 1.6 0.5
PAR > 30 3.2
(percentage)
Table of
Contents
SECTION 1: THE YEAR IN REVIEW 1
MACRO-ECONOMY & THE MICROFINANCE INDUSTRY 2
POLICY AND REGULATORY REVIEW 6
REGULATORY RELIEF BY SBP FOR MFBS 6
NEW REGULATORY REQUIREMENTS FOR NBMFCS 6
INDUSTRY INITIATIVES 8
MICROFINANCE INDUSTRY & AFFORDABLE HOUSING 9
BANKING ON EQUALITY 10
CONCLUSION 11

SECTION 2: FINANCIAL PERFORMANCE REVIEW 12

SCALE & OUTREACH 13
BREADTH 13
DEPTH 20
FINANCIAL STRUCTURE 23
PROFITABILITY & SUSTAINABILITY 25
PRODUCTIVITY 29
CREDIT RISK 30

SECTION 3: SOCIAL PERFORMANCE REVIEW 32

ANALYSIS OF THE SECTOR’S SOCIAL PERFORMANCE INDICATORS 32
SOCIAL GOALS 33
TARGET MARKET 33
DEVELOPMENT GOALS 33
POVERTY TARGETING 34
POVERTY MEASUREMENT TOOLS 34
GOVERNANCE AND HR 35
PRODUCTS AND SERVICES: FINANCIAL 33
CREDIT 33
DEPOSITS 34
INSURANCE 34
OTHER FINANCIAL SERVICES OFFERED 35
PRODUCTS AND SERVICES: NON-FINANCIAL 36
TRANSPARENCY OF COST 36
CLIENT PROTECTION (CP) 37
ENVIRONMENTAL POLICIES 38
3.4 CONCLUSION 39

SECTION 4: THE WAY FORWARD 40

NANO LENDING IN PAKISTAN 40
MICROFINANCE IN POST-COVID ERA 40
DIGITAL BANKING IN PAKISTAN 41
FUNDING LANDSCAPE FOR THE MICROFINANCE INDUSTRY 41
OPEN BANKING 42
Section 1
The Year in Review
Financial Year 2021 was another challenging year for the economy
and the microfinance industry as the recovery from the first and
second waves was in progress while the third wave added more
obstacles to the road of recovery. Pakistan, like other countries, was
threatened by the third wave of the Global Pandemic, Covid-19.
However, effective and timely measures led to a V-shaped recovery
of the economy.

While the threat of Covid-19 was still prevailing over the head of the
Global Economy, Policy makers and regulators in Pakistan were
persistent in keeping the policy rate to 7 percent to facilitate
economic activities for MFPs and their clients. In addition to this,
keeping in mind the Covid-19 impact, regulators provided an
extension for one more year to defer and reschedule loans for
clients’ facing problems in repaying their borrowed credits. Similar
extensions were provided in the area of reporting and compliance
where the implementation of IFRS 9 was delayed for NBMFCs
which otherwise would have added financial and non-financial
difficulties for the microfinance sector.

On the other side, the concept of smart lockdown was implemented

by the government dvuring the second wave and more efficiently in
the third wave which allowed breathing room for MFPs to operate
and reach their existing and potential clients as operations were
allowed to be resumed under certain SOPs which were very strictly
adhered to.

As the crisis proved to be a catalyst for digitization and automation

in FY 2020 and several steps were taken on the funding side
including setting up guarantee funds and social impact funds, the
impact of Covid-19 led to the realization of technology as an
important element for the effective and efficient outreach to the
clients. Hence, FY 2021 was a transitioning year where the majority
MFPs started to integrate into their operations as well.

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 1.1 MACRO-ECONOMY &
THE MICROFINANCE INDUSTRY
Despite the third wave of Covid-19 and a prediction of 2.1 percent
GDP Growth, the economy surpassed the target, closing the
growth at 3.9 percent in FY 2021. (Table 1). While Covid-19 impact
and the restrictions that came along had repercussions on the
interest rate and inflation rate as both components closed at 10.75
percent and 12.30 percent. Agriculture, manufacturing, and
Services sectors successfully reached the projected growth.

On the Fiscal front, revenues from taxes experienced a significant

increase of 18 percent which had a major role in reducing the
current, fiscal, and primary balances affected. The current account
deficit fell to a 10-year low which led to a reduction in Gross Public
Debt and Primary balance.

In addition to this, the interest rates were stagnant for three quarters
which were subjected to Covid-19 and the smart lockdown, keeping
in view the stress on profitability due to limited operational
movements and the liquidity requirements for the sustenance of
business operations.

Table 1.1: Selected Macroeconomic Indicators

Following the impact of Covid-19 in FY 2020, policymakers and
regulators anticipated a recovery trend. Nevertheless, the trend FY 21
Macroeconomic FY 19 FY 20
was anticipated with pessimism as targets were projected with a Indicators Target Actual
skeptical approach. However, the actual growth surpassed
targets in every indicator. While the agriculture projected growth Percent Growth

and actual growth were the same, the manufacturing sector’s Real GDP 1.9 -0.4 2.1 3.9

actual growth was 3.6 percent (Projected: 0.1 Percent) the and Agriculture 0.6 3.3 2.8 2.8
Services Sector’s actual growth was 4.4 percent (Projected: 2.6 Industry -2.3 -3.8 0.1 3.6
percent). Though target-based incentives were one of the major Services 3.8 -0.6 2.6 4.4
contributors to the growth, policies like minimum support price
Private Sector Credit 11.6 N/A 11.2
(MSP) of wheat increased significantly, the availability of input
National Consumer Price Index 6.8 10.7 5-7 8.0
equipment was subsidized, the reduction of tariffs on imported
Exports -1.1 -7.1 1.5 13.7
raw materials, and the elimination of peak-hour electricity tariff
Imports -9.9 -15.9 1.1 23.3
rates resulted in decreased cost of productions, particularly
export-oriented operations led to a meeting and crossing the Exchange Rate -24.1 -4.8 N/A 6.7

targets. Furthermore, the expedited processing of GST refunds Percent of GDP

had additional positive effects on the export sector. The Current Account Balance -4.8 -1.7 -1.6 -0.6
government extended the deadlines for claiming benefits under Primary Balance -3.6 -1.8 -0.5 -1.4
the amnesty scheme to June 2021 to encourage construction, Fiscal Balance -9.1 -8.1 -9.2 -7.1
while the SBP was implemented. Gross Public Debt 86.1 87.6 N/A 83.5

Source: State of Pakistan's Economy 2021

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 Exhibit 1.11: Historic Trend in Macroeconomic Indicators

Discount Rate Consumer Price Inflaction (Average) 6-months KIBOR

16.00
13.75
14.00
10.75
12.00 10.50 13.24 8.00
11.00
10.00 11.21
10.55 10.70
8.00 6.25
6.00 7.30 7.10
6.01
4.00
4.20 3.90
2.00

0.00
FY 17 FY 18 FY 19 FY 20 FY 21

FINANCIAL YEAR

The beginning of the year also witnessed an increase in inflation

compared to the prior year. Consumer Price Index (CPI), stood at 11
percent compared to 8 percent in December 2020 (Figure 1.2). This
was primarily driven by higher food prices, particularly essential
commodities such as Wheat and Flour, Pulses, Sugar, Gur, and
Edible oil. While the government made efforts to contain the prices
of food commodities, the ease in lockdown led to stimulation of the
economic activities which contributed to the increase in these
indicators

The landscape of macroeconomic variables presents a trend in line

with the overall GDP growth. The inflation has experienced volatility
during FY 2021 and closing at 12.30 – an increase of 4.30 percent
from FY 2020 – While policymakers and regulators absorbed the
inflationary pressure and maintained CPI at 8.9 percent till June
2021, the impact of power tariffs, an uptick in fuel prices and the
deterioration of exchange rate ultimately forced the inflation to
increase and closing the consumer Price Index to 11 percent in
December 2021. (Exhibit 1.11 and 1.12)

Exhibit 1.12: Monthly Trend in Inflation Rate

12.30
12.00 11.10 10.87 11.50
10.00 9.05 9.65 8.98 9.19
8.70 8.40 8.35
8.00
Inflation Rate

8.00
6.00 5.65
4.00
2.00
0.00

Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21

MONTH - YEAR
Inflation Rate

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The recovery from two waves of Covid-19 in FY 2020 and the began to tighten its monetary policy stance in September 2021. Due
predicted consequences from the upcoming third wave led SBP to to a rebound in domestic demand, increased commodity prices,
put the ceiling over the interest for three quarters. Hence the interest and ongoing inflationary pressures, Pakistan's monetary policy
rate has been stagnant at 8 percent as shown in Exhibit 1.3. While changed course in Q4, 2021 in line with the country's evolving
keeping in context, the Covid-19 impact, SBP also took various economic outlook. As a result, during three consecutive monetary
measures to provide a room the for-microfinance sector to operate policy decisions, the policy rate rose by a total of 275 basis points to
without facing the risk of solvency. These measures include an 9.75 percent. As a result, the MPC increased the policy rate by 250
increase in loan limits, cuts in the policy rate and principal, basis points at an unscheduled meeting on April 7, 2022. The MPC
deferments, and Loan Rescheduling. However, as the economy was believed that by taking this measure, the external sector and price
transitioning to the normal course of action. After maintaining the stability would be protected.
policy rate at 7 percent during all MPC meetings held in FY2021, SBP

Exhibit 1.13: Monthly Trend in Interest Rate

10.00
8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 10.75
8.00 9.75
Interest Rate (%)

8.25 8.25
6.00

4.00

2.00

0.00
Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21

MONTH - YEAR

Due to the success of the pandemic containment measures during year, whereas the current account remained in surplus for five
the first wave, second wave, and third wave, the economy continued consecutive months from July 2020 onwards. The Central Bank
on the track of a V-shaped recovery during FY 2021 journey. Though accredited this advancement to an improved trade balance and
skeptical target projections hinted at the element of growth and with sustainable inflows in remittances. This improvement in the current
appropriate regulatory policies linear recovery was seen in the account in tandem with greater financial inflows also led to the
agriculture sector, while improvement in the services sector and increase in the SBP’s reserves to the highest they have been in the
industrial output was exponential. (Table 1.1) last three years.

The FY 2021 witnessed swift measurements taken from the FY 2020 was a challenging year for the Microfinance industry.
government and SBP which resulted in effective and efficient However, FY 2021 proved to be a recovery period for the
management during the Global Pandemic time. The economy has microfinance sector. In terms of Micro Credit, the number of active
been steadily progressing towards a more sustainable and inclusive borrowers experienced an increase of 16 percent while Gross Loan
growth path. The performance in the agriculture, LSM, construction Portfolio experienced an increase of 21 percent closing the active
and export sector were among the key success stories. The rupee borrowers base at 8.12 million borrowers (2020: 7 million) and Gross
was stable and foreign exchange reserves (SBP and commercial) Loan Portfolio at 392,585 million PKR (324,155 million PKR).
reached $ 23.2 billion (as of 3rd June 2021), The business Indicators of micro-savings presented a similar trend, an increase of
confidence returned and economic activity started to return to 23 percent was witnessed in the savers base while a 13 percent
normal course. increase was observed in Savings value, clocking the savers base at
78 million (2020: 64 million) and savings values at 422 million PKR
The FY saw improvements in the Current Account of the country as (374 million: PKR). The landscape of micro-insurance was no
the fiscal deficit fell by 78 percent despite plummeting economic exception either. An increase of 16 percent was experienced in the
activity which significantly hindered tax revenue growth during the Policyholders base, closing the figure at 8.4 million (2020: 7.3 million)
first half of the year. The year witnessed the deficit improve to USD and sum insurance closed at a value of 324,201 million PKR (2020:
2.966 billion as compared to USD 13.434 billion in the previous fiscal 244,650 million PKR). (Table 1.12).

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 Table 1.12: Growth in Microfinance Outreach2

Micro-Credit Micro-Savings Micro-Insurance

Outreach
Indicators Sum Insured
Active Borrowers Value (PKR Million) Active Savers Value (PKR Million) Policy Holders (PKR Million)

Q4 2020 7,005,885 324,155 64,112,657 374,362 7,324,379 244,650

Q1 2021 7,591,130 340,473 67,442,325 372,572 7,652,045 261,976

Q2 2021 8,031,941 355,700 70,314,180 379,023 8,514,016 315,807

Q3 2021 8,209,632 367,790 72,524,715 386,524 8,498,506 324,201

Q4 2021 8,122,085 392,585 78,731,952 422,547 8,498,506 324,201

The middle class and those at the bottom of the pyramid are the which includes DRP Loans classified as past due by 60 days rather
groups most susceptible to lockdowns, as revealed in FY 2020, and than 30 days, reversed interest/profit/markup/services charges that
a sizable proportion of borrowers were still having trouble meeting had already been suspended for an extended period, promoted
their debt commitments. Additionally lacking a lender of last resort, micro-housing and enterprise financing, and encouraged
NBMFCs continued to be more susceptible to changes in liquidity branchless banking.
levels. Additionally, these organizations had to deal with domestic
banks which were unsure about their loan lines and not willing to
extend their credit lines due to an increase in perceived risk related
to the microfinance industry. Furthermore, with Covid-19 third wave
and its unclear effects created uncertainty in the first part of FY 2021,
several steps at the policy level were undertaken by the regulators,
and policymakers gave operational space for the microfinance
sectors. The Government of Punjab (GOP) and State Bank Pakistan
(SBP) nevertheless collaborated to promote weaker groupings.
SBP continued to be proactive in addressing new challenges by
actively involving the microfinance sector and introducing policies
that increased loan limits, relaxed the Covid-19 Relief Portfolio,

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 POLICY AND REGULATORY REVIEW
REGULATORY RELIEF BY SBP FOR MFBS
Keeping in view the continuation of Covid 19 in FY 2021, SBP provide regulatory relief to the MFBs in December 2021, by issuing a circular .
This circular was in continuation to circulars 01, 04, and 07 issued in 2020. To mitigate the adverse effects of Covid 19 on their clients, MFBs
deferred/restructured their outstanding loans with them.

This circular allowed MFBs to extend relief to the affected clients by relaxing the provisioning and classification of the asset criteria for the
deferred and restructured portfolio. This relaxation had been extended till March 31, 2022. The provisioning requirements and asset classifi-
cation criteria have been relaxed. (Table 1.21)
Table 1.21: Growth in Microfinance Outreach

CATEGORY Determinant (Existing) Determinant (DRP)

Other Assets Especially Loans (principal/mark-up) are overdue for 30 Loans (principal/mark-up) are overdue for 60 days or more
Mentioned (OEM) days or more but less than 60 days but less than 90 days

Substandard Loans (principal/mark-up) are overdue for 60 Loans (principal/mark-up) are overdue for 90 days or more
days or more but less than 90 days but less than 120 days

Doubtful Loans (principal/mark-up) are overdue for 90 Loans (principal/mark-up) are overdue for 120 days or more
days or more but less than 180 days but less than 210 days

Loss Loans (principal/mark-up) are overdue for 180 Loans (principal/mark-up) are overdue for 210 days or more
days or more

This relaxation will not only facilitate the clients and reduce the impact of Covid 19 but also, allow MFBs to smoothen future losses due to
delinquencies. Similarly, the application of IFRS 9 on MFBs has been declined to minimize the impact of Covid 19.

NEW REGULATORY REQUIREMENTS FOR NBMFCS

In the year 2021 SECP introduced several new regulatory requirements for NBMFCs. These requirements covered areas of risk management,
funding & liquidity management, credit underwriting, and corporate governance.

The risk management requirements were applied to NBMFCs having a Gross Loan Portfolio of over PKR 500 million. The entities are
required to have a comprehensive risk framework duly approved by their boards. Moreover, the risk management framework needs to cover
all risks and not just be restricted to credit risk only. In addition, contingency planning for various stress situations needs to be developed and
reviewed regularly.

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Secondly, NBMFCs were required to have a funding and liquidity
management framework with an aim to have diverse sources of
funding to remain sustainable and meet their double bottom-line
objective. Through this amendment, NBMFCs have not only been
encouraged to diversify their funding sources but also use diverse
financial instruments to meet their funding needs. Importantly, a
single lender borrower limit has been imposed ranging between 60
percent to 75 percent depending upon their debt-to-equity ratio.
While the CAR limit has not been imposed on NBMFCs so far but
from these regulatory changes, it appears we are heading toward its
imposition in the future. Also, the changes require the creation of a
special reserve fund by NBMFCs require where at least 5 percent of
the after-tax profits shall be credited and reported as a separate
head in the statement of financial position as part of the equity.

Thirdly, the NBMFCs board shall establish and oversee a loan

underwriting policy aligned with its risk governance framework, its
risk tolerances and limits, and its overall risk appetite and strategy,
and the policy shall be reviewed by the board periodically. Entities
shall have written manuals and policies about the screening,
approval, monitoring, and collection of loans. In addition, NBMFCs
have been asked to develop know-your-customer (KYC), Customer
Due Diligence (CDD), and AML/CFT policies.

Lastly, a code of corporate governance for NBMFCs has been

introduced which prescribes having independent and women
directors on the board, disclosures on conflict of interest, directors
training, and frequency of meetings. Sub-committees of the board
dealing with Audit, Human Resources & Remuneration, and risk
management need to be formed. Special emphasis has been made
on having an internal audit function for the NBMFCs. Moreover,
external auditors for NBMFCs should be appointed having
satisfactory ratings on the Quality Control Review program of ICAP.

These amendments in the regulations are among the most

comprehensive issued by SECP since the nonbank microfinance
entities were brought under the regulatory umbrella in 2015. It is
reflective of the fact that entities are expanding and growing and
there is a need to formalize their risk management, credit
underwriting standards, and corporate governance. All these steps
are essential for NBMFCs to scale up their operations. While in
essence, diversifying funding sources and using multiple
instruments to raise funds by NBMFCs is a welcome step, however, in
practice it will be difficult for mid and smaller-sized entities as raising
debt from local commercial lenders except for PMIC remains a
challenge. Extension on the application of the amendment on a
case-to-case basis in tandem with SECP efforts to encourage
commercial lending to NBMFCs can see these entities successfully
diversify their funding sources.

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 INDUSTRY INITIATIVES
Covid-19, with its multiple waves, had continued to make headlines
and pose challenges for the microfinance sector of Pakistan during
the year 2021. The economic turmoil also badly impacted the end
clients as well as the Microfinance Providers in the country. In the
face of these challenges, the Pakistan Microfinance Investment
Company – PMIC had continued to play a leading role as an apex for
the microfinance sector and extended unwavering support to its
borrowers (MFPs) as well as the overall microfinance sector. During
the year, the credit disbursements from PMIC to borrowing institu-
tions were utilized to serve around 720,000 microfinance clients, of
which 85% were women. 65% of the portfolio at year-end was
outstanding in rural areas, which is in line with PMIC’s objective to
serve those in marginalized areas and enhance development
outcomes. PMIC’s model of financing is in line with its vision to
enhance employment and income-generating opportunities as
almost 31% of the portfolio was dedicated to trade/manufacturing
and production purposes, while exposures in agriculture and
livestock aggregated at 33%. Loans to the services sector stood at
17% at year-end while 3.2% of the portfolio was deployed in Educa-
tion, Renewable Energy, Housing, and Consumer loans.

PMIC was able to maintain the entity rating at “AA/A-1+” and

successfully raised funds from commercial banks during 2021,
closing the year at Rs. 11.3 billion of commercial borrowings. PMIC,
as the lead advisor and arranger, completed PKR 3.5 billion Privately
Placed Term Finance Certificate (PPTFC) transaction - under its
Social Impact Fund - for U Microfinance Bank. Furthermore, PMIC
introduced its “First Loss Guarantee Facility” (“FLGF”) to incentivize
commercial funding into the microfinance sector. With the eclipse of
the PPAF PRISM facility and SBP’s Microfinance Credit Guarantee
(MFCG) under the Financial Inclusion Program, a need was felt for
such a guarantee facility to assist mid-tier entities to borrow
commercially.

PMIC continued to deploy innovative initiatives to achieve its triple in collaboration with Asia Insurance and three MFIs. Opportunity
bottom-line mandate. In this regard, PMIC launched its first-ever International and PMIC also agreed to scale up the initiative to
Challenge Fund-CF under the thematic area of “Accelerating improve the quality of education in the country by financing
Access to Finance and Increasing Income of Small Farmers”. The CF low-cost private schools and building the capacity of school teach-
would offer a competitive environment to participating organiza- ers in pedagogical skills and owners in school management.
tions in deploying innovative product verticals and business models
for end clients. Further, PMIC successfully launched its “New Institu- The microfinance sector is expected to grow exponentially in the
tional Development Fund”, with more lenient eligibility criteria to year 2022, especially with increased vaccination of individuals
attract PMIC financing to support new entrants in the microfinance across Pakistan, risk of covid-19 related lockdowns remains low and
sector. business as normal has returned. The client appetite for financing
from MFPs is expected to rise as they require capital to rebuild their
PMIC KfW Renewable Energy Initiative – PRIME had also continued livelihood means. However, financial institutions should remain privy
to provide financing for access to solar home solutions to clients to higher credit risk, especially on account of increased inflationary
residing in off-grid and poor grid areas of Pakistan. PMIC had also pressures on end clients due to economic turmoil in the country -
launched a digital application-based livestock microinsurance pilot which will impact the repayment capacity of clients. PMIC will

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continue to play its role as a sector developer and meet the financ- Company – PMIC had continued to play a leading role as an apex for
ing needs of MFPs, with support from its shareholders, commercial the microfinance sector and extended unwavering support to its
banks, and other financial institutions in the country. PMIC, in collab- borrowers (MFPs) as well as the overall microfinance sector
oration with regulators, will continue to help the sector grow, both in
terms of clients as well as loan books, and help MFPS to expand PMIC launched its first-ever Challenge Fund-CF under the thematic
outreach of microfinance operations in marginalized areas of the area of “Accelerating Access to Finance and Increasing Income of
country. PMIC and PMN collaboration will remain instrumental in Small Farmers”. At a time, when lending to the Agri sector is
helping MFPs embrace best practices from the global microfinance decreasing in the microfinance sector this challenge fund, can
landscape and enable them to tackle challenges faced in achieving arrest this decrease and introduce new products to promote
growth in a risk-averse manner. lending to this segment. Further, PMIC successfully launched its
“New Institutional Development Fund”, with more lenient eligibility
Covid-19, with its multiple waves, had continued to make headlines criteria to attract PMIC financing to support new entrants in the
and pose challenges for the microfinance sector of Pakistan during microfinance sector. With a potential market of over 40 million
the year 2021. The economic turmoil also badly impacted the end clients and active microfinance providers being around 40, new
clients as well as the Microfinance Providers in the country. In the entrants can accelerate financial inclusion in the economy.
face of these challenges, Pakistan Microfinance Investment

MICROFINANCE INDUSTRY &

AFFORDABLE HOUSING
In order to address the challenge of the chronic housing shortage in
the country and secondly, to boost the economy given the
Exhibit 1.32: Housing Borrowers in Microfinance Industry
importance of the construction industry, an ambitious housing
subsidy program was launched by the government of Pakistan 120,000

under the banner of “Mere Ghar Mera Pakistan” and creation of 100,000
Naya Pakistan Housing & Development Authority (NAPHDA). SBP
followed this up by giving indicative housing targets for commercial 80,000

banks.
60,000

The emphasis on low-cost housing came at a time when 40,000

microfinance entities in Pakistan were looking towards diversifying

20,000
their asset bases. Tier 0 housing loans were created keeping in view
-
the MFBs with a limit of PKR 2 million. Microfinance players built up 2017 2018 2019 2020 2021

“Mere Ghar Mera Pakistan”

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their capacities and introduced housing loan products for the loans extended by the industry closed at 93 thousand (Exhibit
clientage. To refinance the loans keeping in view their longer tenors, 1.3.2). Going forward, low-cost housing finance has the potential to
refinance lines from Pakistan Mortgage Refinance Company become an integral part of the product offerings of the microfinance
(PMRC) were obtained. Up to 12 lines amounting to PKR 5.15 billion industry.
were disbursed to MFBs and NBMFCs. Due to these efforts, housing

BANKING ON EQUALITY
Women in Pakistan are disproportionately underserved by the dedicated teams working on gendersegmented product design by
financial system of Pakistan. To achieve greater financial inclusion, it keeping in mind the importance of the existing social norms and
is pertinent to include men and women equally. Women represent marketing the products accordingly. To promote these products,
49% of the Pakistani population and the country cannot grow financial institutions will collaborate with organizations and trade
economically without them. According to the World Bank’s global bodies. This will help them in achieving their set targets for savings
demand side survey Findex, as of 2021, 21% of adults have a formal and credit products for women. Furthermore, creating a separate
financial account, increasing from 13% in 2014. Whereas, female tab for women’s financial services on the FI’s website will also
accounts have increased to 13.5% from 7% in 2017. increase the reach of the desired products among potential women
customers.
The State Bank of Pakistan (SBP) has proposed policies identifying
five pillars that will promote institutional diversity, product The dearth of gender-disaggregated data further impedes the
diversification and development capability, customer acquisition, development of informed policies and actions for reducing the
and facilitation by emphasizing the provision of facilities to women. financial gender gap. Under this policy, SBP will instruct financial
The SBP has further stressed the importance of the collection of institutions to collect and report gender-disaggregated data
disaggregated data for the distinction and identification of the focusing on the dissemination of products and services to women.
imbalance in the inclusion of both sexes in the financial sector. Additionally, SBP will also have in-house research done on gender
Although gender-neutral policies have been in place in the financial and thus develop tools for impact assessment in reducing the
sector they have proved to be insufficient in reducing the gender gender gap.
gap. Gender mainstreaming should be the main priority of
policymakers as it will allow them to see through the gender lens
and have a specialized gender focus on the issue.

To promote the role of women in the workforce it is very important to

address the internal gender imbalance. Women in top leadership
roles at financial organizations will assist policymakers in developing
women-friendly policies with practical knowledge from within the
field. Currently, 13% of the banking staff and 1% of the branchless
banking agents are women. We can improve gender diversity by
increasing the number of women champions at customer
touchpoints. These women champions will have to take gender
sensitivity training apart from being well versed with the bank
products and government and SBP schemes to assist women
entrepreneurs and customers. The SBP aims to implement such
resources in at least 75% of the touchpoints. It will also be ensured
that female labor force participation is increased to 20% by 2024 to
further promote the agenda of gender diversity. Although it is
mandatory for the institutions to have at least one woman on their
board, there are gaps in implementation. Therefore, through this
policy, the importance and implementation will be reiterated.
To focus on gender-inclusive design, it is imperative to have

1 0 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
The fifth pillar of the policy initiative comprises setting up a policy Apart from all these initiatives, it is pertinent to understand that
forum on gender and finance. The forum will not only discuss the social norms inhibit overall financial inclusion as the root cause goes
drivers and barriers to women’s financial inclusion but will also act as beyond providing access. Nonetheless, gender blind practices
a catalyst for internalizing gender mainstreaming within the continue to increase the gaps, despite the advancement in
organizations. This forum will be chaired by Governor SBP and technology. Implementing the proposed policies will incorporate
include members from Banks, DFIs, MFBs, SECP, women’s chamber different gender perspectives and thus aims to advance women’s
of commerce, civil society, 15 private sector, gender leaders, etc. financial inclusion in Pakistan.
Annual conferences will also be held in this regard for knowledge
sharing and supporting women’s financial inclusion.

1.4 CONCLUSION
The year saw the microfinance industry another year of the Covid 19, however, the launch of covid vaccinations and the success of the
government strategy of smart lockdowns showing results saw the industry eyeing a return to normalcy. The macroeconomic condition
remained conducive with inflationand interest rising steadily. The central bank continued with an accommodative monetary policy.

On the policy, side saw SBP continued to facilitate the MFBs by providing them relief in the classification of assets and provisioning.
Similarly, the application of the IFRS 9 was delayed by a year by both SECP and SBP to mitigate the effect of its application on MFPs during
the Covid crisis. SECP rolled out acomprehensive set of regulations focusing on governance, risk management, credit risk, and liquidity
management for the NBMFCs. These were the most detailed set of regulations for NBMFCs since they were under the regulatory umbrella
of SECP in 2015. This moves signals more formalization of the NBMFCs by the regulator.

Several initiatives were launched by PMIC, SBP, and members in the year. PMIC continued to be the main source of commercial debt for the
sector. In addition, it did its first transaction under the Social Impact Fund by issuing privately placed bonds. To promote commercial lending
to the sector, PMIC launched its First loss guarantee fund in the year. Keeping in view the focus on the housing sector by the government,
several players have entered the affordable housing market and borrowed from the PMRC. The year also saw SBP making a concentrated
effort to improve women’s access to finance by launching Banking on Equality Policy with targets for the entire financial sector.

Overall, the sector fared well than in previous years and successfully negotiated the Covid crisis.

1 1 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Section 2
Financial Performance
Review
This section provides a detailed analysis of the financial performance of the Microfinance sector of Pakistan in the fiscal year 2021. The
performance has been evaluated at three different levels: industrywise, across peer groups, and institution-wise. 88 financial metrics
derived from the reporting organization's audited financial statements provide support for the study. The indicators are compared across
time – horizontal – and regions to develop a reliable and fair assessment of the sector.

Detailed financial information is provided in the Annex A-I and A-II of the PMR. Aggregate data has been compiled for five years, whereas
the peer group and institution-specific data has been made available for the current and previous fiscal years.
A total of 33 MFPs submitted their audited financial statements for PMR 2021. For a complete list of reporting organizations refer to Annex
B.

Industry players have been categorized into two groups for benchmarking and comparison purposes: Microfinance Banks (MFBs) and
Non-Bank Microfinance Companies (NBMFCs). See Box 2.1 for detailed definitions.

The distribution of respondents (number of reporting organizations)

by peer group is given in Exhibit 2.0.
The MFB peer group comprises 10 entities while the NBMFCs are
represented by 23 entities.
Box 2.1: Peer Groups
Microfinance Bank (MFB): A bank licensed and prudentially
DISTRIBUTION OF MFPS BY PEER GROUPS regulated by the SBP to exclusively service the microfinance
Exhibit 2.0: Distribution of Respondents by Peer Group
market. The first MFB was established in 2000 under a
presidential decree. Since then, 11 MFBs have been licensed
MFBs NBMFCs under the Microfinance Institutions Ordinance, of 2001. MFBs
are legally empowered to accept intermediate deposits from
the public.

30%
Non-Bank Microfinance Company (NBMFC): With the
introduction of the non-bank microfinance regulatory
framework by SECP in 2015, the institutions carrying out
microfinance services are required to be registered with
SECP as NBMFCs. Presently, 24 PMN member entities have
obtained the NBMFC license, while 1 is an NBFC operating
70% with an Investment finance service license.

1 2 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 SCALE & OUTREACH
This section focuses on the outreach indicators to provide performance analysis through comparison of credit growth and its composition,
deposit mobilization, depth of outreach and gender distribution.

BREADTH
While the impact of Covid-19 was observed in the fiscal year 2020, compared to the 319 billion PKR in prior year as shown in the Exhibit
and the Covid-19 wave was in continuity, the recovery from 2.2, representing an increase of 17 percent. Number of active
pandemic was observed in the fiscal year of 2021 as the outreach borrowers depicted a similar trend. A growth of 13 percent was
indicators represented stellar growth. The value of Gross Loan observed during the fiscal year 2021 as number of borrowers grew
Portfolio at the year-end 2021 closed at 373 billion PKR as from 6.98 million in 2020 to 7.91 million.

Exhibit 2.1: Micro-Credit Outreach

ACTIVE BORRWERS & GROSS LOAN PORTFOLIO

10.00 400
373
Active borrowers in millions

319 350

GLP in PKR Billions

8.00 302
300
256 250
6.00
196 200
4.00 150
5.51 6.69 7.44 6.98 7.91 100
2.00
50
0.00 0

2017 2018 2019 2020 2021

Year

Active borrowers GLP

Among the entities contributing to the increase in active borrowers, with the 674 thousand clients and HBL MFB, formerly known as
Mobilink Microfinance Bank (MMFB) remained at the top FMFB, with 555 thousand clients in their respective portfolio. The
contributing 1.2 million new active borrowers to their portfolio. total outreach of the top 10 MFPs constitutes 85 percent of the total
ASA-P and Kashf Foundation (KF) followed the trend and outreach (2020: 80 percent) whereas the top 5 MFPs have a market
contributed 91 thousand and 60 thousand of new clients to their share of 61 percent. (Exhibit 2.2)
portfolio.
The highlight of this particular indicator is the 1.2 million increase in
By the year-end, Mobilink Microfinance Bank (MMFB) remained at Mobilink Microfinance Bank (MMFB) clientele, primarily because of
the top with a clientele of 2 million followed by Khushhali nano loans, closing its client portfolio at 2 million at the end of the
Microfinance Bank (KBL) with 806 thousand clients, Akhuwat with fiscal year 2021.
767 thousand clients, National Rural Support Programme (NRSP)

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 ACTIVE BORRWERS
Exhibit 2.2: Top 10 MFPs in terms of Active Borrowers

225
Finca 202
345
NRSP-B 317
346
U-Bank 346
421
ASA-P 512
490
KASHIF 550
MFPs

573
HBL MFB 555
747
NRSP 674
762
Akhuwat 767

KBL 882
806

BORRWERS
808

ACTIVE
MMFB 2,018

2,018 1,000 1,500 2,000 2,500

Active Borrowers’ 000

2020 2021

During the fiscal year 2021, MFBs' share of clientele increased by 4 of client market share. The increase in MFBs clientele share is
percent, closing at 57 percent client market share (2020: 53 mainly because of the exponential increase in Mobilink
percent) whereas a decrease of the same magnitude was Microfinance Bank's (MMFB) client portfolio. (Exhibit 2.3)
experienced in the NBMFCs collective clients leading to 43 percent

Exhibit 2.3: Active Borrowers by Peer Group

100%

80%
54% 52% 50% 47% 43%
60%

40%

20%
46% 48% 50% 53% 57%
0%

2017 2018 2019 2020 2021

MFBs NBMFCs

By the end of 2021, the Gross Loan Portfolio (GLP) stood at 372 experienced a decrease in their Gross Loan Portfolio by an
billion PKR as compared to 319 billion PKR in fiscal year 2020. Both approximate aggregate amount of 2.7 billion PKR. NBMFCs
NBMFcs and MFBs contributed to the growth in Gross Loan contributed to the increase by net aggregate amount of 10 billion
Portfolio (GLP). PKR where the Kashf Foundation (KF), Akhuwat, ASA-P and RCDP
collectively contributed to an amount of 10.6 billion PKR to the
However, the contribution from MFBs was substantial. MFBs increase while National Rural Support Programme (NRSP),
contributed to an aggregate increase of 44 million PKR where Thardeep Micro Finance (TMF), Punjab Rural Support Programme
Mobilink Microfinance Bank (MMFB), Khushhali Bank (KBL) and (PRSP) and FFO offset this increase by a total amount of 1.6 billion
HBL MFB formerly known as FMFB, accumulated an additional 40 PKR. Exhibit 2.4 displays the trend by peer group over the time
billion PKR to the portfolio. On the contrary, Telenor Microfinance period of five years
Bank (TMFB) and FINCA Bank were the two MFBs which

1 4 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 Exhibit 2.4: Gross Loan Portfolio by Peer Group

400
350
95
300
87 85
250
76
200
60
150 278
215 234
100
136 180
50
0.00
2017 2018 2019 2020 2021

MFBs NBMFCs

Exhibit 2.5 displays top 10 MFPs based on Gross Loan Portfolio and Akhuwat has improved their position by two steps from prior
(GLP). Top 10 MFPs Gross Loan Portfolio (GLP) covers 88 percent of year position by locking their portfolio at 39 billion PKR and 21 billion
the total portfolio, 1 percent increase compared to fiscal year 2020. PKR, depicting a steep increase of 52 percent and 22 percent
In addition to this, Telenor Microfinance Bank (TMFB) was replaced respectively. On the other side, Finca Bank and National Rural
by ASA-P which has a total portfolio standing at 14 billion PKR at the Support (NRSP) experienced decrease in their Gross Loan Portfolio
year end 2021. Khushhali Bank (KBL) remains at the top with a Gross (GLP) of 1.8 billion PKR and 878 million PKR closing their Gross Loan
Loan Portfolio (GLP) of 72 billion PKR, despite experiencing a drop Portfolio (GLP) at 19.6 billion PKR and 18.5 billion PKR.
at number of active borrowers. Mobilink Microfinance Bank (MMFB)

Exhibit 2.5: Top 10 MFPs based on Gross Loan Portfolio (GLP)

TOP 10 MFPS BASED ON GROSS LOAN PORTFOLIO

80
73
70
Gross Loan Portfolio (PKR Billion)

62 59
60

50
43
40 38 36
31 31 39
30
25
32 20 22 19 19
20 18
16 14
14
10
10

-
KBL HBL MFB MMFB U-Bank NHSP-B Akhuwat Finca NHSP KASHIF ASA-P
MFPs

2021 2020

By the end of the year, peer groups followed the same trend as in NBMFC peer group, the average loan size experienced an
fiscal year 2020. MFBs continued to increase their Gross Loan increased from 25 thousand PKR to 28 thousand PKR. On the
Portfolio (GLP) and accounted for 75 percent of total GLP contrary, decline of average loan size was experienced by MFBs
compared to 73 percent in preceding year. Consequently, the GLP peer group. By the year end 2021, the average loan size of
share of NBMFCs declined by 2 percent, closing at 25 percent MFBs was 61 thousand PKR (2020: 64 thousand PKR). The
Gross Loan Portfolio (GLP) share. (Exhibit 2.6). decrease in MFBs average loan size is due to inclusion of the nano
loans.
Despite the decrease in percentage of Gross Loan Portfolio (GLP) in

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 Exhibit 2.6: Gross Loan Portfolio by Peer Group

100%

80% 30% 30% 29% 27% 25%

60%

40%

20%
70% 70% 71% 73% 75%
0%

2017 2018 2019 2020 2021

Year
MFBs NBMFCs

During the year under review, the microsavings indicators deposit outstanding as well. An increase of 7.5 percent was
experienced remarkable growth as depositors increased by 24 experienced during the year 2021, which led to an addition of 28
percent, from 60 million in 2020 to closing balance of 74 million by billion PKR. Hence closing the figure at 401 billion PKR. (Exhibit 2.7)
the end of 2021. The increasing trend was depicted in the amount of

Exhibit 2.7: Number of Depositors and Outstanding Deposits

NUMBER OF DEPOSITORS & DEPOSITS OUTSTANDING

373 400

70 350
Number of Depositors (Millions)

266
60 300
Deposits (PKR Billiom)

239 74 250
50

40 200
186
30 118 60 150

20 44 100
32
10 28 50

- -
2017 2018 2019 2020 2021

Year

Depositors Deposits Outstanding

Mobilink Microfinance Bank (MMFB), Telenor Microfinance Bank primarily due to the increase user base of M-Wallets. Mobilink
(TMFB) and U Bank led the growth by increasing the depositor base Microfinance Bank (MMFB) and Telenor Bank (TMFB) has retained
by 13.7 million depositors collectively, representing 96 percent of the their position and remain the largest providers of microsavings in
change during the fiscal year 2021. Mobilink Microfinance Bank terms of depositors with an outreach of 39.8 million and 24.6 million,
(MMFB) is the leading MFP in this indicator and contributed an where as Khushhali Bank was replaced by U bank which has 2.7
increase of 11.3 million depositors during the fiscal year 2021. This is million depositors in its portfolio.

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The landscape of value of deposits has experienced a significant 2021, whereas Advans increased their deposit value by 1.2 billion
development in the fiscal year 2021. Despite the fact, Khushhali PKR and closing its deposit value portfolio at 2.2 billion PKR.
Bank (KBL), HBL MFB formerly known as FMFB and Mobilink (Exhibit 2.8) However, Deposit to Liabilities has experienced a
Microfinance Bank (MMFB) remained the leaders in this indicators contrary trend. A decrease of 4 percent was observed due to
by closing their deposit value at 93 million PKR, 91 million PKR and additional Tier 2 borrowings which were raised to keep the cushion
58 million PKR respectively. However, Advans and Pak Oman against liquidity crunch and to meet the Capital Adequacy Ratio
Microfinance Bank experienced tremendous growth. Pak Oman (CAR) which indicates the recovery phase of Microfinance Sector
Micro Finance rose from 6 million PKR to 1.7 billion PKR during year from Covid-19 impact.

Exhibit 2.8: Deposits Growth by MFBs

DEPOSITS OUTSTANDING BY MFBS

100 93 91
89
Deposits Outstanding (PKR Billions)

80
62 59
55
60
47 46
39 39
34 37
40
25 26

20
2 1 2
- 0 0 0

KBL HBL MFB MMFB Ubank NRSP-B TMFB FINCA ADVANS POMFB SMFB

MFBs

2021 2020

The average deposit size of MFBs experienced a slight decline of 7 year 2021.
percent and stands 5,397 PKR (2020: 5,806 PKR- Apna
Microfinance Bank (AMFB) is not included) The low deposit size of Pak Oman Micro Finance Bank is leading with the average deposit
the industry is due to the surge in the number of M-Wallets size of 106 thousand PKR followed by HBL MFB formerly known as
represented by Telenor Microfinance Bank (TMFB) and Mobilink FMFB, with the average loan size of 51 thousand PKR and Advans
Microfinance Bank (MMFB). Furthermore, the decrease is due to replacing Khushhali Bank (KBL) from previous year, with the average
low value of M-wallets where Mobilink Microfinance Bank (MMFB) loan size of 51 thousand PKR. (Exhibit 2.9)
experienced a drop of 10 percent in average loan size during fiscal

Exhibit 2.9: Average Deposit Size of MFBs

MMFB 1,473
TMFB 1,586
SMFB 2,629
FINCA 19,151
UBANK 20,076
NRSP-B 28,444
KBL 34,868
ADVANS 51,637
HBLMFB 51,749
POMFB 106,723

20,000 40,000 60,000 80,000 100,000 120,000

Avg. Deposit Size

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Analyzing the depositors by type of deposit reveals that M-Wallets increase of merely 5 percent only. (Exhibit 2.10). The composition of
has continued the increasing trend. An increase of 24 percent was these M-Wallets is currently divided amongst 3 MFBs i.e., Mobilink
experienced by M-wallets which led to the additions of 11.7 million Microfinance Bank (MMFB) with a market share of 61 percent,
depositors during the fiscal year 2021. In comparison, traditional Telenor Microfinance Bank (TMFB) with 38 percent and Finca Bank
bank accounts experienced a negative trend leading to a loss of 1.5 with just 1 percent. The increase in their usage has been reinforced
million depositors, 18 percent decrease, in fiscal year 2021. This is due to the provision of value-added services by these digital
the first time over the past 5 years where a negative trend in providers, such as Debit Cards for cash withdrawal, Utility Bill
depositors was experienced by traditional bank accounts. Over the payments, Funds Transfer Facilities and Home Remittance Services
half decade, M wallets experienced an increase from 22.1 million to along with the increased access of mobiles phones, ease of
64.3 million, an average increase of 35 percent. On the flip side, M-wallets usage and greater access of M-wallets across the region.
traditional banks grew from 8.7 million to 10.3 million, an average

Exhibit 2.10: Depositors by Type of Deposit Account

DEPOSITORS BY TYPE OF DEPOSIT ACCOUNT

80

70
Number of Deposit Accounts

60

50
Millions

40

30

20 22 25 36 52 64
10
9 10 12 12 10
0
2017 2018 2019 2020 2021

Year
Traditional Bank Accounts M-Wallets

Analysis of deposits and Gross Loan Portfolio (GLP) of MFBs depict decrease indicates that MFBs are on the path of recovery as
an increasing trend in both indicators. However, the growth in Gross disbursements were 44 million as compared to 18 million in 2020,
Loan Portfolio (GLP) was twice the growth of deposits which lead to which indicates three times more disbursements during the fiscal
a decrease of 15 percent in the ratio. The ratio signified the reliance year 2021. (Exhibit 2.11). Hence, expanding their lending and
of MFBs on deposits as an affordable source of financing, especially outreach which can be further supplemented by the increase in
during the recovery conditions in the fiscal year 2021. However, the clientele during 2021 as shown in Exhibit 2.11.

Exhibit 2.11: Deposits to Gross Loan Portfolio

DEPOSITS TO GROSS LOAN PORTFOLIO

450 160% 180%

Deposits to Gross Loan Portfolio Ratio

144%
400 136% 160%
133%
123%
Deposits and Gross Loan

350 140%
Portfolio (PKR Billions)

401
300 120%
373
250 234 100%
278
200 265 80%
239 215
150 60%
180
100 186 40%
136
50 20%
0 0%
2017 2018 2019 2020 2021

Year

Deposits GLP Deposit-to-GLP

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In the landscape of Microinsurance, Policy holders accounted for landscape of insurance policies, urban sector has partial edge over
8.2 million, an increase of 12 percent compared to the previous year. rural sector over the spread of policy holders as former makes up
Accordingly, the sum insured stood at PKR 319 billion, indicating a 52 percent of total policy holders while later comprises of 48
decrease of 8 percent during the same period (Exhibit 2.12). In the percent of policy holder.

Exhibit 2.12: Number of Policy Holders & Sum Insured

NUMBER OF POLICY HOLDERS & SUM INSURED

No. of Policy Holders in Millions

Sum Insued in PRK Billions

9 400
8.48 319
9 8.46
249 245 8.23 300
267
8
199 200
8 7.31 7.32

7 100

7 -
2017 2018 2019 2020 2021

Policy Holders Sum Insued

The breakdown of policy holders by MFPs remained the same microinsurance, reaching almost 3 million policy holders and
except for one change. JWS replaced Safco Support Foundation improving their market share from 29 percent to 36 percent,
(SSF). In addition to this, ten largest MFPs represented 95 percent followed by Khushhali Bank (KBL), National Rural Support
of the total policy holders of the industry which remained Programme (NRSP), Akhuwat and Telenor Microfinance Bank
unchanged, whereas the top five increased their share by 3 (TMFB), the combined outreach merely changed as compared to
percent, leading to a representation of 76 percent. By the year end, fiscal year 2020 and stands at an aggregate amount of 3.3 million.
Kashf Foundation (KF) remained the largest provider of (Exhibit 2.13)

Exhibit 2.13: Largest MFPs by Policy Holders

TEN LARGEST MFPS - POLICY HOLDERS

78
JWS 105

123
GBTI 135
229
Damen 500

565
NRSP-B 266

585
HBL MFB 571
MFP

614
TMFB 793

815
Akhuwat 726
845
NRSP 990

943
KBL 833

2,136
Kashf 2,926

- 500 1,000 1,500 2,000 2,500 3,000 3,500

Thousands

No. of Policy Holders

2020 2021

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During the fiscal year 2021, NBMFCs increased their portfolio of On the other side, a contrary trend was experienced where 7
policy holders by approximately 7 percent which equates to percent decline was experienced which culminated into decrease
addition of 1.16 million policy holders, translating into an increase in of 260 thousand policy holders and 16 percent decrease in the
insurance portfolio value of 37 million PKR or 35 percent increase. aggregate insurance value of MFBs. (Exhibit 2.14).
Exhibit 2.14: Policy Holders by Peer Group
MFBs NBMSCs
Policy Holders By Peer Group

64% 66% 68% 62% 69%

36% 38%
34% 32% 31%

2017 2018 2019 2020 2021

YEAR

At the institution level, Kashf Foundation (KF) regained its position Bank (MMFB) which has witnessed a significant decrease of 59
by crossing Khushhali Bank (KBL) by increasing its portfolio from 54 percent closing at 2.7 billion PKR. A deeper analysis indicated that
million PKR to 83 billion PKR, a significant increase of 54 percent the top 10 largest MFPs in terms of sum insured represented 97
while KBL stood at 74 billion PKR and witnessing an increase of 16 percent of the total industry portfolio, while the top 5 made up 83
percent. Overall, all the MFPs witnessed an increasing trend in their percent. (Exhibit 2.15)
insurance portfolio with the exception of Mobilink Microfinance

Exhibit 2.15: Largest MFPs in terms of Sum Insured

TEN LARGEST MFPS- SUM INSURED

90 83
80 74
70 64
59
60 54
Sum Insured

50
43
40
30 28
22 22 19 22
20
11 11 11
10 6 4 3 3
7
3
-
Kashf KBL HBL MFB NRSP Akhuwat NRSP-B TMFB POMFB Damen FFFB
MFP
2021 2020

DEPTH
The depth indicators are associated with the quality of outreach. percent cut-off point. During the year, the ratio of NBMFCs stood at
Thus, outreach indicator depicts the measures of serving the 14 percent, a slight increase of 2 percent from the previous fiscal
lowest socio-economic segment. Hence, the depth is measured by year. However, the ratio of NBMFCs is still below the threshold. In
a proxy indicator: average loan balance per borrower in proportion contrast, the ratio of MFBs witnessed a decrease of 1 percent but
to Gross National Income (GNI). A value below 20 percent is still continues to exceed the 20 percent threshold. A decrease in in
assumed to mean that the MFP is poverty focused. MFBs is associated with nano loans offered by Mobilink
Microfinance Bank (MMFB) and Telenor Microfinance Bank (TMFB)
Based on the observations of past half decade, the average is 23 which is catering to variety of customer segments across the
percent where an increase of 3 percent was witnessed from the region. (Exhibit 2.16)
previous fiscal year. The ratio continued the trend of exceeding 20

2 0 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 Exhibit 2.16: Depth of Outreach by Peer Group

35% 36%

31%
30% 29%

25%
24% 24%
Depth of Outreach

21% 21%
20% 20% 20% 20%

14% 14%
12%

6% 7%

2017 2018 2019 2020 2021

MFBs NBMFCs Cut - off Industry

LENDING METHODOLOGY
The analysis of the outreach based on Lending Methodology decreased to 75 percent compared to 78 percent in the prior year.
depicts the declining trend in the individual borrowing Consequently, the proportion of group lending increased from 22
methodology which has caused group lending to decrease over percent to 25 percent over the year. (Exhibit 2.17)
time. By 2021, the proportion of individual borrowing had

Exhibit 2.17: Trend in Active Borrowers by Lending Methodology

Active Borrowers by Lending Methodology

ACTIVE BORROWERS BY LENDING METHODOLOGY

120%

100%
22% 25%
80% 41% 35%
45%
60%

40% 78% 75%

59% 65%
55%
20%

0%
2017 2018 2019 2020 2021
Year

Indvidual Borrowing Group Borrowing

GENDER DISTRIBUTION
Over the timeline of past five years, microfinance sector has shifted of 4 percent- was experienced in women policy holders. On the
its focus on reducing poverty through enhancing gender balance. Microsavings front, women remained unchanged as they
In terms of Microcredit, a mere decrease of 5 percent was constituted 25 percent of the total depositors. (Exhibit 2.18)
witnessed in women clientele whereas contrary trend – an increase

2 1 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 Exhibit 2.18: Outreach to Women – Microcredit, Microsavings and Microinsurance

OUTREACH TO WOMEN: MICROCREDIT, MICROSAVINGS & MICROINSURANCE

60% 53%
53%
48% 51% 48% 50% 49%
Proportion of Total Outreach

50% 46% 46% 45%

40%

30% 25% 25%

22%
19% 20%
20%

10%

0%

2017 2018 2019 2020 2021

Proportion of Women Brorrowers Proportion of Women Deoisitors Proportion of Women Policy Holders

Gender distribution of credit outreach by peer groups depicts that stood at 18 percent of total outreach (Exhibit 2.19). Players with the
while the industry maintains a gender balance, NBMFCs continue most women outreach were NRSP, Kashf Foundation (KF), ASA-P,
to target women clients as 80 percent of their total outreach Akhuwat and Mobilink Microfinance Bank (MMFB). These top 5
comprises of women. On the contrary, women clients for MFBs have a combined outreach of over 2.2 million women borrowers

Exhibit 2.19: Gender Distribution of Credit Outreach by Peer Groups

GENDER DISTRIBUTION OF OUTREACH BY PEER GROUPS

Proportion Outreach - Borrowers -

Proportion of Women Borrowers Proportion of Male Borrowers

20%
56%
82% 80%

44%
18%

MFBS NBMFCS TOTAL

Year

PORTFOLIO DISTRIBUTION
BY SECTOR
A decreasing trend was witnessed in Livestock/Poultry active compared to 17 percent previously, while Services sector also
borrowers with 20 percent and a decrease of 5 percent. Trading experienced a decline in its share by 3 percent to bring it to 8
and housing sector were relatively stable constituting of 19 percent percent. Manufacturing/Production witnessed a similar trend of 3
and 1 percent of the total active borrowers. Agriculture comprised percent to record 5 percent of total outreach. (Exhibit 2.20).
of 14 percent of total outreach by the end of fiscal year 2021,

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 Exhibit 2.20: Distribution of Active Borrowers by Sector

ACTIVE BORROWERS BY SECTOR

Agriculture Livestock/Poultry Trade Services Manufacturing/Production Housing Other

18% 18% 19% 18%

0% 0% 1% 1% 32%
6% 6% 5% 5%
16% 9% 12% 11% 1%
5%
25% 21% 20% 8%
17%
19%
24% 27% 27% 25%
20%

18% 16% 15% 17% 14%

2017 2018 2019 2020 2021

RURAL - URBAN
LENDING
During the period of 2021, there has been a significant changes in Microfinance Bank (MMFB), closing their urban active borrowers at
this indicator. Active Borrowers in the urban areas surged by 23 1.7 million as compared to just 40 thousand in the prior fiscal year
percent whereas active borrowers in rural areas experienced a (2020). On the flip side, Khushhali Bank (KBL), HBL MFB and NRSP
decrease of the same magnitude. Upon deeper analysis, the main remained concentrated in the rural segment of the population.
contributor towards the increase in urban areas is Mobilink (Exhibit 2.21)

Exhibit 2.21: Distribution of Active borrowers by Urban / Rural areas

ACTIVE BORROWERS BY URBAN / RURAL AREA

Urban Rural

49%
53% 51% 53% 62%

49% 51%
47% 47% 38%

2017 2018 2019 2020 2021

YEAR

LOAN PORTFOLIO
BY ASSET TYPE
In the landscape of loan portfolio by asset type, the industry is experienced during the year 2020. At the peer group level, only 33
predominantly supported by unsecured financing which percent of the outreach of MFBs makes up for secured financing
constitutes of 69 percent of total outreach whereas secured which increased by 5 percent (2020: 28 percent), while over 100
financing contributes to 31 percent of the outreach. Comparing to percent increase was experienced in NBMFCs resulting in 28
prior fiscal year, the secured financing has improved by 7 percent. percent of secured borrowing (2020: 14 percent). (Exhibit 2.22)
This primarily reason is the result of Covid-19 impact which was

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 Exhibit 2.22: Loan Portfolio by Asset Type

LOAN PORTFOLIO BY ASSET TYPE

Secured Unsecured

72%
67% 69%
Loan Portfolio by Asset Type

33% 31%
28%

MFBS NBMFCS INDUSTRY

Peer Group

FINANCIAL STRUCTURE

ASSET BASE
The total asset base of the industry registered a growth of 5 asset base constituted of 77 percent of the total asset base closing
percent and locked their asset base at 649 billion PKR. NBMFCs at 501 billion PKR whereas NBMFCs asset base closed at 148 billion
witnessed a significant growth of 21 percent where as MFBs PKR. (Exhibit 2.23, 2.24)
experienced a small increase of 1 percent. On the contrary, MFBs

Exhibit 2.23: Share of Asset Base by Peer Group

SHARE OF ASSET BASE BY PEER GROUP

NBMFCs
23%

MFBs
77%

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 Exhibit 2.24: Total Asset Base of the Industry by peer group

TOTAL ASSET BASE OF THE INDUSTRY BY PEER GROUP

700

600
Total Asserts in PKR Billions

122 148
500
119
400
100
300 83
495 501
200 374
327
100 247

0
2017 2018 2019 2020 2021
Year
MFBs NBMFCs

The asset base of top 10 MFPs rose from 530 million PKR to 629 Akhuwat contributed an increase of 12 million PKR. Overall,
million PKR in their asset portfolio translating the increase of 19 Khushhali Bank (KBL) is leading by closing their asset base at 116
percent during the fiscal year 2021. Among the MFB peer group, billion PKR while HBL MFB closed its asset base at 110 billion
HBL MFB, U Bank and Mobilink Microfinance Bank (MMFB) followed by U Bank with an asset base of 104 million. (Exhibit 2.25)
contributed an amount of 78 million PKR where as NRSP and

Exhibit 2.25: Total Assets of the ten largest MFPs

TOTAL ASSETS OF LARGER MFPS

140
Total Assets (PKR Billions)

116
120 107 110
105
100

80 76
71 69
60 58 56 52
51 53
37 40 32
40
25 28 24 25 24
20

-
KBL HBL MFB U-Bank MMFB NRSP-B TMFB FINCA NRSP Akhuwat Kashf
MFP
2021 2020

FUNDING PROFILE
The trend in the Industry Capital Structure portrayed different trend 2021, 59 percent of the industry’s funding needs were being met by
as compared to previous fiscal year. deposits as shown in Exhibit 2.26. The share of the debt among
the capital structure was recorded at 27 percent, indicating an
While the equity weightage remained constant, but the deposits incline of 7 percent during the year, while the share of equity
experienced a decline while the debt experienced an increase. By remained at 14 percent. (Exhibit 2.26)

2 4 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 Exhibit 2.26: Industry Capital Structure

INDUSTRY CAPITAL STRUCTURE

Proportion of Capital Structure

Equity Debt Deposits

60% 59% 59% 65% 59%

24% 23% 24% 20% 27%

16% 18% 17% 14% 14%

2017 2018 2019 2020 2021

Year

Analyzing the split between capital structure among peer group use the mix of deposits, debt and equity to meet the capital
reveals that MFBs debt reliance increased 6 percent due to the requirements where dependency on deposits is the most
cushion available to prevent liquidity crunch. On the flip side, the considerable tool for MFBs. The trend experienced by NBMFCs
deposits proportion decreased by 5 percent and equity was contrary where element of equity increased by 2 percent while
experienced a similar trend of decrease, but a mere 1 the debt component witnessed a decrease by same magnitude.
percentmagnitude was experienced. Overall, MFBs continues to (Exhibit 2.27)

Exhibit 2.27: Capital Structure by Peer Group

Equity Debt Deposits

81%
76%
72% 70%
Proportion of Capital structure

28% 30%

11% 14%
8% 10%
0% 0%

2020 2021 2020 2021

MFBs NBMFCs

Year and Peer Group

PROFITABILITY & SUSTAINABILITY

During the year, total revenue continued to experience an remains at the top with a huge loss of 10.4 billion PKR, followed by
increasing trend as witnessed over the timeline of five years. NRSP-Bank and FINCA Bank owning a loss of 1.8 billion PKR and
Revenue closed at 123 billion PKR, experiencing significant growth 2.34 billion PKR. PRSP reported a significant loss of 286 million
of 10.63 percent. Profit displayed a negative trend as it reported a PKR from the NBMFCs peer group. On the bright side, five MFPs
loss of 5 billion PKR. Further analysis of the split of profit ndicates closed their profit by reaching or crossing 1 billion PKR. The list
that the MFB peer group recorded a loss of 8.5 billion PKR. In constitutes HBL MFB (2.3 billion PKR), ASA-P (2.3 billion PKR), U
contrast, NBMFCs generated a profit of 4.8 billion PKR. Among the Bank (1.3 billion PKR), MMFB (1.06 million PKR), and KBL (1 billion
list of lost-making MFPs, Telenor Microfinance Bank (TMFB) PKR). (Exhibit 2.28)

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 Exhibit 2.28: Total Revenue & Net Income

PROFITABILITY
140 10 10 12
PKR Billions

PKR Billions
10
120
8
100 6
Total Revenue

Net Income
80 (2) 4
2
60 123
111 111 -
40 89 (2)
(5)
66 (6) (4)
20
(6)
- (8)
2017 2018 2019 2020 2021
Year

Total Revenue Net Income

The impact of huge loss experienced by the sector had a compared -0.7 percent in fiscal year 2020. The underlying reason
considerable impact on Adjusted Return on Equity, changing from for experiencing a small decrease in ROA is primarily due to
-5.0 percent to -7.5 percent, while Adjusted Return on Asset significant increase in asset base as discussed in Exhibit 2.26.
experienced a minor deflection and closed at -1.0 percent as

Exhibit 2.29: Adjusted Return on Assets and Equity

ADJUSTED RETURN ON ASSETS AND EQUITY

25.0%
19.5%
20.0%

15.0%
Adjusted Return

10.0%
3.2%
5.0% 0.7%
-0.7% -1.0%
-1.8%
0.0%
2017 2018 2019 2020 2021
-5.0%
4.3% -5.0%
-10.0% -7.4%
-7.5%
Year

Adjusted Return on Assests (ROA) Adjusted Return on Equity (ROE)

Doing a deeper analysis on ROA and ROE by segregating into peer percent (-1.8%: 2020). The primary reasons for drastic decrease in
groups reveals that ROE has deteriorated for both MFBs and adjusted ROE is due to the huge loss incurred by Telenor
NBMFCs where a slight decrease was experienced by MFB peer Microfinance Bank (TMFB). In the case of NBMFCs, the adjusted
group while NBMFCs experienced a slight increase in Adjusted ROE declined from 6.8 percent (2020) to 6.6 percent (2021). On the
Return on Assets. Further analysis indicates that MFBs contrary, adjusted ROA witnessed a marginal increase of 0.2
experienced a decrease of almost 6 percent, closing the adjusted percent, locking adjusted ROA at 1.9% at the end offiscal year 2021.
ROE at -18 percent (-12.2%: 2020) while ROA decreased from -1.4

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 Exhibit 2.30: Adjusted Return on Assets & Return on Equity by Peer Group

ADJUSTED RETURN ON ASSETS & RETURN ON EQUITY BY PEER GROUP

Adjusted Return on Assests (ROA) Adjusted Return on Equity (ROE)

6.8% 6.6%
Percentage of Return

1.7% 1.9%

2020 2021 2020 2021

-1.4% -1.8%
MFBS NBMFCS

-12.2%

-18.0%
Peer Groups and Years

The ratios of Financial Self-Sufficiency (FSS) and Operational FSS stood at 91.3 percent for MFBs and 117 percent for NBMFCs.
Self-Sufficiency (OSS) of the industrymimicked the trend of Deeper analysis indicates that 3 MFBs ratios were less than 100
adjusted profit of the industry during the year as depicted in Exhibit percent where TMFB was constant while FINCA and NRSPBank
2.31. The FSS dropped from 99 percent previously to 95 percent were added to the list. On the NBMFCs side, Punjab Rural Support
by the end of the year. Similarly, the OSS also dropped from 101 Program (PRSP), Soon ValleyDevelopment Program (SVDP), OPD
percent in the prior year to over 97 percent once again. (Exhibit Support Program and Taleem Finance Company Limited (TFCL)
2.31) In terms of peer groups, MFBs had an OSS of 91.3 percent werebelow the threshold of 100 percent
while NBMFCs maintained the ratio at 107 percent. Similarly, the

Exhibit 2.31: Financial & Operational Self Sufficiency

FINANCIAL & OPERATIONAL SELF SUFFICIENCY

Financial Self Sufficiency (FSS) Operational Self Sufficiency (OSS)

150%
125%
Self Sufficiency

119%
100% 97% 101% 97%

50% 122%
109% 99%
95% 95%
0%
2017 2018 2019 2020 2021
Year

The total revenue ratio experienced a nominal decrease of 1 during the period under review. The significant increase of 17
percent, decreasing to 19 percent. A peer group analysis indicates percent in the average total assets of the industry and average
that the ratio was recorded MFBs ratio decreased from 18.8 Gross Loan Portfolio (GLP) -646 billion PKR and 372 billion PKR-
percent to 17.5 while it stood at 24.6 percent from 24.9 percent for whereas a mere increase in revenue from portfolio -95 billion PKR-
NBMFCs. The Yields on Portfolio also experienced a decline as of 0.6 percent led to the decrease of the discussed ratios. (Exhibit
well, as the Nominal Yield declined from 31 percent to 28 percent 2.32).
whereas the Real Yield dropped from 21 percent to 19 percent

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 Exhibit 2.32: Trend in Yield on Portfolio

YIELD ON PORTFOLIO

Total revenue ratio Yield on gross portfolio (Nominal) Yield on gross portfolio (Real)

40.0% 38%
35%
35.0% 31% 31%
30.0% 33% 30% 28%
23%
25.0% 21%
YIELD

20.0% 24% 17%

23% 22%
15.0% 20%
19%
10.0%
5.0%
0.0%
2017 2018 2019 2020 2021
Year

By the end of the year the total revenue of industry rose from 111 In terms of peer group, the income from loan portfolio of MFBs
billion PKR to 123 billion PKR. An analysis of revenue segments continued to decrease as it experienced a further decline of 7
indicates that revenue from loan portfolio comprised of 78 percent percent resulting in 79 percent of the total MFBs revenue. In
-95 billion PKR-, income from financial assets was 10 percent of the contrast, income from financial services and other sources
total revenue, standing at 12.8 billion PKR and Income from increased its proportion to 8 percent of the total MFBs revenue. On
Financial services was 12 percent of the total revenue standing at 14 the NBMFCs side, the trends were similar. Income from loan
billion PKR. While the figures of total revenue are encouraging, it is declined from 83 percent to 74 percent while the income from
worth noting that the proportion of income from loans declined by financial services and other sources constitutes of 22 percent
7 percent while income of financial services experienced a contrary proportion of the total revenue of NBMFCs
trend of same magnitude. (Exhibit 2.33).

Exhibit 2.33: Revenue Streams

REVENUE STREAMS

Load Portfolio Financial Assets Financial Services

140
Income from activities (PKR Billions)

120
15
5 5 13
100
7 12
5
80 2

60 11
4 95
99 95
40
82
51
20

2017 2018 2019 2020 2021

Year

The trend of key expense ratios as a percentage of total assets loss reserve experienced an increase of 0.5 percent whereas
presented myriad changes. While adjusted loan loss provision adjusted operating expense booked an increase of 0.7 percent.
expense and adjusted operating expense experienced an increase (Exhibit 2.34). The adjusted total expense for the industry stood at
in the ratios, ratios of adjusted total expense and adjusted financial over PKR 129 billion, an increase of PKR 17 billion from the prior
expense experienced a decline. Adjusted total expense year. Out of this figure, PKR 70 billion PKR was classified as
experienced a mere decrease as the number was still 20 percent, operating expenses as compared to PKR 56 billion in 2020. This
however, adjusted financial expense decreased by almost 1.5 was followed by financial expenses of PKR 40 billion PKR, a decline
percent in the fiscal year 2021. The declined is contributed by the of 2 billion PKR from the prior year, and loan loss expense of PKR 19
increase in the average asset as well as the decline in financial billion,an increase of 6 billion PKR from the prior fiscal year (14
expense by 7 percent. On the side of the increase, adjusted loan billion PKR: 2020)

2 8 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 Exhibit 2.34: Trend in Expense Ratios to total assets

EXPENSE RATIO TRENDS

30.0%

25.0% 25.2%

20.0% 20.3% 20.01%

20.1%
18.9%
15.0%
12.6% 13.4%
12.2%
10.0% 10.1% 10.5%
7..9% 7.7%
5.0% 5.2% 5.5% 6.30%
3.9% 2.90%
2.5% 2.5%
0.0% 1..1%
2017 2018 2019 2020 2021

Adjusted Total Exense / Total Assests Adjusted Loan Loss Provision Expense /Total Assets

Adjusted Financial Expense / Total Assets Adjusted Operating Expense / Total Assets

Analysis on the expense side of industry presents increase in all the admin expense standing at 26.5 billion PKR, contributing to almost
indicators. Adjusted Operating Expense to GLP and Adjusted 50 percent in the operating expense. Both operating expense and
Admin Expense to GLP depicted a small increase of 0.7 percent admin expense increased by an amount of 7 billion PKR and 6
and 0.5 percent whereas admin expense surged by 1.1 percent. At billion PKR. Hence contributing to the increase in respective ratios.
the closing of 2021, Operating expense stood at 54 billion PKR with (Exhibit 2.35)

Exhibit 2.35: Trend in Operating Expenses to Gross Loan Portfolio

OPERATING EXPENSES TO GLP

Operating Expense to GLP

22.4%
20.8% 20.2%

15.3% 15.9%
13.8%
11.6% 11.1%
9.2% 8.7% 9.1% 8.7% 8.2%
6.6% 7.7%

2017 2018 2019 2020 2021

Year

Operating Expense / Gross Loan Portfolio Personnel Expense / Gross Loan Portfolio

Admin Expense / Gross Loan Portfolio

PRODUCTIVITY
Personal allocation ratios continued to improve as the ratio saw a were loan officer. (Exhibit 2.36). By the end of the year, the ratio for
marginal rise this year. The sector experienced 2 percent MFBs improved from 46.1 percent to 47.8 percent, whereas
improvement from the previous fiscal year. The total staff employed NBMFCs with the growth of 1 percent, stood at 63 percent.
in the industry closed at 41,384 number. Out of this number, 22,869

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 Exhibit 2.36: Trend in Personnel Allocation Ratio

PERSONNEL ALLOCATION RATIO

Personnel Allocation Raio 55%

Personel Allocation Ratio

53%

52% 52%

49%

2017 2018 2019 2020 2021

Year

The productivity indicators over the last few years have been peer groups, the borrowers per staff for NBMFCs stood at 172 and
consistently improving, where someindicators represented an the loans per loan officer were recorded at 271. In the case of MFBs,
exponential trajectory. Loans per staff ratio witnessed an increase the loans per staff clocked at 208 and the loans per loan officer
from 157 to 191 by the year end. Furthermore, the improved were 435. In contrast, on the deposit side, the growth in deposits
productivity led to an increase in the borrowers per loan officer bore fruit as the number of depositors per staff improved
rising from 294 in 2020 to 346 by 2022. (Exhibit 2.37). In terms of remarkably from 1,347 to 1,796 by the end of the year under review.

Exhibit 2.37: Staff Productivity

PRODUCTIVITY

2,000 1796

1,500 1,347
Productivity

952
1,000 743 758

500 306 307 312 294 346

- 161 157 191

114 159
2017 2018 2019 2020 2021
Year

Loans per Staff Depositors per Staff Loans per Loan Officer

CREDIT RISK
The Portfolio at Risk > 30 days continues to remain below the 5 surge in write offs was observed as the write offs to GLPincreased
percent cut-off. The year saw PAR > 90 days to GLP increased from from 4.6 percent to 5.3 percent by the end of 2021 (Exhibit 2.38).
3.2 percent previously to 4.8 percent where PAR > 90 days The increase in ratios explains the recovery phase from covid-19
depicted the same trend - 2.0 percent to 3.2- percent. Furthermore, impact.

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 Exhibit 2.38: Trend in Portfolio at Risk (PAR) and Write offs

PORTFOLIO AT RISK (PAR) AND WRITE OFFS

6.0% 5.7%

4.6% 4.8%
5.0%
Portfolio at Risk (PAR)

3.9%
4.0%
3.1% 3.2% 3.2%
3.0% 2.6%
2.0%
2.0% 1.6%
1.0% 0.8%
1.0% 0.5%
0.5% 0.6%
0.0%
2017 2018 2019 2020 2021

Portfolio at Risk >30 days - to GLP Portfolio at Risk (>90)-to-days - GLP Write Off Cut off

The increase in the credit risk indicators is derived from the percent to 5.0 percent and NBMFCs rose from 2.7 percent to 4.5
increase in the PAR ratios for 30 days, which can be observed in percent. Furthermore, write offs to GLP increased for MFB peer
Exhibit 2.39. A breakdown by peer group indicated that the ratio group saw a sharp incline, witnessing the change from 4.1 percent
rising trend for MFBs and NBMFCs. Both peer groups witnessed a to 7.7 percent for MFBs while NBMFCs increase was less steep as it
significant increase where MFB PAR > 30 days rose from 3.4 went 0.5 percent to 1.8 percent.

Exhibit 2.39: Credit Risk by Peer Group

MFB NBMFC

7.7%

5.0%

4.2%
4.1%
3.4%

2.7%

1.8%

0.5%

2020 2021 2020 2021

PAR> 30 TO GLP WRITE OFFS TO AVERAGE GLP

3 1 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Section 3
Social Performance
Review
The goal of Pakistan's microfinance industry has been to increase social and development objectives. As a result, the development of
the population's marginalized groups'access to economic social performance indicators is carefully monitored to manage the
opportunities and progress. The industry has remained committed bottom line on both the financial and social fronts.
to meeting the unique requirements of its customers, which
includes integrating Social Performance Management into its The next section will present an overview of the key social
procedures, practices, and operations with an emphasis on steady performance indicators used for monitoring by the microfinance
financial inclusion. A microfinanceinstitution's social performance sector in Pakistan. In this section, the industry trends across various
management demonstrates how successfully it achieves the social Social Performance (SP) indicators like social goals, poverty
objectives mentioned in its purpose and vision. As a result, social targets, governance & HR, diversity in financial and non-financial
performance is measured using a variety of variables, such as the service provision, client protection and environmental protection
target market, governance principles, client safety, the goods and will be analyzed.
services provided, and environmental protection laws.

Without taking into account social and developmental sectors that

need improvement, increasing access to financial services is
unsustainable. Microfinance Institutions (MFIs) have prioritized
these areas, as shown by their participation in a range of social and
development initiatives, such as expanding access to financial
services, fostering the growth of new and existing businesses,
reducing poverty, creating jobs, and advancing gender equality.
These efforts not only support the microfinance industry, but MFIs
alsoutilize them to monitor their success in attaining their own

ANALYSIS OF THE SECTOR’S

SOCIAL PERFORMANCE INDICATORS
The Microfinance Information Exchange (MIX), in collaboration their organizational data using the new MIX social performance
with the Social Performance Task Force(SPTF), has developed an framework. The PMN members that have reported the data
annual social performance reporting framework for MFPs. include 7 Microfinance Banks (MFBs) and 20 Non-Bank
Indicators on institutions' social objectives, target markets, Microfinance Companies (NBMFCs).
governance and HR practices, financial and non-financial services,
and environmental protection are all included in the framework,
which divides social performance into five key areas. The MIX
framework lets MFPs choose from a variety of categories that
are appropriate for their particular institution as self-reported data.
For instance, if women, clients residing in urban regions, teenagers
and adolescents, and clients living in rural areas are relevant to their
operations, the MFI may report to targeting all or none of these
groups within the "target population" sub-section.
At the time of this publication, 26 PMN members have reported

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SOCIAL GOALS

TARGET MARKET
The variety of customer that the MFIs serve is determined by the effectively channeled with the aid of a target market, which can
target market. The target market part of the social performance also help them make the most use of their limited resources.
reporting framework outlines four key categories: "clients living in Identification of the target market must be done in-depth in order
rural regions," "clients living in urban areas," "women," and to provide services that are pertinent, client-focused, and
"adolescent and youth." successful in achieving the goals of a business.

The organization's overarching aim and mission may be more

Exhibit 3.1: Target Market for Peer Groups

TARGET MARKET FOR PEER GROUP

20
18 19

7 6 6
4

MFB NBMFC

Clients living in rural areas Clients living in urban areas

women Adolescents and youth (below 18)

MFPs target markets by peer group which are highlighted in Overall, customers are chosen based on their geography and
Exhibit 3.1 Out of the 10 MFBs that have submitted data, the gender, with women typically receiving preference; some only lend
majority cited several goals, including clientele in urban and rural to women. MFPs coverage in metropolitan regions is 95%, women
locations. 6 of the 7 also stated that they offered services to as a special target market is 84%, and rural areas 100% of the time.
women. All of the 20 NBMFCs that submitted reports target Furthermore, this year NBMFCs clientele added another target
customers in rural regions, with the majority focusing on women market - adolescents and youth (below 18)-. The list includes
and clients in metropolitan areas. Agahe, CSC, JWS and SRSP.

DEVELOPMENT GOALS
The MFIs are seen to have explicitly designed products, services, gender equality and women’s empowerment (19), and
and procedures to achieve their social goals. Increased access to employment generation (18).
financial services remained the top objective of all 27 MFIs closely Supporting the development of start-up enterprises is still a lower
followed by the poverty reduction with 25 MFIs. Other commonly priority as 9 NBMFCs report it as part of their development goals
cited objectives included growth of existing businesses (24), where MFBs remained conservative in this particular objective.

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 Exhibit 3.2: Development Goals

DEVELOPMENT GOALS

MFB NBMFC

20 19
17
12 14

9 3
7 5 6 5 4 4
7 5 2 3

Increased Poverty Employment Development Growth of Improvement Youth Children’s Health Gender Water and Housing
access to reduction generation of start-up existing of adult opportunities schooling improvement equality and sanitation
financial enterprises businesses education women’s
services empowerment

POVERTY TARGETING
Nearly all reporting MFIs aim to reach several challenged extremely poor consumers, while 20 MFIs are shown to target poor
demographic subgroups. According to 27reporting MFPs, clientele. Compared to MFBs, the disproportionately greater
Low-income consumers are, overall, the sector's most prevalent percentage of NBMFCs were seen to lend largely to poor clients
target market in terms of income. Only 7 MFIs reported targeting and very poor clients

Exhibit 3.3: Poverty Targets

POVERTY TARGETS

Very poor clients Poor clients Low income clients

20
18

7 6

2
1

MFB NBMFC

POVERTY MEASUREMENT TOOLS

In Pakistan's microfinance industry, a large number of MFIs have social, and/or other sorts of wellbeing indicators from these clients.
established methods for gauging poverty. These methods use Client poverty levels should be measured and analyzed to aid with
relevant dimensions and indicators, a threshold level, and poverty client targeting, set baselines for clientpoverty for impact
measures to determine the amount of poverty for reporting assessments to follow, evaluate financial services to better meet
measures. For the goal of calculating and/or tracking the degrees client requirements, and gauge the overall efficacy of the program.
of poverty among customers, several methods gather economic,

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 Exhibit 3.4: Poverty Assessment Tools Used by MFPs

POVERTY ASSESSMENT TOOLS USED BY MFPs

7
3

3
3 3 3
1 1 1

Grameen USAID Poverty USAID Poverty Per capita Participatory Own proxy
Progress out of Assessment Tool Assessment Tool household Wealth Ranking poverty index
Poverty Index (PAT) (PAT) income (PWR)
(PPI)

MFB NBMFC

It is clear that MFIs are not confined to the usage of a single model. spending metric (6) and the usage of their own proxy poverty index
As seen in Exhibit 3.1.4, some reporting MFIs utilize a single (4). The USAID Poverty Assessment Tool, the Grameen Progress
approach to determine the levels of poverty, while others use out of Poverty Index, and Participatory Wealth Ranking are some
variety of models. The per capita household income measure is further infrequently used measurements.
used by more MFIs (8), followed by the per capita household

GOVERNANCE AND HR
The entire social goal of microfinance institutions is seen to benefit warranted.
greatly from good governance andhuman resource management To ensure commitment to social goals in the governance structure,
methods. The development of policies to promote the social goals it is essential to make board membersaware of the MFI's social
of theenterprises is indicated by two USSPM standards, which deal mission, have a Social Performance (SP) advocate at the board
with governance and human resource (HR) management. In order level, and have board members with the necessary experience in
to provide MFIs a mechanism to evaluate institutional adherence to Social Performance Management. To this end, themajority of
their social development objectives, the incorporation of social reporting institutions have reported conducting board orientation
performance indicators within governance and HR structures is for their respective social missions.

Exhibit 3.5: Board Commitment to Social Performance Management

BOARD COMMITTMENT TO SOCIAL PERFORMANCE MANAGEMENT

19

17

10

7 7

Board orientation of social SPM champion / committee at Board experience in SPM

mission Board

MFB NBMFC

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While 17 out of 20 NBMFCs indicated that an orientation session is reported having an SPM champion or committee at the board level.
held for their board members, allreported MFBs adhere to the All MFBs and 19 out of 20 NBMFCs indicated compliance on the
practice of orienting board members on the organization's social indication for boardmembers' experience in SPM.
goal.Similar to this, 10 out of 20 NBMFCs and 4 out of 10 MFBs

HR PRACTICES
This evaluation tool examines the relationship between HR policies The average percentage of female representation at various levels
and social performance, the number of clients who get incentives, in microfinance organizations is shown in the last section.
and staff incentives with reference to social performance.
Exhibit 3.6: Staff Incentives Related to SPM

STAFF INCENTIVES RELATED TO SPM

13

11

5
4
3
2

Number of clients Quality of interaction with Quality of social data Portfolio quality
clients based on client collected
feedback mechanism

MFB NBMFC

The quality of social data collected, the quantity of clients indicated that the caliber of the client interactions their employees
entertained by field staff, the quality of interactions with clients had with clients was also related to staff incentives, but none of the
based on client feedback mechanisms, and/or the portfolio quality MFBs claimed that the caliber of the social data that was gathered
maintained by field staff are all ways that staff incentives track the for the same was high.
MFs' adherence to social performance.
Amongst the NBMFC peer group, 11 out of 20 NBMFCs reported
5 out of 7 MFBs in the peer group claimed that their staff incentives that their incentive structure was linked to the number of clients
were based on client volume, while 7 MFBs reported that their while 13 NBMFCs reported that the incentive structure was linked
incentive structures were based on portfolio quality. Only 3 MFBs to the portfolio quality.
Exhibit 3.7: Methods for Calculating Staff Incentives

METHOD FOR INCENTIVING NUMBER OF CLIENTS

Incentive on “client retention” 12

Incentive on “number of new clients” 10

Incentive on “total number of clients” 13

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The second metric examines how MFIs compensate employees certain requirements, or the retention of current clients.
based on social performance indicators; incentives or bonus Exhibit 3.2.4 shows that all MFPs use a combination of these
programs are connected (wholly or partially) to the number of measures for calculating staff incentives, with the most common
clients in field officers' client portfolios. These may be determined being incentives related to “total number of clients” followed by
by the overall number of clients, the number of clients who satisfy number of new clients and then client retention.

Exhibit 3.8: HR Policies Related to Social Performance

HR POLICES RELATED TO SOCIAL PERFORMANCE

Grievance resolution policy 25

Non-discrimination policy 21

anti-harassment policy 27

Safety policy 20

Social protection (medical insurance) 24

The third indicator encompasses the USSPM standards for claiming to have social protection measures in place, such as
responsible treatment of employees. medical insurance, pension contributions, etc., social protection
appears to have slipped down the priority list from last year. In
Exhibit 3.2.5 presents 25 MFIs have policies pertainingto contrast, it appears that the importance of anti-harassment has
employee grievance resolution, and nondiscrimination reporting increased been the top priority of all MFPs as all 27 MFPs
together with excellent HR policies relating to Social Performance. report this factor as an integral component of HR Policies related to
24 MFPs social performance.
Exhibit 3.9: Average Percentage of Females in MFPs

AVERAGE PERCENTAGE OF FEMALES

Number of Personal 13%

Number of Managers 17%

Number of Loan Officers 12%

Number of Board Members 24%

0% 5% 10% 15% 20% 25% 30%

Exhibit 3.2.6 shows that there are on average 24% females who industry.
are board members, 12% females who are loan officers, 17%
females who are managers and an overall 13% females form part of Given that the microfinance industry is largely geared towards
the personnel. These numbers have decreased from last year women borrowers, the sector itself does not have an adequate
except for the number of managers, which rose by 3%. The data for representation of women in day-to-day operations and
this section was available for 27 MFPs, but it can be considered a management, even though it fares slightly better at the board and
representative sample since it includes all the major players in the managerial level.

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 PRODUCTS AND SERVICES: FINANCIAL
Microfinance includes a variety of financial services, such as credit, divided in order to assess how well the financial services and
insurance, and money transfer, forlow-income and underprivileged products are tailored to meet the demands of the customers.
households. This section explains how these items are further

CREDIT
All reporting organizations offer microcredit services, for income-generating purposes as well as for nonincome-generating
(consumption) purposes.

Exhibit: 3.10: Types of Credit Products Offered by MFPs

TYPES OF CREDIT PRODUCTS OFFERED BY MFPs

26 11

Income generating loans Non-income generating loans

As Exhibit 3.3.1.1. shows, 26 of the reporting MFIs offer microenterprise loans, SME loans, agriculture/livestock loans and
income-generating loans, while only 11 MFIs offers non-income express loans. While for the non-income generating loans offered,
generating loans in addition to income-generating ones. the main categories include education loans, emergency loans,
The income generating loans extended by MFIs includes housing loans and other household consumption loans.

Exhibit 3.11: Credit Offerings by Peer Groups

CREDIT OFFERINGS BY PEER GROUP

MFB NBMFC

20
17

6
7 6
2 1

Microenterprise loans SME loans Agriculture/livestock loans Express loans

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Exhibit 3.3.1.2 shows the comparison of MFBs, and NBMFCs with majority of them also extend credit for agriculture/livestock loans.
respect to the category of income generating loans offered to their However, MFIs offering SME and express loans remained the
clientele. All reporting MFIs offer microenterprise loans while same.

DEPOSITS
Given the regulatory structure in Pakistan for savings and time deposit accounts). Exhibit 3.3.2. shows all MFBs relied on
product/deposits, only MFBs can intermediate deposits and hence Time deposit accounts as the major saving product while 5 MFBs
offer voluntary deposit accounts (both demand deposit accounts also relied demand deposit products.

Exhibit 3.12: Savings Products Offering by MFPs

TYPES OF SAVINGS PRODUCTS OFFERED BY MFPs

Demand deposit accounts Time deposit accounts

MFB NBMFC

All MFBs, being regulated banks, are allowed to intermediate client deposits, and thus all reporting MFBs can take deposits.

INSURANCE
Clients in the microfinance industry are becoming more and more available. To satisfy the demands of their customers and to shield
interested in insurance products, and there is enough demand for them from the possibility of losses, the majority of reporting MFIs
MFIs to provide these services. To address the base of the pyramid, provide insurance options.
several micro-insurance solutions are being created and made

Exhibit 3.13: Types of Compulsory Insurance

TYPES OF COMPULSORY INSURANCE

8

7 5

2
1
0

Credit life insurance Life/accident insurance Agriculture insurance

MFB NBMFC

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As Exhibit 3.3.3.1 shows the most common compulsory insurance insurance. Some MFIs offer voluntary insurance products on a
product offered by MFIs to its clients is the credit life insurance needs-basis to customers through partnerships with insurance
product, with almost all MFIs offering it. Other compulsory providers. While most MFBs offer compulsory insurance, there are
insurance products include life/accident insurance and agriculture a few that offer voluntary insurance products as well.
Exhibit 3.14: Types of Voluntary Insurance

TYPES OF VOLUNTARY INSURANCE

3 3 3

2 2

1 1

Credit life insurance Life/accident Agriculture insurance Health insurance

insurance

MFB NBMFC

Exhibit 3.14 demonstrates that optional insurance products voluntary insurances are provided by MFBs. Among MFBs, KBL
include health, life/accident, agriculture, and credit life insurance. provide the most variety which ranges from credit life insurance to
NBMFCs has tapped into other forms of insurance which includes agriculture insurance.
credit life insurance and Life/accident insurance. The majority of

OTHER FINANCIAL SERVICES OFFERED

The provision of debit/credit cards, mobile/branchless banking MFB peer group is the primary supplier of these financial services
services, savings facilitation services, remittance/money transfer among MFPs, offering clients the most popular financial services
services, payment services, micro-leasing, and such as debit/credit cards, branchless banking, payments, and
scholarship/educational awards are only a few of the other financial money transfer services.
services provided by MFPs. Exhibit 3.3.4 demonstrates that the

Exhibit 3.15 Types of Financial Services Offered

TYPES OF FINANCIAL SERVICES OFFERED

0
0
1
0

5 5 3 3 4

Debit Card/Credit card Mobile/branchless Savings facilitation Remittance/money Payment services

banking services services transfer services

MFB NBMFC

However, some NBMFCs are also offering clients other services such as, mobile/branchless banking services while some are extending
support to clients through savings facilitation.

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 PRODUCTS AND SERVICES: NON-FINANCIAL
NBMFCs often provide their consumers with non-financial new ones to assist their businesses. These can be in the form of
services in addition to financial services. MFIsprovide these commercial and/or technical skill training, as well as the provision
non-financial services in order to increase their customers' ability of fundamental services like health and education. These services
to combat poverty and improve their standard of living. These are divided into four primary areas for analysis: enterprise,
services may involve the empowerment of women, education, health, and women's empowerment.
entrepreneurship training, and business administration education,
among other things. The institution may provide non-financial NBMFCs are more active in offering all forms of non-financial
services on its own or in conjunction with another party. Depending services in the market, especially those devoted to a specific social
on capacity and ambition, each institution offers a different set of purpose, as opposed to MFBs, which have a lead in the supply of
talents, but the main goal is always to aid customers in acquiring other financial services. (See Exhibit 3.3.5.).

Exhibit 3.16 Non-Financial Services Offered

NON FINANCIAL SERVICES OFFERED

15 14 16

4
0 2 2

Health Services Education Services Women’s Enterprise Services

Offered Offered Empowerment Offered
Services Offered

MFB NBMFC

With an emphasis on financial literacy education, the MFB peer services. It is noted that NBMFCs have also shifted their focus on
group has principally focused its effortson the delivery of Enterprise services. A few NBMFCs also provide basic medical and
educational services. NBMFCs frequently offer services related to specialized medical services for women and children, among other
education and women's empowerment, followed by health health services.

TRANSPARENCY OF COST
One of the financial service provider's main responsibilities is to working to provide this information to borrowers in a standardized
provide price transparency. For good consumer protection, social manner that permits comparison and streamlines the
performance, and responsible microfinance, it is seen as a decision-making process.
necessary prerequisite. The microfinance industry as a whole is

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 Exhibit 3.17: Method to State Service Cost by Peer Group

METHOD TO STATE SERVICE COST BY PEER GROUP

13

10

MFB NBMFC

Declining balance interest method Flat interest method

As of 2021, majority MFIs reported utilizing the flat technique for the loan principal which the borrower has not yet repaid thus,
determining interest rates, while few MFIs reported using the reducing the burden of interest payment on borrowers and leading
decreasing balance method. It is observed that a sizable portion of to greater economic empowerment.
MFIs in Pakistan continue to communicate prices to clients using
the flat methodology, in which interest rates are communicated All MFBs in Pakistan are required by State Bank of Pakistan (SBP) to
based on the stated initial principal amount of the loan, regardless disclose the interest cost to theborrower. Exhibit 3.3.6. shows that
of the payment plan. However, the number of MIFIs giving flat 5 MFBs use the declining balance interest method and 3 MFBs use
interest rates has reduced whilst the number of MFPs offering the flat interest method. It is also seen that 5 NBMFCs use the
decreasing balance has grown compared to previous year. This declining balance interest method while 10 NBMFCs use the flat
shift towards declining balance method is encouraging as the interest method. It is noted that few NBMFCs use both methods.
interest calculated through this method is based on the amount of

CLIENT PROTECTION (CP)

There are seven all-encompassing principles of client protection violations, clear reporting systems, and data
developed by the SMART Campaign4: An international consortium privacy clauses were among the criteria used to analyze the sector
of microfinance stakeholders focusing on pricing transparency, with regard to client protection. Othercriteria included internal
which include the following: audit compliance. Overall, the industry exhibits strong compliance
• Appropriate product design and delivery to CP principles, notably with almost all reporting MFIs exhibiting
• Prevention of over-indebtedness compliance on disclosure of pricing and APR and contracts having
• Transparency data protection clauses. The majority of MFIs also have established
• Responsible pricing rules of conduct and transparent methods for addressing
• Fair and respectful treatment of clients customer complaints. All reporting banks exhibit complete
• Privacy of client data compliance with the fundamental CP indicators due to the
• Mechanisms for complaint resolution regulatory framework established by State Bank, under which
APR disclosure, full pricing terms disclosure, code of conduct MFBs fall.

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 Exhibit 3.18: Client Protection Indicators

CLIENT PROTECTION INDICATORS

22 24 26 26 26 26 27 27

Policies Internal Audit Prices, Annual Code of Violation of Clear Contracts

Supporting Verify Installments, Percentage Conduct is code of Reporting include a Data
Good Compiance Terms and Rates (APR) of Clearly Defined conduct System for Privacy Clause
Repayment with Policies Conditions Loan Products Sanctioned Clients’
Capacity Fully Disclosed Disclosed Complaints
Analysis to Clients

ENVIRONMENTAL POLICIES
The idea of reaching a triple bottom line— accomplishing an provided. These environmental policies cover MFPs' efforts to raise
objective of environmental and social goals in addition to the consumer awareness of environmental effects, their possession of
financial targets—by adding environmental and social the tools required to assess the environmental risks posed by their
performance management has gained popularity in recent years. clients' activities and goods, and their inclusion of loan contract
The indicators examined in this study may be generally divided into clauses that guarantee the reduction of environmental risks
two categories: the existence of environmental legislation and the through their clients' businesses and particular loans associated
kinds of environmentally friendly goods and/or services that are with environmentally friendly goods.

Exhibit 3.19: Environmental Policies in Place

ENVIROMENTAL POLICIES IN PLACE

17

13
11
8
5
5 5
2

Awareness raising on Clauses in loan contracts Tools to evaluate Specific loans linked to
enviromental impacts requiring clients to improve enviromental risks of enviromentally friendly
enviromental client activies producds and/or practices
practices/mitigate
enviromental risks

MFB NBMFC

Exhibit 3.19 shows that a significant number of NBMFCs have working on the later.
policies in place to promote environmental protection. The most
common area within the domains of environment being addressed At sector level, as evident from Exhibit 3.5.1. there is a growing
by NBMFCs are ‘awareness raising on environmental impacts’ and focus on developing tools to evaluate environmental risks of clients
requiring clients to improve environmental practices as a total of 17 as well as on provision of specific loans linked to environmentally
NBMFCs are working on the former whereas 13 NBMFCs are friendly products and/or practices.

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 Exhibit 3.20: Environmentally Friendly Products/Services Offered

ENVIROMENTALLY FRIENDLY PRODUCTS/SERVICES OFFERED

11

3 3

0 0

Products related to Products related to energy Products related to

renewable energy (e.g. solar efficiency (e.g. insulation, enviromentally friendly
panel, biogas digesters etc) improved cooking stove etc) practicies (e.g. organic
farming, recycling, waste
managemnt etc)
MFB NBMFC

Exhibit 3.20 shows that within the category of providing loan products for adopting environmentally friendly practices,
environmentally friendly loans, the most common loan product however, more focus needs to be given to products related to
being offered relates to renewable energy with a total of 14 MFIs energy efficiency.
focusing on this aspect. A rising number of MFIs is also focusing on

CONCLUSION
The examination of the present section demonstrates that there is sizable market to tap into, especially among the younger
a persistently strong commitment to enhancing social demographic, and tailoring goods and services to these markets
performance and meeting the requirements of the many socially might go a long way toward achieving the aim of national financial
excluded groups. The industry has a good trend for the majority of inclusion.
measures, particularly for board commitment to social
performance management, HR policies and Client protection. The industry has the ability to make a big contribution in offering
These institutional-level indicators suggest that social insurance products to the lower-income group. Expanding
performance indicators are regularly supervised, reported on, and insurance services is necessary to meet the broader range of risks
monitored at the highest level to guarantee compliance in that susceptible clients face, especially those related to the
management and operations. However, the industry must actively agricultural sector where the vulnerabilities of underprivileged
pursue a policy of boosting the representation of women at all farmers are multiplied as a result of climate change. The population
levels of operations. In addition to increasing the number of women in the low-income sector has been disproportionately affected by
employed, this will improve the microfinance sector's reputation as the recent pandemic, floods, and locust assaults; thus, there is a
a sector that promotes equal employment opportunities. demand for insurance products that may function as a buffer
Additionally, it can result in the introduction of better guidelines and against such shocks. To meet the insurance demands of its clients,
services created to better meet the requirements of female MFPs might alter and expand the volume and range of insurance
consumers and borrowers. products supplied. To enhance the use of insurance products by
clients, MFPs should also spread knowledge of the advantages
The target market for microfinance includes a sizeable section of and applications of both new and current insurance products. The
the low-income and impoverished populations in both urban and microfinance sector should broaden its operations and focus on
rural regions, with considerable attention paid to very poor social enterprises and impactoriented companies in order to
customers as well. Along with reducing poverty, enhancing access increase the industry's reach. Low-cost private schools, affordable
to financial services, and fostering the expansion of credit housing, renewable energy initiatives, agricultural value chains,
outreach, the sector actively focuses on women's emancipation micro-enterprise loans, etc. are a few examples of these
through specially created goods and services. However, there are enterprises. In addition to broadening the audience served, this
certain underrepresented and neglected groups, including young would also diversify the product mix, which would help the MFPs
people, LGBTQ people, and people with impairments. There is a achieve their triple-bottom-line objectives.

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Section 4
The Way Forward
NANO LENDING IN PAKISTAN
Alternative lending solutions are growing in emerging markets with the terms and conditions of the loans are transparent.
large financially excluded populations.Digital credit offerings are
growing in these markets at a rapid pace. They offer fully Many such players have been active in Africa and have also entered
automated shortterm loans to the consumers which provide them the Pakistani markets. Several existing players in addition to new
access to liquidity. Nano lending or nano loans, therefore, means players have started offering nano loans in the country. These
very nominal loans in monetary amounts. A step towards financial players include both telcos based MFBs as well as new entities
inclusivity, the scheme aims to offer small, collateral-free loans to structured as Non-Bank Finance Companies (NBFCs) under the
marginalized individuals who do not have the wherewithal or the Securities & Exchange of Pakistan. While numbers for nano loans
inclination to get themselves attached to a bank account. Artificial are hard to come by but in the country where 30 percent of the
intelligence determines their creditworthiness, and the loan population has access to the internet via smartphones and only 2
provider disburses the sanctioned amount to the borrower’s percent have access to formal financial services. With a supportive
account within a couple of minutes without any human ecosystem including a payments system, creditbureaus, and
involvement. unique ID, growth in nano lending is natural.
However, given low levels of financial and digital literacy and the
As the name implies, the amount of Nano-Finance is small. It can relatively new area for regulatory oversight, clients are vulnerable to
meet your needs for emergency hospitalization, help you with cash being exploited. Moreover, the advent of unlicensed nano-lending
flow shortages for your home expenses and if you are a roadside apps and their predatory operating (incomplete sentence) To
hawker, you might get enough funds to meet your weekly business mitigate such risks, players need to invest in digital and financial
expenses. The money is disbursed via mobile wallets or through a literacy while regulators need to proactively block unlicensed apps
branchless banking agent. Nano-Finance carries a high risk of and a separate regime for nano lending may be incorporated. With
default. To mitigate the risk, Nano-Finance companies offer loans digital lending all set to become part of the financial landscape
at higher rates. These companies need to maintain a NET-positive shortly, a combination of responsible practices by practitioners and
cash flow to operate. The benefit to the applicant is that the loan is regulatory oversight of nano lending can provide a solid foundation
processed by companies that work in a regulated industry. Also, for it.

MICROFINANCE IN POST-COVID ERA

Pakistan was spared the worst of the pandemic Covid 19 in the last field operations remained confined for the microfinance players for
two years through a mix of indigenous strategies of smart the initial few months.
lockdowns and timely vaccination, however, over 1.5 million people Policymakers and regulators remained cognizant of the challenges
were affected by the virus with deaths of over 30 thousand. Normal brought up by the pandemic. To provide relief, the Ministry of
life and the economy were disrupted. The microfinance industry Finance brought up substantial relief packages for SME and a
was also impacted by Covid. Initially, NBMFCs were not included in salary & wages scheme was introduced for entities to meet their
the essential services and 63 their operations were halted for a few payroll obligations. While NBMFCs were eligible for the salary &
weeks. Moreover, despite the gradual opening of the economy, wages scheme, however, no package like SMEs was extended to

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the microfinance sector. Moreover, both the regulators (SBP and diverting their focus toward their sustainability.
SECP) encouraged the microfinance providers to provide relief to
the customer in terms of deferments and rescheduling of the For microfinance players to grow and expand their outreach
outstanding loans. especially mid-sized and smaller entities require liquidity which can
be in form of either direct funding lines or guarantee funds allowing
While many of these steps were taken with good intent, their them to borrow commercially at favorable terms. Smaller entities
impact was adverse. Deferred and rescheduled loans going up to a particularly those which are not for profit may require blended
year had an unintentional consequence of affecting the credit finance facilities to shore up their financial positions. Institutes
discipline among the clientage. The relief was misperceived as needing recapitalization shall require equity and quasi-equity
write-offs resulting in delinquencies for players. With the moratoria funds to be routed to them to strengthen their balance sheets.
and payment holidays ending, practitioners have been forced to
write off delinquent loans which have reduced profitability and Moreover, to put the industry on the path of growth, first-loss
even hit the capital adequacy of some of the players. At a time guarantees need to be in place. Funds for such facilities can be
when microfinance players are needed to play an instrumental role generated through multilateral or government and may be routed
in rebuilding the economy, the losses incurred have resulted in through the national apex.

DIGITAL BANKING IN PAKISTAN

Digital banking can be defined as the digitization of all the banking and regulatory framework for digital banks in Pakistan. Initially, SBP
services that were normally available inside brick-and-mortar bank plans to offer two types of licenses namely Digital Retail Bank
branches. Keeping in view the advancements in technology and (DRB) and Digital Full Bank (DFB). DRB will be focused on retail
changing customer preferences especially buoyed by the Covid-19 clientage whereas DFB can not only meet the requirements of retail
pandemic most of the banks have shifted to online banking. clients but also serve business and corporate clients.
64 As per reports up to 20 applications have been received for
While the two words online banking and digital banking are used digital banking licenses under the framework whereas SBP plans
interchangeably and considered synonymous, online banking is a to initially issue 5 licenses. Applicants include conventional and
limited set of services that allows money transfers, bill payments, Islamic banks, fintech and telcos, and international players.
and online management of accounts. On the contrary, digital
banking encapsulates digitization at each level from the front to the A2F in Pakistan can be accelerated through the introduction of
back end. Not only can a customer make payments and deposits digital banking like in other countries across the region and the
but also apply for loans and other financial services. globe. The new licensing regime offers opportunities to existing
banks to convert into digital players, EMI and fintech to scale up
Digital banking offers a cost-effective solution to promote financial and global players in the field to bring their experience to the
inclusion in a country like Pakistan where access to finance is quite country. However, it must be kept in mind that becoming a digital
low. It can be used to provide credit to unserved segments, reduce bank requires a special mindset and innovative culture to make an
intermediary costs, encourage innovation, and improve customer impact and succeed in its mission.
experience. Keeping the above in view, SBP has launched licensing

FUNDING LANDSCAPE FOR THE

MICROFINANCE INDUSTRY
Funding needs for the microfinance industry vary by peer groups. requirements of minimum capital and capital adequacy.
While MFBs have been successfully mobilizing retail and fixed NBMFCs continued to rely on the national apex PMIC, international
deposits over those last few years, they have recently begun to lenders, and local commercial banks to meet their funding needs.
shore up their capital base by issuing Tier 2 capital and injection of Borrowing was capped from PMIC due to single-borrower limits
equity among certain players. Three MFBs issued Tier 2 capital to imposed by SECP which pushed NBMFCs to borrow from
strengthen their balance sheets and meet the regulatory commercial and international lenders. International borrowing

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though expensive but convenient remains popular with NBMFCs. bottom of the pyramid.
Lending from commercial banks remained a challenge with
continued low uptake in private-sector credit, concerns about Similarly, keeping in view the stress on the housing sector in the last
NBMFCs governance, internal controls, and MIS, and a low level of few years, the microfinance sector was also encouraged to enter
understanding of industry dynamics. the low-cost housing segment by the policymakers and regulators
with a Tier 0 category specially created for them. Being a new
Given these challenges previous government’s launch of the segment, the microfinance sector began gearing to serve the
Kamyab Pakistan Program (KPP), ensured a steady stream of segment and introduce it as a new asset class in their loan offerings
financing for the microfinance industry with the GOP guaranteeing to clients. Several capacity-building initiatives were carried out by
100 percent exposure of the commercial banks on the retail PMRC, PMN, and the entities themselves. PMRC not only extended
players, however, with the government subsidizing operating & mortgage refinancing lines to MFBs but also to a couple of
financing costs as well it could have led to a major disruption in the NBMFCs to promote affordable housing. Combined with interest
industry and crowd out conventional microfinance in the country. rate and operating cost subsidy being borne by the GOP, the
Initially, 5 entities received funds from leading commercial banks scheme received a good response. However, due to GOP’s
before the scheme was discontinued due to the change in the financial difficulties the scheme is currently on hold, going forward
administration. However, this showed that wholesale guarantees affordable housing will remain an area of focus for microfinance
offered to commercial banks either by SBP or MoF can ensure a players.
steady stream of funds to the sector and promote A2F at the

OPEN BANKING
The conventional banking industry can be revolutionized by open their finances. Although open banking is not a new concept, but it
banking. Open banking utilizes the Application Programming has been making waves in the financial industry for the past few
Interface (APIs) to securely share financial data with other financial years only. Aion, a financial service provider, combines artificial
institutions. intelligence with data insights to help customers in building a
budget and managing their money. In the U.S., open banking is led
Use of open banking APIs has facilitated the users in easily by the industry. The commercial opportunity has been identified by
switching between one bank's checking account service to the banks themselves and they have initiated services that allow
another bank’s service. Open banking’s secure APIs give access to the customers to share their data securely. As a result, Fintechs are
the third-party to access customer’s data and use it to provide accessing people’s data and providing them with improved and
consolidated information in different forms. Customer’s tailored financial services. In Europe, open banking is often
transaction data can be used to identify a tailored financial product regulation-driven. The EU revised the Payment Services Directive
and services for them. For example, a new savings account that (PSD2), from 2019 onwards, it was mandated that all banks will
would provide a better interest rate as compared to the current allow their customers to securely share their account information
savings account or details about a new credit card with a lower with other financial service providers. A financial services provider
interest rate. Lenders will also be able to get a clearer picture of in Australia is able to provide a holistic view of the customer’s
customer’s financial situation and risk level thus allowing them to finances and offer tailored products as the regulations there go
offer loans in profitable terms. Similarly, customer’s will also be able further - savings accounts, investment accounts and pension
to see the accurate picture of their finances before applying for a accounts are all in scope, with plans to include utility, telecom, and
debt. This will be gathered through the data available in their travel data connections in the future. Meanwhile, the central bank in
accounts. Small businesses can also benefit by saving time Nigeria introduced a legal framework to regulate its previously
through online accounting and aid companies in fraud detection by industry-led effort.
monitoring customer accounts and identifying problems sooner. London-based IWOCA uses customer income and spending
Due to open banking, smaller and newer banks will be able to history to improve credit decisioning and offer flexible and
compete with large, established banks by reducing costs, customized loan payback schedules. Technology-focused lending
providing better technology, and better customer service. The aggregators like Funding Xchange reduce the loan origination
conventional banks in addition to the smaller and new banks will timeline by automating and standardizing the way loan
innovate and adopt new technology, thus strengthening customer applications are qualified, submitted, and processed. The
relationships and retention. The orthodox idea of simply facilitating company uses open-banking transaction data to better evaluate
transactions will be replaced by helping customers in managing an SME’s eligibility and affordability against the appetite of lenders

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in its marketplace and is accessible by banks, lenders, lessors, and platform connects to each financial institution individually and
brokers. Approximately one-third solutions are being targeted exposes the data through a unified and secure API for identity,
towards SMEs. The SMEs are eagerly waiting for solutions that financial, income and employment data. The platform provides this
aggregate payments and other financial services into their current access in a fast, compliant, secure and trusted manner.
systems such as the integration of bank accounts, tax, accounts FinTech companies, banks and other companies providing
and reconciliation activities in one place. Fintechs like financial products can build their services on top of this platform. It
FriendlyScore and BudgetBakers let the businesses monitor their is expected that the consumer will welcome such a hassle-free
financial standing and plan accordingly from one portal. There is a service as they will not have to perform cumbersome manual tasks
clear opportunity in the SME market as there are very few options to get access to a financial product or service. Instead, through the
that are providing solutions to SMEs in areas of lending and finance Prosper platform, the task becomes digitally streamlined and
management. access to a financial product or service can be obtained within
seconds. Using open banking, small loans and credit can also be
66 State Bank of Pakistan (SBP) has been working on open provided to customers (people and businesses) who didn’t have
banking in Pakistan. The working plan has been designed using access to these services in the past. Lenders require credit
World Bank’s assistance and will soon be materialized. Open histories and up-to-date information that can be stead fasted
banking will change how customers interact with banks and other through open banking. It can show that these entities are
financial services in Pakistan. It aims to bring digital financial tools creditworthy through different aspects. For example, the lenders
to more people, thus also increasing the financial inclusion in the can be provided access to their payroll data or history of regular
country. Prosper Technologies provides a cloud platform that rent payments or overall cashflow. Thus, allowing the lending
allows users to, only with their explicit consent, easily share their organizations in disseminating funds easily.
financial data with the business of their choice. The Prosper

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Annexure
Annex A:
Sources of Data
A. Microfinance Banks (MFBs)
A.1. ADVANS Pakistan Microfinance Bank Limited (ADVANS)
• A.F. Ferguson & Co. Chartered Accountants audited the annual accounts of ADVANS for the year
ending on 31st December 2021. The numbers reported in the PMR match these audited accounts
• The financial statements have been presented as per the requirements of the State Bank of Pakistan.
• The related party transactions have been properly disclosed in notes to the financial statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region
(rural/urban) and by sex; number of staff; number of credit officers; and number of branches (as highlighted in
the audited accounts).

A.2. FINCA Microfinance Bank Limited (FINCA)

• KPMG Taseer Hadi and Co. audited the annual accounts of FINCA for the year ending at 31st December 2021. The numbers
reported in the PMR match these audited accounts.
• The financial statements have been presented as per the requirements of the State Bank of Pakistan.
• The related party transactions have been properly disclosed in notes to the financial statements.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

A.3. HBL Microfinance Bank Limited (HBL MFB)

• KPMG Taseer Hadi and Co., Chartered Accountants audited the annual accounts of HBL MFB for the year ending at 31st
December 2021. The numbers reported in the PMR match these audited accounts.
• The financial statements have been presented as per the requirements of the State Bank of Pakistan.
• The related party transactions have been properly disclosed in notes to the financial statements.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; portfolio aging; number of staff; number of credit officers; and number of branches (also available in audited accounts).

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A.4. Khushhali Microfinance Bank Limited (KBL)
• EY Ford Rhodes audited the annual accounts of KBL for the year ending at 31st December 2021. The numbers reported in the
PMR match these audited accounts.
• The financial statements have been presented as per the requirements of the State Bank of Pakistan.
• The related party transactions have been properly disclosed in notes to the financial statements.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; portfolio aging; number of staff; number of credit officers; and number of branches (also available in audited accounts).

A.5. Mobilink Microfinance Bank Limited (MMFB)

• EY Ford Rhodes audited the annual accounts of MMFB for the year ending at 31st December 2021. The numbers reported in the
PMR match these audited accounts.
• The financial statements have been presented as per the requirements of the State Bank of Pakistan.
• The related party transactions have been properly disclosed in notes to the financial statements.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; portfolio aging; number of staff; number of credit officers; and number of branches (also available in audited accounts).

A.6. National Rural Support Programme Microfinance Bank (NRSP-B)

• A.F. Ferguson & Co., Chartered Accountants audited the annual accounts of NRSP-B for the year ending at 31st December 2021.
The numbers reported in the PMR match these audited accounts.
• The financial statements have been presented as per the requirements of the State Bank of Pakistan.
• The related party transactions have been properly disclosed in notes to the financial statements.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; portfolio aging; number of staff; number of credit officers; and number of branches (also available in audited accounts).

A.7. Pak-Oman Microfinance Bank (POMFB)

• EY Ford Rhodes audited the annual accounts of POMFB for the year ending at 31st December 2021. The numbers reported in
the PMR match these audited accounts.
• The financial statements have been presented as per the requirements of the State Bank of Pakistan.
• The related party transactions have been properly disclosed in notes to the financial statements.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; portfolio aging; number of staff; number of credit officers; and number of branches (also available in audited accounts).

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A.8. Sindh Microfinance Bank Limited (SMFB)
• Naveed Zafar Ashfaq Jaffery & Co. audited the annual accounts of SMFB for the year ending at 31st December 2021. The
numbers reported in the PMR match these audited accounts.
• The financial statements have been presented as per the requirements of the State Bank of Pakistan.
• The related party transactions have been properly disclosed in notes to the financial statements.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; portfolio aging; number of staff; number of credit officers; and number of branches (also available in audited accounts).

A.8. Sindh Microfinance Bank Limited (SMFB)

• Naveed Zafar Ashfaq Jaffery & Co. audited the annual accounts of SMFB for the year ending at 31st December 2021. The
numbers reported in the PMR match these audited accounts.
• The financial statements have been presented as per the requirements of the State Bank of Pakistan.
• The related party transactions have been properly disclosed in notes to the financial statements.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; portfolio aging; number of staff; number of credit officers; and number of branches (also available in audited accounts).

A.9. Telenor Microfinance Bank Limited (TMFB)

• EY Ford Rhodes audited the annual accounts of TMFB for the year ending at 31st December 2021. The numbers reported in the
PMR match these audited accounts.
• The financial statements have been presented as per the requirements of the State Bank of Pakistan.
• The related party transactions have been properly disclosed in notes to the financial statements.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The auditors have drawn attention to a material uncertainty in relation to going concern, based on losses incurred by the bank
during the prior and this financial year.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; portfolio aging; number of staff; number of credit officers; and number of branches (also available in audited accounts).

A.10. U Microfinance Bank Limited (Ubank)

• KPMG Taseer Hadi and Co. audited the annual accounts of U-Bank for the year ending at 31st December 2021. The numbers
reported in the PMR match these audited accounts.
• The financial statements have been presented as per the requirements of the State Bank of Pakistan.
• The related party transactions have been properly disclosed in notes to the financial statements.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; portfolio aging; number of staff; number of credit officers; and number of branches (also available in audited accounts).

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B. Non-Bank Microfinance Companies (NBMFCs)
B.1. ASA Pakistan limited (ASA-P)
• EY Ford Rhodes have audited the annual accounts of ASA-P for the year ending at 31st December 2021. The numbers reported
in the PMR match these audited accounts.
• ASA-P prepares its financial statements under the historical cost convention and in conformity with accepted accounting
practices.
• All necessary adjustments to ASA-P data have been made in order to remove subsidies.
• There is proper disclosure in the balance sheet of the loan portfolio and loan loss provision; expense charged during the year is
disclosed in the income statement.
• Related-party transactions have been properly disclosed in notes to the financial statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; portfolio aging; number of staff; number of credit officers; and number of branches (also available in audited accounts).

B.3. Akhuwat Islamic Microfinance (Akhuwat)

• Deloitte Yousuf Adil has audited the annual accounts of Akhuwat for the year ending at 30th June 2021. The numbers reported
in the PMR match these audited accounts.
• Akhuwat prepares its financial statements under the historical cost convention and in conformity with accepted accounting
practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex.

B.4. CSC Empowerment & Inclusion Programme (CEIP)

• Riaz Ahmad & Co. audited the annual accounts of CSC for the year ending at 30th June 2021. The numbers reported in the PMR
match these audited accounts.
• All necessary adjustments to CSC data have been made in order to remove subsidies.
• CSC prepares its financial statements under the historical cost convention and in conformity with accepted accounting
practices.
• Grant income has been properly disclosed in financial statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; portfolio aging; number of staff; number of credit officers; and number of branches (also available in audited accounts).

B.5. Damen Support Programme (DSP)

• A.F. Ferguson and Co. audited the annual accounts for DAMEN for the year ending at 30th June 2021. The numbers reported in
the PMR match these audited accounts.
• DAMEN prepares its financial statements under the historical cost convention and in conformity with accepted accounting
practices.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; aging on number of loans and value of portfolio (verifiable from audited accounts); number of loans doubtful; number of
staff; number of credit officers; and number of branches.

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B.6. Farmer Development Organization (FDO)
• Mudassar Ehtisham & Co. audited the annual accounts for FFO for the year ending at 30th June 2021. The numbers reported in
the PMR match these audited accounts.
• All necessary adjustments to FFO data have been made in order to remove subsidies. There is no adjustment on loan loss
provisioning expense as FFO is aggressive in its policies.
• FFO prepares its financial statements under the historical cost convention and in conformity with accepted accounting
practices.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; aging on number of loans and value of portfolio; number of staff; number of credit officers; and number of branches.

B.7. FFO Support Program (FFO)

• Rahman Sarfraz Rahim Iqbal Rafiq Chartered Accountants audited the annual accounts for FFO for the year ending at 30th June
2021. The numbers reported in the PMR match these audited accounts.
• All necessary adjustments to FFO data have been made in order to remove subsidies. There is no adjustment on loan loss
provisioning expense as FFO is aggressive in its policies.
• FFO prepares its financial statements under the historical cost convention and in conformity with accepted accounting
practices.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; aging on number of loans and value of portfolio; number of staff; number of credit officers; and number of branches.

B.8. Ghazi Barotha Taraqiati Idara (GBTI)

• BDO Ebrahim & Co. audited the annual accounts for GBTI for the year ending at 30th June 2021. The numbers reported in the
PMR match these audited accounts.
• GBTI prepares its financial statements under the historical cost convention and in conformity with accepted accounting
practices.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• There is proper disclosure in the balance sheet of the loan portfolio and loan loss provision; expense charged during the year is
disclosed in the income statement.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; aging on number of loans and value of portfolio (not verifiable from audited accounts); number of staff; number of credit
officers; and number of branches.

B.9. JWS Pakistan (JWS-P)

• Rahman Sarfraz Rahim Iqbal Rafiq Chartered Accountants audited the annual accounts for JWS for the year ending at 30th
June 2021. The numbers reported in the PMR match these audited accounts.
• JWS prepares its financial statements under the historical cost convention and in conformity with accepted accounting
practices.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; aging on number of loans and value of portfolio (verifiable from audited accounts); number of staff; number of credit
officers; and number of branches (also available in audited accounts).

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B.10. Kashf Foundation (Kashf)
• EY Ford Rhodes audited the annual accounts for Kashf for the year ending at 30th June 2021. The numbers reported in the
PMR match these audited accounts.
• The financial statements have been presented as per the requirements of the Securities & Exchange Commission of Pakistan.
• All necessary adjustments to KF data have been made in order to remove subsidies.
• Kashf prepares accounts on historical cost basis using the accrual system of accounting.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

B.11. Mojaz Support Program (MOJAZ)

• BDO Ebrahim & Co. has audited the annual accounts of Mojaz for the year ending at 30st June 2021. The numbers reported
in the PMR match these audited accounts.
• MOJAZ prepares its financial statements under the historical cost convention, in conformity with accepted accounting
practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

B.12. National Rural Support Programme (NRSP)

• KPMG Taseer Hadi and Co. has audited the annual accounts of NRSP for the year ending at 30th June 2021. The numbers
reported in the PMR match these audited accounts, which were provided to PMN by NRSP.
• NRSP prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

B.13. OPD Support Program (OPD)

• Grant Thornton Anjum Rahman & Co. has audited the annual accounts of OPD for the year ending at 30th June 2021. The
numbers reported in the PMR match these audited accounts.
• OPD prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

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B.14. Punjab Rural Support Programme (PRSP)
• EY Ford Rhodes audited the annual accounts for PRSP for the year ending at 30th June 2021.
• All necessary adjustments to PRSP data have been made in order to remove subsidies.
• PRSP prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

B.15. Rural Community Development Program (RCDP)

• BDO Ebrahim & Co. has audited the annual accounts of Mojaz for the year ending at 30st June 2021. The numbers reported
in the PMR match these audited accounts.
• MOJAZ prepares its financial statements under the historical cost convention, in conformity with accepted accounting
practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

B.16. SAFCO Support Foundation (SAFCO)

• Deloitte Yousuf Adil audited the annual accounts for SAFCO for the year ending at 30th June 2021. The numbers reported in
the PMR match these audited accounts.
• All necessary adjustments to SAFCO data have been made in order to remove subsidies.
• SAFCO prepares its financial statements under the historical cost convention and in conformity with accepted accounting
practices.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; and number of credit officers.

B.13. OPD Support Program (OPD)

• Grant Thornton Anjum Rahman & Co. has audited the annual accounts of OPD for the year ending at 30th June 2021. The
numbers reported in the PMR match these audited accounts.
• OPD prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

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B.18.Sindh Rural Support Organisation (SRSO)
• BDO Ebrahim & Co. has audited the annual accounts of Mojaz for the year ending at 30st June 2021. The numbers reported
in the PMR match these audited accounts.
• MOJAZ prepares its financial statements under the historical cost convention, in conformity with accepted accounting
practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

B.17. Shah Sami Sachal Foundation (SSSF)

• EY Ford Rhodes audited the annual accounts for PRSP for the year ending at 30th June 2021.
• All necessary adjustments to PRSP data have been made in order to remove subsidies.
• PRSP prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

B.19. Sarhad Rural Support Programme (SRSP)

• KPMG Taseer Hadi & Co. has audited the annual accounts of SRSO for the year ending at 30th June 2021. The numbers
reported in the PMR match these audited accounts, which were provided to PMN by SRSO.
• SRSO prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Related-party transactions have been properly disclosed in notes to the financial statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; and number of credit officers

B.13. OPD Support Program (OPD)

• Grant Thornton Anjum Rahman & Co. has audited the annual accounts of OPD for the year ending at 30th June 2021. The
numbers reported in the PMR match these audited accounts.
• OPD prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

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B.20. Soon Valley Development Program (SVDP)
• Kreston Hyder Bhimji and Co. has audited the annual accounts of SVDP for the year ending at 30th June 2021. The numbers
reported in the PMR match these audited accounts.
• SVDP prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

B.21. Taleem Finance Company Limited (TFCL)

• Rahman Sarfraz Rahim Iqbal Rafiq Chartered Accountants. has audited the annual accounts of SVDP for the year ending at
30th June 2021. The numbers reported in the PMR match these audited accounts.
• SVDP prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

B.22. Thardeep Microfinance Foundation (TMF)

• BDO Ebrahim & Co. audited the annual accounts for TMF for the year ending at 30th June 2021.
• All necessary adjustments to TMF data have been made in order to remove subsidies.
• TMF prepares its financial statements under the historical cost convention in conformity with accepted accounting practices.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; and number of credit officers.

B.23. Villagers Development Organisation (VDO)

• Zahid Jamil & Co. has audited the annual accounts of VDO for the year ending at 30th June 2021. The numbers reported in the
PMR match these audited accounts.
• VDO prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
• All necessary adjustments to data have been made in order to remove subsidies.
• Information on grants and grant income has been properly disclosed in the financial statements and notes to the financial
statements.
• The following data has been taken from the organisation’s MIS: number of clients disaggregated by region (rural/urban) and by
sex; number of staff; number of credit officers; and number of branches (also available in audited accounts).

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Annex B - Financial Performance
Infrastructure ('000)
MFBs

KBL HBL MFB Ubank MMFB NRSP-B TMFB FINCA POMFB Advans SMFB Sub - Total MFB

Age of Institution 21 21 10 10 11 17 14 16 10 7 137

Total Assets (PKR '000) 116,491,643 110,020,565 104,578,285 69,158,827 51,380,715 55,581,262 37,052,458 7,180,863 3,371,238 2,085,357 556,901,214

Total Equity (PKR '000) 11,263,522 10,083,342 7,491,093 6,140,825 4,278,973 6,250,186 3,737,612 2,406,070 757,325 969,348 53,378,295

Total Liabilities (PKR '000) 105,228,121 99,937,223 97,087,193 63,018,003 47,101,742 49,331,076 33,314,846 4,774,793 2,613,913 1,116,010 503,522,920

Total Branches (including Head Office) 206 239 196 105 151 66 131 47 14 81 1,236

Total Staff 4,664 3,756 3,007 2,076 2,786 2,207 2,402 217 409 351 21,875

- of which women 496 587 241 192 66 457 538 151 56 11 2,795

6 5 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Infrastructure ('000)
NBMFCs

NRSP KASHF Akhuwat ASA-P RCDP TMF DSP SAFCO PRSP JWS-P SRSO CEIP FFO

Age of Institution 21 21 10 10 11 17 14 16 10 7 137 21 29

Total Assets (PKR '000) 116,491,643 110,020,565 104,578,285 69,158,827 51,380,715 55,581,262 37,052,458 7,180,863 3,371,238 2,085,357 556,901,214 2,178,246 1,723,948

Total Equity (PKR '000) 11,263,522 10,083,342 7,491,093 6,140,825 4,278,973 6,250,186 3,737,612 2,406,070 757,325 969,348 53,378,295 373,388 823,687

Total Liabilities (PKR '000) 105,228,121 99,937,223 97,087,193 63,018,003 47,101,742 49,331,076 33,314,846 4,774,793 2,613,913 1,116,010 503,522,920 1,804,859 900,261

Total Branches (including Head Office) 206 239 196 105 151 66 131 47 14 81 1,236 30 29

Total Staff 4,664 3,756 3,007 2,076 2,786 2,207 2,402 217 409 351 21,875 336 220

- of which women 496 587 241 192 66 457 538 151 56 11 2,795 84 69

Infrastructure ('000)
NBMFCs

MOJAZ Agahe GBTI SVDP SSSF OPD TFCL SRSP FDO VDO Sub - Total NBMFCs Total Industry

Age of Institution 13 12 26 6 16 4 3 32 24 26

Total Assets (PKR '000) 1,201,719 1,587,634 1,163,237 558,511 257,285 105,473 278,216 2,638,716 298,401 35,208 147,578,654 704,479,868

Total Equity (PKR '000) 209,969 741,365 594,121 56,888 76,131 2,110 242,653 1,867,179 186,500 31,251 41,650,215 95,028,509

Total Liabilities (PKR '000) 991,750 846,268 569,117 501,622 181,154 103,364 35,562 771,537 111,901 3,957 105,928,439 609,451,359

Total Branches (including Head Office) 26 33 38 11 4 6 2 9 3 3 2,441 3,677

Total Staff 230 264 159 111 53 45 23 28 73 10 19,509 41,384

- of which women 58 43 48 3 18 10 5 14 15 1 3,648 6,443

6 6 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financing Structure (in PKR '000)
MFBs

KBL HBL MFB Ubank MMFB NRSP-B TMFB FINCA POMFB Advans SMFB Sub - Total MFB

Total Assets 116,491,643 110,020,565 104,578,285 69,158,827 51,380,715 55,581,262 37,052,458 7,180,863 3,371,238 2,085,357 556,901,214

Total Equity 11,263,522 10,083,342 7,491,093 6,140,825 4,278,973 6,250,186 3,737,612 2,406,070 757,325 969,348 53,378,295

Total Debt 7,608,379 4,882,977 38,679,606 8,378,192 5,181,379 2,482,284 100,000 750,000 68,062,818

- Subsidised Debt*

- Commercial Debt 7,608,379 4,882,977 38,679,606 8,378,192 5,181,379 2,482,284 100,000 750,000 68,062,818

Total Deposits 93,162,369 91,362,605 55,000,290 58,658,397 34,126,738 39,049,724 25,419,127 1,771,283 2,272,273 271,023 401,093,829

Total Liabilities 105,228,121 99,937,223 97,087,193 63,018,003 47,101,742 49,331,076 33,314,846 4,774,793 2,613,913 1,116,010 503,522,920

Gross Loan Portfolio 72,513,035 59,244,624 36,411,345 38,369,833 30,975,486 11,796,071 19,695,729 5,600,002 2,494,002 957,831 278,057,958

weighted avg.

Equity-to-Asset Ratio 9.7% 9.2% 7.2% 8.9% 8.3% 11.2% 10.1% 33.5% 22.5% 46.5% 9.6%

Commercial Liabilities-to-Total Debt 100.0% 100.0% 100.0% 0.0% 100.0% 0.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Debt-to-Equity Ratio 0.7 0.5 5.2 0.0 2.0 0.0 1.4 1.0 0.1 0.8 1.3

Deposits-to-Gross Loan Portfolio 128.5% 154.2% 151.1% 152.9% 110.2% 331.0% 129.1% 31.6% 91.1% 28.3% 144.2%

Deposits-to-Total Assets 80.0% 83.0% 52.6% 84.8% 66.4% 70.3% 68.6% 24.7% 67.4% 13.0% 72.0%

Cost of Funds 8.6% 6.5% 6.0% 2.9% 8.9% 4.9% 8.6% 5.3% 7.8% 6.1% 6.6%

Gross Loan Portfolio-to-Total Assets 62.2% 53.8% 34.8% 55.5% 60.3% 21.2% 53.2% 78.0% 74.0% 45.9% 49.9%

6 7 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financing Structure (in PKR '000)
NBMFCs

NRSP KASHF Akhuwat ASA-P RCDP TMF DSP SAFCO PRSP JWS-P SRSO CEIP FFO

Total Assets 31,981,700 25,014,146 28,081,439 15,858,581 7,142,530 55,581,262 37,052,458 7,180,863 3,371,238 2,085,357 556,901,214 2,178,246 1,723,948

Total Equity 10,923,143 5,295,834 3,514,475 6,571,166 2,362,529 6,250,186 3,737,612 2,406,070 757,325 969,348 53,378,295 373,388 823,687

Total Debt 20,802,431 18,311,293 24,402,999 8,491,311 3,823,284 5,181,379 2,482,284 100,000 750,000 68,062,818 1,708,011 150,000

- Subsidised Debt* 800,092 24,402,999 396,007 105,776

- Commercial Debt 20,002,339 18,311,293 8,491,311 3,427,278 5,181,379 2,482,284 100,000 750,000 68,062,818 1,602,235 150,000

Total Deposits 39,049,724 25,419,127 1,771,283 2,272,273 271,023 401,093,829

Total Liabilities 21,058,557 19,718,312 24,566,965 9,287,415 4,780,001 49,331,076 33,314,846 4,774,793 2,613,913 1,116,010 503,522,920 1,804,859 900,261

Gross Loan Portfolio 18,500,634 16,274,826 21,642,654 14,001,167 4,967,245 11,796,071 19,695,729 5,600,002 2,494,002 957,831 278,057,958 1,607,298 701,539

weighted avg.

Equity-to-Asset Ratio 34.2% 21.2% 12.5% 41.4% 33.1% 11.2% 10.1% 33.5% 22.5% 46.5% 9.6% 17.1% 47.8%

Commercial Liabilities-to-Total Debt 96.2% 100.0% 0.0% 100.0% 89.6% 0.0% 100.0% 100.0% 100.0% 100.0% 100.0% 93.8% 100.0%

Debt-to-Equity Ratio 1.9 3.5 6.9 1.3 1.6 0.0 1.4 1.0 0.1 0.8 1.3 4.6 0.2

Deposits-to-Gross Loan Portfolio 0.0% 0.0% 0.0% 0.0% 0.0% 331.0% 129.1% 31.6% 91.1% 28.3% 144.2% 0.0% 0.0%

Deposits-to-Total Assets 0.0% 0.0% 0.0% 0.0% 0.0% 70.3% 68.6% 24.7% 67.4% 13.0% 72.0% 0.0% 0.0%

Cost of Funds 5.0% 11.0% 0.0% 12.6% 14.3% 4.9% 8.6% 5.3% 7.8% 6.1% 6.6% 9.1% 78.0%

Gross Loan Portfolio-to-Total Assets 57.8% 65.1% 77.1% 88.3% 69.5% 21.2% 53.2% 78.0% 74.0% 45.9% 49.9% 73.8% 40.7%

*Below market rate

6 8 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financing Structure (in PKR '000)
NBMFCs

MOJAZ Agahe GBTI SVDP SSSF OPD TFCL SRSP FDO VDO Sub - Total NBMFCs Total Industry

Total Assets 1,201,719 1,587,634 1,163,237 558,511 257,285 105,473 278,216 2,638,716 298,401 35,208 147,578,654 704,479,868

Total Equity 209,969 741,365 594,121 56,888 76,131 2,110 242,653 1,867,179 186,500 31,251 41,650,215 95,028,509

Total Debt 963,058 817,756 535,556 484,266 56,000 65,886 25,000 100,591 3,211 94,420,018 162,482,836

- Subsidised Debt* 41,482 332,056 26,842,849 26,842,849

- Commercial Debt 963,058 776,274 203,500 484,266 56,000 65,886 25,000 100,591 3,211 67,577,169 135,639,987

Total Deposits 31,040 31,040 401,124,869

Total Liabilities 991,750 846,268 569,117 501,622 181,154 103,364 35,562 771,537 111,901 3,957 105,928,439 609,451,359

Gross Loan Portfolio 799,902 849,993 313,874 313,874 170,691 80,616 163,491 98,752 54,549 30,842 94,813,599 372,871,556

weighted avg. weighted avg. weighted avg.

Equity-to-Asset Ratio 17.5% 46.7% 51.1% 10.2% 29.6% 2.0% 87.2% 70.8% 62.5% 88.8% 28.2% 13.5%

Commercial Liabilities-to-Total Debt 100.0% 94.9% 38.0% 100.0% 100.0% 100.0% 100.0% 0.0% 100.0% 100.0% 71.6% 83.5%

Debt-to-Equity Ratio 4.6 1.1 0.9 8.5 0.7 31.2 0.1 0.0 0.5 0.1 2.27 1.71

Deposits-to-Gross Loan Portfolio 0.0% 0.0% 0.0% 0.0% 0.0% 38.5% 0.0% 0.0% 0.0% 0.0% 0.00 107.6%

Deposits-to-Total Assets 0.0% 0.0% 0.0% 0.0% 0.0% 29.4% 0.0% 0.0% 0.0% 0.0% 0.00 56.9%

Cost of Funds 9.9% 11.6% 3.2% 9.3% 29.7% 10.2% 1.3% 0.0% 37915.6% 0.0% 0.0% 6.8%

Gross Loan Portfolio-to-Total Assets 66.6% 53.5% 27.0% 56.2% 66.3% 76.4% 58.8% 3.7% 18.3% 87.6% 64.2% 52.9%

*Below market rate

6 9 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financial Performance (in PKR '000)
MFBs

KBL HBL MFB Ubank MMFB NRSP-B TMFB FINCA POMFB Advans SMFB Sub - Total
MFB
Income from Loan Portfolio 18,501,974 14,491,003 11,050,433 9,567,572 7,296,302 2,201,571 5,038,958 1,720,000 749,411 252,828 70,870,051

Income from Investments 2,010,265 1,974,110 2,183,924 1,146,586 1,073,564 2,109,360 666,970 25,559 91,578 11,281,917

Income from Other Sources 72,540 163,809 155,665 3,688 705,722 6,039,090 102,065 171,966 142,247 1,062 7,557,853

Total Revenue 20,584,779 16,628,922 13,390,022 10,717,846 9,075,588 10,350,021 5,807,993 1,891,965 917,218 345,467 89,709,820

Less : Financial Expense 8,713,604 6,294,003 5,589,495 1,697,010 3,790,047 1,926,625 2,623,081 224,685 184,562 61,801 31,104,913

Gross Financial Margin 11,871,175 10,334,919 7,800,526 9,020,836 5,285,541 8,423,396 3,184,913 1,667,280 732,655 283,666 58,604,907

Less: Loan Loss Provision Expense 3,937,456 1,804,102 1,409,157 987,881 3,987,771 1,544,680 1,920,358 315,539 74,239 15,452 15,996,636

Net Financial Margin 7,933,719 8,530,817 6,391,369 8,032,954 1,297,769 6,878,716 1,264,555 1,351,741 658,416 268,215 42,608,271

Personnel Expense 3,457,305 3,281,693 2,337,680 2,461,881 1,976,562 1,935,600 2,024,455 580,580 299,816 164,136 18,519,708

Admin Expense 3,475,823 2,987,954 2,697,526 4,514,697 1,183,658 3,174,422 1,582,332 447,369 302,200 58,267 20,424,247

Less: Operating Expense 6,933,128 6,269,647 5,035,205 6,976,579 3,160,220 5,110,021 3,606,787 1,027,949 602,016 222,403 38,943,956

Other Non Operating Expense 2,854 27,129 -4,274 12,212,819 12,238,528

Net Income before Tax 1,000,591 2,258,316 1,329,035 1,060,649 -1,862,451 -10,444,124 -2,342,232 323,792 56,400 45,811 -8,574,213

Provision for Tax 330,194 702,068 217,998 324,420 -630,642 320,647 -819,708 107,866 2,515 18,464 573,821

Net Income/(Loss) 670,397 1,556,248 1,111,037 736,230 -1,231,809 -10,764,771 -1,522,523 215,926 53,885 27,347 -9,148,034

Adjusted Financial Expense on Borrowings

Inflation Adjustment Expense 730 701 19 381 279 -248 168 49 37 2,784 4,903

7 0 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financial Performance (in PKR '000)
NBMFCs

KBL HBL MFB Ubank MMFB NRSP-B TMFB FINCA POMFB Advans SMFB Sub - Total
MFB
Adjusted Loan Loss Provision Expense

Total Adjustment Expense 730 701 19 381 279 -248 168 49 37 2,784 4,903

Net Income/(Loss) After Adjustments 669,667 1,555,547 1,111,018 735,848 -1,232,088 -10,764,523 -1,522,692 215,877 53,848 24,562 -9,152,936

Average Total Assets 111,797,259 93,191,826 87,645,844 63,741,737 52,270,938 53,923,105 38,451,670 5,813,591 2,677,538 1,992,298 511,505,806

Average Total Equity 11,028,700 8,385,842 6,583,145 5,760,778 4,894,714 5,707,411 4,490,543 2,296,573 655,382 956,049 50,759,137

weighted avg. weighted avg.

Adjusted Return-on-Assets 0.6% 1.7% 1.3% 1.2% -2.4% -20.0% -4.0% 3.7% 2.0% 1.2% -1.8%

Adjusted Return-on-Equity 6.1% 18.5% 16.9% 12.8% -25.2% -188.6% -33.9% 9.4% 8.2% 2.6% -18.0%

Financial Expense Ratio 12.9% 12.3% 16.5% 5.3% 12.5% 15.7% 12.7% 5.5% 10.3% 8.1% 12.2%

Operational Self Sufficiency (OSS) 105.1% 115.7% 111.0% 111.0% 83.0% 49.8% 71.3% 120.6% 106.6% 115.3% 91.3%

Financial Self Sufficiency (FSS) 105.1% 115.7% 111.0% 111.0% 83.0% 49.8% 71.3% 120.6% 106.5% 114.2% 91.3%

7 1 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financial Performance (in PKR '000)
NBMFCs

NRSP KASHF Akhuwat ASA-P RCDP TMF DSP SAFCO PRSP JWS-P SRSO

Income from Loan Portfolio 5,103,271 5,001,078 1,762,757 5,159,251 1,679,234 1,101,104 934,241 693,307 157,076 867,529 502,958

Income from Investments 129,113 633,592 69,507 34,913 40,560 47,093 282,073

Income from Other Sources 165,864 539,263 58,840 250,323 287,634 17,891 159,899 -23,187 2,739,379

Total Revenue 5,232,384 5,800,534 2,302,019 5,287,598 1,929,557 1,388,738 969,154 751,757 316,975 891,435 3,524,410

Less : Financial Expense 1,038,414 2,022,448 1,067,741 546,904 691,222 407,132 254,093 75,425 271,541 106,786

Gross Financial Margin 4,193,970 3,778,086 2,302,019 4,219,857 1,382,653 697,516 562,023 497,664 241,550 619,894 3,417,624

Less: Loan Loss Provision Expense 1,032,037 487,533 321,033 165,735 71,868 149,728 38,670 75,014 73,153

Net Financial Margin 3,161,933 3,290,553 2,302,019 3,898,823 1,216,918 625,648 412,295 458,994 241,550 544,880 3,344,471

Personnel Expense 2,034,675 1,656,260 1,298,001 1,035,884 537,911 332,848 376,077 205,101 270,314 325,929 977,664

Admin Expense 662,180 768,921 481,693 453,967 325,584 138,594 150,985 136,961 258,111 143,031 2,126,924

Less: Operating Expense 2,696,855 2,425,181 1,779,695 1,489,851 863,495 471,442 527,062 342,061 528,425 468,960 3,104,588

Other Non Operating Expense -70,678 96,276 67,552 34,017 -124,345

Net Income before Tax 535,755 769,097 522,325 2,341,420 319,406 154,206 9,578 116,933 -286,875 75,920 239,883

Provision for Tax 686,674 186 1,422

Net Income/(Loss) 535,755 769,097 522,325 1,654,746 319,406 146,786 9,578 116,933 -286,875 74,498 239,883

Adjusted Financial Expense on Borrowings 68,676 1,451 2,415,577 25,986 11,580 29,509

Inflation Adjustment Expense 409 330 607 207 34 17 69 139 46 12 29

7 2 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financial Performance (in PKR '000)
NBMFCs

CEIP FFO MOJAZ Agahe GBTI SVDP SSSF OPD TFCL SRSP FDO VDO

Income from Loan Portfolio 463,253 307,326 233,484 266,807 87,923 112,806 45,422 31,077 31,967 17,933 6,367

Income from Investments 26,307 19,726 30,669 20,133 55,365 23,581 1,552 1,684 8,162 3,286

Income from Other Sources 12,382 1,852 1,262 21,994 19,288 7,671 7,531 9,213 2,658,784 123,610 233

Total Revenue 501,942 328,904 265,415 308,933 162,575 144,058 54,505 32,761 41,179 2,684,879 126,896 6,600

Less : Financial Expense 155,705 117,016 95,077 94,521 16,940 45,230 16,649 9,918 1,111 14 513 332

Gross Financial Margin 346,237 211,888 170,338 214,412 145,636 98,828 37,856 22,843 40,069 2,684,865 126,382 6,268

Less: Loan Loss Provision Expense 52,214 117,016 19,107 22,143 35,737 33,978 2,855 1,541 36

Net Financial Margin 294,023 94,871 151,231 192,269 109,899 64,850 37,856 19,988 38,528 2,684,865 126,382 6,232

Personnel Expense 174,769 126,500 98,871 107,638 53,418 57,236 25,345 54,989 20,054 27,930 3,718

Admin Expense 102,690 63,325 50,089 43,643 24,737 26,245 35,016 8,029 18,737 7,609 80,835 2,146

Less: Operating Expense 277,459 189,825 148,960 151,281 78,155 83,481 35,016 33,374 73,725 27,663 108,765 5,864

Other Non Operating Expense 11,392 9,209 2,634,068

Net Income before Tax 16,565 -94,954 2,271 29,596 22,536 -18,631 2,840 -13,385 -35,198 23,135 17,617 368

Provision for Tax 4,686 799 3,794 107

Net Income/(Loss) 16,565 -94,954 2,271 29,596 22,536 -23,318 2,041 -13,385 -38,991 23,135 17,617 261

Adjusted Financial Expense on Borrowings 11,371 2,688 2,445 20,915 860 1,451 10,551

Inflation Adjustment Expense 137 19 18 56 2 5 149 1

7 3 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financial Performance (in PKR '000)
NBMFCs
Sub - Total
Total NBMFCs Industry

Income from Loan Portfolio 24,566,172 95,436,223

Income from Investments 1,427,315 12,709,231

Income from Other Sources 7,059,723 14,617,575

Total Revenue 33,053,209 122,763,029

Less : Financial Expense 7,034,731 38,139,645

Gross Financial Margin 26,018,478 84,623,384

Less: Loan Loss Provision Expense 2,699,397 18,696,033

Net Financial Margin 23,319,081 65,927,352

Personnel Expense 9,801,132 28,320,840

Admin Expense 6,110,050 26,534,298

Less: Operating Expense 15,911,182 54,855,138

Other Non Operating Expense 2,657,490 14,896,018

Net Income before Tax 4,750,408 -3,823,804

Provision for Tax 697,667 1,271,488

Net Income/(Loss) 4,045,506 -5,095,292

Adjusted Financial Expense on Borrowings 2,603,058 2,603,058

Inflation Adjustment Expense 2,284 7,187

74 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financial Performance (in PKR '000)
NBMFCs

NRSP KASHF Akhuwat ASA-P RCDP TMF DSP SAFCO PRSP JWS-P SRSO

Adjusted Loan Loss Provision Expense 20,918 23,167

Total Adjustment Expense 69,085 1,781 2,416,184 207 46,937 17 139 34,793 12 29,538 11,508

Net Income/(Loss) After Adjustments 466,671 767,316 -1,893,859 1,654,539 272,469 146,769 116,794 -321,668 74,486 210,346 5,057

Average Total Assets 28,333,210 24,746,909 25,880,501 13,842,540 7,037,121 5,446,240 3,858,112 3,184,368 3,351,064 4,648,466 2,028,286

Average Total Equity 10,549,725 4,851,413 3,253,312 5,702,864 2,171,726 395,802 805,585 1,675,081 748,366 1,649,505 947,445

weighted avg.
Adjusted Return-on-Assets 1.6% 3.1% -7.3% 12.0% 3.9% 2.7% 3.0% -10.1% 2.2% 4.5% 0.2%

Adjusted Return-on-Equity 4.4% 15.8% -58.2% 29.0% 12.5% 37.1% 14.5% -19.2% 10.0% 12.8% 0.5%

Financial Expense Ratio 5.0% 13.6% 0.0% 8.8% 11.9% 16.8% 10.4% 4.7% 11.1% 6.1% 10.7%

Operational Self Sufficiency (OSS) 111.4% 115.3% 129.3% 179.5% 119.8% 112.5% 118.4% 52.5% 109.3% 107.3% 103.4%

Financial Self Sufficiency (FSS) 109.8% 115.2% 54.9% 179.5% 116.4% 112.5% 118.4% 49.6% 109.3% 106.3% 101.0%

7 5 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financial Performance (in PKR '000)
NBMFCs

CEIP FFO MOJAZ Agahe GBTI SVDP SSSF OPD TFCL SRSP FDO VDO

Adjusted Loan Loss Provision Expense 55,888

Total Adjustment Expense 11,508 19 2,705 2,500 20,917 5 1,009 1,452 66,439

Net Income/(Loss) After Adjustments 5,057 -94,973 -434 27,096 1,619 -23,322 1,032 -14,837 -38,991 23,135 -48,822 261

Average Total Assets 2,028,286 1,457,065 1,176,514 1,295,370 1,048,362 526,171 250,847 109,263 285,690 2,489,899 211,781 34,683

Average Total Equity 947,445 477,984 208,834 445,317 582,010 68,547 75,110 7,838 262,149 1,856,137 102,549 31,046

weighted avg.
Adjusted Return-on-Assets 0.2% -6.5% 0.0% 2.1% 0.2% -4.4% 0.4% -13.6% -13.6% 0.9% -23.1% 0.8%

Adjusted Return-on-Equity 0.5% -19.9% -0.2% 6.1% 0.3% -34.0% 1.4% -189.3% -14.9% 1.2% -47.6% 0.8%

Financial Expense Ratio 10.7% 22.2% 11.8% 13.4% 4.6% 13.7% 9.4% 11.2% 1.0% 0.0% 0.1% 1.1%

Operational Self Sufficiency (OSS) 103.4% 77.6% 100.9% 110.6% 116.1% 88.5% 105.5% 71.0% 53.9% 100.9% 116.1% 105.9%

Financial Self Sufficiency (FSS) 101.0% 77.6% 99.8% 109.6% 101.0% 88.5% 103.5% 68.8% 53.9% 100.9% 72.2% 105.9%

7 6 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financial Performance (in PKR '000)
NBMFCs

Sub - Total
Total NBMFCs Industry

Adjusted Loan Loss Provision Expense 200,954 200,954

Total Adjustment Expense 2,806,296 2,811,199

Net Income/(Loss) After Adjustments 1,239,210 -7,913,726

Average Total Assets 135,365,732 646,871,538

Average Total Equity 37,909,950 88,669,087

weighted avg. weighted avg. weighted avg.

Adjusted Return-on-Assets 0.9% -1.2%

Adjusted Return-on-Equity 3.3% -8.9%

Financial Expense Ratio 7.7% 11.0%

Operational Self Sufficiency (OSS) 116.8% 97.0%

Financial Self Sufficiency (FSS) 106.2% 94.9%

7 7 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Operating Income (in PKR '000)
NBMFCs

NRSP KASHF Akhuwat ASA-P RCDP TMF DSP SAFCO PRSP JWS-P SRSO CEIP

Revenue from Loan Portfolio 5,103,271 5,001,078 1,762,757 5,159,251 1,679,234 1,101,104 934,241 693,307 157,076 867,529 502,958 463,253

Total Revenue 5,232,384 5,800,534 2,302,019 5,287,598 1,929,557 1,388,738 969,154 751,757 316,975 891,435 3,524,410 501,942

Adjusted Net Operating Income / (Loss) 466,671 767,316 -1,893,859 1,654,539 272,469 146,769 -91,472 116,794 -321,668 74,486 210,346 5,057

Average Total Assets 28,333,210 24,746,909 25,880,501 13,842,540 7,037,121 5,446,240 4,123,268 3,858,112 3,184,368 3,351,064 4,648,466 2,028,286

Gross Loan Portfolio (Opening Balance) 23,269,783 13,550,820 13,949,464 10,290,958 4,195,007 5,037,882 3,477,566 2,244,515 2,408,160 2,175,630 1,902,197 1,297,808

Gross Loan Portfolio (Closing Balance) 18,500,634 16,274,826 21,642,654 14,001,167 4,967,245 3,184,206 3,282,906 2,619,684 822,357 2,712,170 1,620,330 1,607,298

Average Gross Loan Portfolio 20,885,208 14,912,823 17,796,059 12,146,063 4,581,126 4,111,044 3,380,236 2,432,099 1,615,259 2,443,900 1,761,264 1,452,553

Inflation Rate* 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5%

weighted avg.

Total Revenue Ratio (Total

Revenue-to-Average Total Assets) 18.5% 23.4% 8.9% 38.2% 27.4% 25.5% 23.5% 19.5% 10.0% 26.6% 75.8% 24.7%

Adjusted Profit Margin (Adjusted

Profit/(Loss)-to-Total Revenue) 8.9% 13.2% -82.3% 31.3% 14.1% 10.6% -9.4% 15.5% -101.5% 8.4% 6.0% 1.0%

Yield on Gross Portfolio (Nominal) 24.4% 33.5% 9.9% 42.5% 36.7% 26.8% 27.6% 28.5% 9.7% 35.5% 28.6% 31.9%

Yield on Gross Portfolio (Real) 13.6% 22.0% 0.4% 30.1% 24.8% 15.8% 16.6% 17.4% 0.2% 23.7% 17.4% 20.4%

7 8 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Operating Income (in PKR '000)
NBMFCs

FFO MOJAZ Agahe GBTI SVDP SSSF OPD TFCL SRSP FDO VDO Sub - Total NBMFCs Total Industry

Revenue from Loan Portfolio 307,326 233,484 266,807 87,923 112,806 45,422 31,077 31,967 17,933 6,367 24,566,172 95,436,223

Total Revenue 328,904 265,415 308,933 162,575 144,058 54,505 32,761 41,179 2,684,879 126,896 6,600 33,053,209 122,763,029

Adjusted Net Operating Income / (Loss) -94,973 -434 27,096 1,619 -23,322 1,032 -14,837 -38,991 23,135 -48,822 261 1,239,210 -7,913,726

Average Total Assets 1,457,065 1,176,514 1,295,370 1,048,362 526,171 250,847 109,263 285,690 2,489,899 211,781 34,683 135,365,732 646,871,538

Gross Loan Portfolio (Opening Balance) 352,469 807,905 565,840 428,037 344,689 181,987 96,115 60,815 153,794 907,879 28,873 87,728,197 317,672,181

Gross Loan Portfolio (Closing Balance) 701,539 799,902 849,993 313,874 313,874 170,691 80,616 163,491 98,752 54,549 30,842 94,813,599 372,871,556

Average Gross Loan Portfolio 527,004 803,904 707,917 370,955 329,281 176,339 88,366 112,153 126,273 481,214 29,858 91,270,898 345,271,869

Inflation Rate* 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5%

weighted avg. weighted avg.

Total Revenue Ratio (Total

Revenue-to-Average Total Assets) 22.6% 22.6% 23.8% 15.5% 27.4% 21.7% 30.0% 14.4% 107.8% 59.9% 19.0% 24.4% 19.0%

Adjusted Profit Margin (Adjusted

Profit/(Loss)-to-Total Revenue) -28.9% -0.2% 8.8% 1.0% -16.2% 1.9% -45.3% -94.7% 0.9% -38.5% 4.0% 3.7% -6.4%

Yield on Gross Portfolio (Nominal) 58.3% 29.0% 37.7% 23.7% 34.3% 25.8% 35.2% 28.5% 14.2% 0.0% 21.3% 26.9% 27.6%

Yield on Gross Portfolio (Real) 44.6% 17.8% 25.7% 13.0% 22.6% 14.8% 23.4% 17.4% 4.3% -8.7% 10.8% 15.9% 16.6%

7 9 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Outreach
MFBs

KBL HBL MFB Ubank MMFB NRSP-B TMFB FINCA POMFB Advans SMFB Sub - Total MFB

Active Borrowers 806,434 554,520 346,390 2,018,447 317,099 177,987 201,508 55,981 15,059 53,993 4,547,418

Active Women Borrowers 229,637 165,912 61,558 290,756 25,157 26,047 21,805 18,145 772 53,988 893,777

Gross Loan Portfolio (PKR '000) 72,513,035 59,244,624 36,411,345 38,369,833 30,975,486 11,796,071 19,695,729 5,600,002 2,494,002 957,831 278,057,958

Annual per Capita Income (PKR)* 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414

Number of Loans Outstanding 806,434 554,520 346,390 2,018,447 317,099 177,987 202,094 55,981 15,059 53,993 4,548,004

Depositors 2,671,838 1,765,497 2,739,578 39,829,714 1,199,807 24,624,870 1,327,315 16,597 44,005 103,106 74,322,327

Number of Deposit Accounts 2,990,122 1,765,497 2,739,578 39,829,747 1,240,365 24,651,620 1,708,490 16,651 44,005 103,106 75,089,181

Number of Women Depositors 849,197 520,627 143,512 10,987,376 224,789 5,444,178 194,026 4,657 4,491 103,105 18,475,958

Deposits Outstanding (PKR '000) 93,162,369 91,362,605 55,000,290 58,658,397 34,126,738 39,049,724 25,419,127 1,771,283 2,272,273 271,023 401,093,829

weighted avg. weighted avg.

Proportion of Active Women Borrowers (%) 28.5% 29.9% 17.8% 14.4% 7.9% 14.6% 10.8% 32.4% 5.1% 100.0% 19.7%

Average Loan Balance per Active Borrower (PKR) 89,918 106,839 105,117 19,010 97,684 66,275 97,742 100,034 165,615 17,740 61,146

Average Loan Balance per Active Borrower/per Capita Income 36.5% 43.4% 42.7% 7.7% 39.6% 26.9% 39.7% 40.6% 67.2% 7.2% 24.8%

Average Outstanding Loan Balance (PKR) 89,918 106,839 105,117 19,010 97,684 66,275 97,458 100,034 165,615 17,740 61,138

Average Outstanding Loan Balance / per Capita Income 36.5% 43.4% 42.7% 7.7% 39.6% 26.9% 39.6% 40.6% 67.2% 7.2% 24.8%

Proportion of Active Women Depositors (%) 31.8% 29.5% 5.2% 27.6% 18.7% 22.1% 14.6% 28.1% 10.2% 100.0% 24.9%

Average Saving Balance per Active Depositor (PKR) 34,868 51,749 20,076 1,473 28,444 1,586 19,151 106,723 51,637 2,629 5,397

Active Deposit Account Balance (PKR) 31,157 51,749 20,076 1,473 27,513 1,584 14,878 106,377 51,637 2,629 5,342

* SBP Annual Report - Statistical Supplement FY 21

8 0 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Outreach
NBMFCs

NRSP KASHF Akhuwat ASA-P RCDP TMF DSP SAFCO PRSP JWS-P SRSO CEIP

Active Borrowers 674,385 550,090 767,111 512,309 144,338 89,848 116,188 105,909 34,555 91,865 58,401 43,903

Active Women Borrowers 556,219 548,968 322,187 498,082 137,548 61,111 116,188 62,453 17,689 88,026 54,830 41,171

Gross Loan Portfolio (PKR '000) 18,500,634 16,274,826 21,642,654 14,001,167 4,967,245 3,184,206 3,282,906 2,619,684 822,357 2,712,170 1,620,330 1,607,298

Annual per Capita Income (PKR)* 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414

Number of Loans Outstanding 674,385 550,090 767,111 512,309 144,338 89,848 116,188 105,909 34,555 91,865 58,401 43,903

Depositors - - - - - - - - - - - -

Number of Deposit Accounts - - - - - - - - - - - -

Number of Women Depositors - - - - - - - - - - - -

Deposits Outstanding (PKR '000)

weighted avg.

Proportion of Active Women Borrowers (%) 82.5% 99.8% 42.0% 97.2% 95.3% 68.0% 100.0% 59.0% 51.2% 95.8% 93.9% 93.8%

Average Loan Balance per Active Borrower (PKR) 27,433 29,586 28,213 27,330 34,414 35,440 28,255 24,735 23,799 29,523 27,745 36,610

Average Loan Balance per Active Borrower/per Capita Income 11.1% 12.0% 11.4% 11.1% 14.0% 14.4% 11.5% 10.0% 9.7% 12.0% 11.3% 14.9%

Average Outstanding Loan Balance (PKR) 27,433 29,586 28,213 27,330 34,414 35,440 28,255 24,735 23,799 29,523 27,745 36,610

Average Outstanding Loan Balance / per Capita Income 11.1% 12.0% 11.4% 11.1% 14.0% 14.4% 11.5% 10.0% 9.7% 12.0% 11.3% 14.9%

Proportion of Active Women Depositors (%) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Average Saving Balance per Active Depositor (PKR) - - - - - - - - - - - -

Active Deposit Account Balance (PKR) - - - - - - - - - - - -

* SBP Annual Report - Statistical Supplement FY 21

8 1 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Outreach
NBMFCs

FFO MOJAZ Agahe GBTI SVDP SSSF OPD TFCL SRSP FDO VDO Sub - Total NBMFCs Total Industry

Active Borrowers 42,755 40,080 35,532 24,953 11,753 4,316 5,135 305 6,401 2,941 1,946 3,365,019 7,912,437

Active Women Borrowers 42,561 17,924 35,237 24,214 8,493 2,140 2,201 29 6,401 2,941 858 2,647,471 3,541,248

Gross Loan Portfolio (PKR '000) 701,539 799,902 849,993 313,874 313,874 170,691 80,616 163,491 98,752 54,549 30,842 94,813,599 372,871,556

Annual per Capita Income (PKR)* 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414 246,414

Number of Loans Outstanding 42,755 40,080 35,532 24,953 11,753 4,316 5,135 305 6,401 2,941 1,946 3,365,019 7,913,023

Depositors - - - - - - - - - - - - 74,322,327

Number of Deposit Accounts - - - - - - - - - - - - 75,089,181

Number of Women Depositors - - - - - - - - - - - - 18,475,958

Deposits Outstanding (PKR '000) 401,093,829

weighted avg. weighted avg. weighted avg.

Proportion of Active Women Borrowers (%) 99.5% 44.7% 99.2% 97.0% 72.3% 49.6% 42.9% 9.5% 100.0% 100.0% 44.1% 78.7% 44.8%

Average Loan Balance per Active Borrower (PKR) 16,408 19,958 23,922 12,579 26,706 39,548 15,699 536,036 15,428 18,548 15,849 28,176 47,125

Average Loan Balance per Active Borrower/per Capita Income 6.7% 8.1% 9.7% 5.1% 10.8% 16.0% 6.4% 217.5% 6.3% 7.5% 6.4% 11% 19.1%

Average Outstanding Loan Balance (PKR) 16,408 19,958 23,922 12,579 26,706 39,548 15,699 536,036 15,428 18,548 15,849 28,176 47,121

Average Outstanding Loan Balance / per Capita Income 6.7% 8.1% 9.7% 5.1% 10.8% 16.0% 6.4% 217.5% 6.3% 7.5% 6.4% 11.4% 19.1%

Proportion of Active Women Depositors (%) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% - 24.86%

Average Saving Balance per Active Depositor (PKR) - - - - - - - - - - - - 5,397

Active Deposit Account Balance (PKR) - - - - - - - - - - - - 5,342

* SBP Annual Report - Statistical Supplement FY 21

8 2 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Operating Efficiency
MFBs

KBL HBL MFB Ubank MMFB NRSP-B TMFB FINCA POMFB Advans SMFB Sub - Total MFB

Operating Expense (PKR '000) 6,933,128 6,269,647 5,035,205 6,976,579 3,160,220 5,110,021 3,606,787 1,027,949 602,016 222,403 38,943,956

Personnel Expense (PKR '000) 3,457,305 3,281,693 2,337,680 2,461,881 1,976,562 1,935,600 2,024,455 580,580 299,816 164,136 18,519,708

Average Gross Loan Portfolio (PKR '000) 67,309,338 51,328,239 33,865,353 31,806,490 30,204,386 12,261,282 20,623,120 4,059,631 1,784,220 758,913 254,000,971

Average Number of Active Borrowers 806,434 554,520 346,390 2,018,447 317,099 177,987 201,508 55,981 15,059 53,993 4,547,418

Average Number of Active Loans 806,434 554,520 346,390 2,018,447 317,099 177,987 202,094 55,981 15,059 53,993 4,548,004

weighted avg. weighted avg.

Adjusted Operating Expense-to-Average Gross Loan Portfolio 10.30% 12.2% 14.9% 21.9% 10.5% 41.7% 17.5% 25.3% 33.7% 29.3% 15.3%

Adjusted Personnel Expense-to-Average Gross Loan Portfolio 5.14% 6.4% 6.9% 7.7% 6.5% 15.8% 9.8% 14.3% 16.8% 21.6% 7.3%

Adjusted Admin Expense-to-Average Gross Loan Portfolio 5.16% 5.82% 7.97% 14.19% 3.92% 25.89% 7.67% 11.02% 16.94% 7.68% 8.0%

Average Salary/Gross Domestic Product per Capita 3.0 3.5 3.2 4.8 2.9 3.6 3.4 10.9 3.0 1.9 3.4

Adjusted Cost per Borrower (PKR) 8,597 11,306 14,536 3,456 9,966 28,710 17,899 18,362 39,977 4,119 8,564

Adjusted Cost per Loan (PKR) 8,597 11,306 14,536 3,456 9,966 28,710 17,847 18,362 39,977 4,119 8,563

8 3 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Operating Efficiency
NBMFCs

NRSP KASHF Akhuwat ASA-P RCDP TMF DSP SAFCO PRSP JWS-P SRSO CEIP

Operating Expense (PKR '000) 2,696,855 2,425,181 1,779,695 1,489,851 863,495 471,442 527,062 342,061 528,425 468,960 3,104,588

Personnel Expense (PKR '000) 2,034,675 1,656,260 1,298,001 1,035,884 537,911 332,848 376,077 205,101 270,314 325,929 977,664

Average Gross Loan Portfolio (PKR '000) 20,885,208 14,912,823 17,796,059 12,146,063 4,581,126 4,111,044 3,380,236 2,432,099 1,615,259 2,443,900 1,761,264

Average Number of Active Borrowers 681,574 550,090 767,111 512,309 144,338 89,848 116,188 105,909 34,555 91,865 58,401

Average Number of Active Loans 681,574 554,805 767,111 512,309 144,338 89,848 116,188 105,909 34,555 91,865 58,401

weighted avg.

Adjusted Operating Expense-to-Average Gross Loan Portfolio 12.9% 16.3% 10.0% 12.3% 18.8% 11.5% 15.6% 14.1% 32.7% 19.2% 176.3%

Adjusted Personnel Expense-to-Average Gross Loan Portfolio 9.7% 11.1% 7.3% 8.5% 11.7% 8.1% 11.1% 8.4% 16.7% 13.3% 55.5%

Adjusted Admin Expense-to-Average Gross Loan Portfolio 3.17% 5.16% 2.71% 3.74% 7.11% 3.37% 4.47% 5.63% 15.98% 5.85% 120.76%

Average Salary/Gross Domestic Product per Capita 1.8 2.2 1.3 1.8 3.9 1.6 2.4 1.5 2.2 1.9 10.4

Adjusted Cost per Borrower (PKR) 3,957 4,409 2,320 2,908 5,982 5,247 4,536 3,230 15,292 5,105 53,160

Adjusted Cost per Loan (PKR) 3,957 4,371 2,320 2,908 5,982 5,247 4,536 3,230 15,292 5,105 53,160

8 4 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 Operating Efficiency
NBMFCs

CEIP FFO MOJAZ Agahe GBTI SVDP SSSF OPD TFCL SRSP FDO VDO Sub - Total NBMFCs Total Industry

Operating Expense (PKR '000) 277,459 189,825 148,960 151,281 78,155 83,481 35,016 33,374 73,725 27,663 108,765 5,864 15,911,182 54,855,138

Personnel Expense (PKR '000) 174,769 126,500 98,871 107,638 53,418 57,236 25,345 54,989 20,054 27,930 3,718 9,801,132 28,320,840

Average Gross Loan Portfolio (PKR '000) 1,452,553 527,004 803,904 707,917 370,955 329,281 176,339 88,366 112,153 126,273 481,214 29,858 91,270,898 345,271,869

Average Number of Active Borrowers 43,903 42,755 40,080 35,532 24,953 11,753 4,316 5,135 305 6,401 2,941 1,946 3,372,208 7,919,626

Average Number of Active Loans 43,903 42,755 40,080 35,532 24,953 11,753 4,316 5,135 305 6,401 2,941 1,946 3,376,923 7,924,927

weighted avg. weighted avg. weighted avg.

Adjusted Operating Expense-to-Average Gross Loan Portfolio 19.1% 36.0% 18.5% 21.4% 21.1% 25.4% 19.9% 37.8% 65.7% 21.9% 22.6% 19.6% 17.4% 15.9%

Adjusted Personnel Expense-to-Average Gross Loan Portfolio 12.0% 24.0% 12.3% 15.2% 14.4% 17.4% 0.0% 28.7% 49.0% 15.9% 5.8% 12.5% 10.7% 8.2%

Adjusted Admin Expense-to-Average Gross Loan Portfolio 7.07% 12.02% 6.23% 6.16% 6.67% 7.97% 19.86% 9.09% 16.71% 6.03% 16.80% 7.19% 6.7% 7.7%

Average Salary/Gross Domestic Product per Capita 2.1 2.3 1.7 1.7 1.4 2.1 0.0 2.3 9.7 2.9 1.6 1.5 2.0 2.8

Adjusted Cost per Borrower (PKR) 6,320 4,440 3,717 4,258 3,132 7,103 8,113 6,499 241,722 4,322 36,982 3,013 4,718 6,926

Adjusted Cost per Loan (PKR) 6,320 4,440 3,717 4,258 3,132 7,103 8,113 6,499 241,722 4,322 36,982 3,013 4,712 6,922

7 9 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Operating Expense (in PKR '000)
SVDP SSSF OPD TFCL SRSP FDO VDO Sub - Total NBMFCs Total Industry

Adjusted Total Expense 162,689 52,525 46,146 76,377 2,661,744 165,166 6,232 31,094,810 129,378,843

Adjusted Financial Expense 45,230 17,509 9,918 1,111 14 513 332 9,625,787 40,730,700

Adjusted Loan Loss Provision Expense 33,978 2,855 1,541 55,888 36 2,900,351 18,896,986

Operating Expense 83,481 35,016 33,374 73,725 2,661,730 108,765 5,864 18,568,673 69,751,156

Adjustment Expense 5 1,009 1,452 66,439 2,806,296 2,811,199

Average Total Assets 526,171 250,847 109,263 285,690 2,489,899 211,781 34,683 135,365,732 646,871,538

weighted avg. weighted avg. weighted avg.

Adjusted Total Expense-to-Average Total Assets 30.9% 20.9% 42.2% 26.7% 106.9% 78.0% 18.0% 23.0% 20.0%

Adjusted Financial Expense-to-Average Total Assets 8.6% 7.0% 9.1% 0.4% 0.0% 0.2% 1.0% 7.1% 6.3%

Adjusted Loan Loss Provision Expense-to-Average Total Assets 6.5% 0.0% 2.6% 0.5% 0.0% 26.4% 0.1% 2.1% 2.9%

Adjusted Operating Expense-to-Average Total Assets 15.9% 14.0% 30.5% 25.8% 106.9% 51.4% 16.9% 13.7% 10.8%

Adjusted Personnel Expense 10.9% 0.0% 23.2% 19.2% 0.8% 13.2% 10.7% 7.2% 4.4%

Adjusted Admin Expense 5.0% 14.0% 7.3% 6.6% 0.3% 38.2% 6.2% 4.5% 4.1%

Adjustment Expense-to-Average Total Assets 0.0% 0.4% 1.3% 0.0% 0.0% 31.4% 0.0% 2.1% 0.4%

8 5 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Productivity
MFBs

KBL HBL MFB Ubank MMFB NRSP-B TMFB FINCA POMFB Advans SMFB Sub - Total MFB

Number of Active Borrowers 806,434 554,520 346,390 2,018,447 317,099 177,987 201,508 55,981 15,059 53,993 4,547,418

Number of Active Loans 806,434 554,520 346,390 2,018,447 317,099 177,987 202,094 55,981 15,059 53,993 4,548,004

Number of Active Depositors 2,671,838 1,765,497 2,739,578 39,829,714 1,199,807 24,624,870 1,327,315 16,597 44,005 103,106 74,322,327.00

Number of Deposit Accounts 2,990,122 1,765,497 2,739,578 39,829,747 1,240,365 24,651,620 1,708,490 16,651 44,005 103,106 75,089,181.00

Total Staff 4,664 3,756 3,007 2,076 2,786 2,207 2,402 217 409 351 21,875

Total Loan Officers 2,668 1,739 1,150 733 1,613 902 892 480 87 196 10,460

weighted avg. weighted avg.

Borrowers per Staff 173 148 115 972 114 81 84 258 37 154 208

Loans per Staff 173 148 115 972 114 81 84 258 37 154 208

Borrowers per Loan Officer 302 319 301 2,754 197 197 226 117 173 275 435

Loans per Loan Officer 302 319 301 2,754 197 197 227 117 173 275 435

Depositors per Staff 573 470 911 19,186 431 11,158 553 76 108 294 3,398

Deposit Accounts per Staff 641 470 911 19,186 445 11,170 711 77 108 294 3,433

Personnel Allocation Ratio 57.2% 46.3% 38.2% 35.3% 57.9% 40.9% 37.1% 221.2% 21.3% 55.8% 47.8%

8 6 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Productivity
NBMFCs

NRSP KASHF Akhuwat ASA-P RCDP TMF DSP SAFCO PRSP JWS-P SRSO

Number of Active Borrowers 674,385 550,090 767,111 512,309 144,338 89,848 116,188 105,909 34,555 91,865 58,401

Number of Active Loans 674,385 550,090 767,111 512,309 144,338 89,848 116,188 105,909 34,555 91,865 58,401

Number of Active Depositors - - - - - - - - - - -

Number of Deposit Accounts - - - - - - - - - - -

Total Staff 4,472 3,115 3,919 2,297 559 831 641 545 506 691 381

Total Loan Officers 3,551 2,101 2,350 1,149 627 448 346 258 223 392 244

weighted avg.

Borrowers per Staff 151 177 196 223 258 108 181 194 68 133 153

Loans per Staff 151 177 196 223 258 108 181 194 68 133 153

Borrowers per Loan Officer 190 262 326 446 230 201 336 411 155 234 239

Loans per Loan Officer 190 262 326 446 230 201 336 411 155 234 239

Depositors per Staff 0 0 0 0 0 0 0 0 0 0 0

Deposit Accounts per Staff 0 0 0 0 0 0 0 0 0 0 0

Personnel Allocation Ratio 79.4% 67.4% 60.0% 50.0% 112.2% 53.9% 54.0% 47.3% 44.1% 56.7% 64.0%

8 7 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Productivity
NBMFCs

CEIP FFO MOJAZ Agahe GBTI SVDP SSSF OPD TFCL SRSP FDO VDO Sub - Total NBMFCs Total Industry

Number of Active Borrowers 43,903 42,755 40,080 35,532 24,953 11,753 4,316 5,135 305 6,401 2,941 1,946 3,365,019 7,912,437

Number of Active Loans 43,903 42,755 40,080 35,532 24,953 11,753 4,316 5,135 305 6,401 2,941 1,946 3,365,019 7,913,023

Number of Active Depositors - - - - - - - - - - - - - 74,322,327

Number of Deposit Accounts - - - - - - - - - - - - - 75,089,181

Total Staff 336 220 230 264 159 111 53 45 23 28 73 10 19,509 41,384

Total Loan Officers 140 136 114 116 101 44 13 20 7 15 8 6 12,409 22,869

weighted avg. weighted avg. avg.

Borrowers per Staff 131 194 174 135 157 106 81 114 13 229 40 195 172 191

Loans per Staff 131 194 174 135 157 106 81 114 13 229 40 195 172 191

Borrowers per Loan Officer 314 314 352 306 247 267 332 257 44 427 368 324 271 346

Loans per Loan Officer 314 314 352 306 247 267 332 257 44 427 368 324 271 346

Depositors per Staff 0 0 0 0 0 0 0 - - - - - - 1,796

Deposit Accounts per Staff 0 0 0 0 0 0 0 - - - - - - 1,814

Personnel Allocation Ratio 41.7% 61.8% 49.6% 43.9% 63.5% 39.6% 24.5% 44.4% 30.4% 53.6% 11.0% 60.0% 63.6% 55%

8 8 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Risk (in PKR '000)
MFBs

KBL HBL MFB Ubank MMFB NRSP-B TMFB FINCA POMFB Advans SMFB Sub - Total
MFB
Portfolio at Risk > 30 days 2,047,302 2,331,735 1,023,486 1,246,849 2,121,550 2,007,464 2,922,149 216,190 77,711 10,612 14,005,048

Portfolio at Risk > 90 days 915,678 1,687,955 758,111 630,390 1,989,258 1,239,010 1,113,312 174,311 49,160 7,316 8,564,501

Loan Loss Reserve (Balance Sheet) 1,628,791 2,372,208 2,035,615 906,341 2,335,971 1,026,186 868,536 227,987 63,861 13,366 11,478,863

Loan Portfolio Written Off during year 10,757,278 1,295,724 18,156 436,598 1,646,089 3,543,037 1,628,624 158,171 129,176 8,275 19,621,128

Gross Loan Portfolio 72,513,035 59,244,624 36,411,345 38,369,833 30,975,486 11,796,071 19,695,729 5,600,002 2,494,002 957,831 278,057,958

Average Gross Loan Portfolio 67,309,338 51,328,239 33,865,353 31,806,490 30,204,386 12,261,282 20,623,120 4,059,631 1,784,220 758,913 254,000,971

weighted avg. weighted avg.

Portfolio at Risk (>30)-to-Gross Loan Portfolio 2.8% 3.9% 2.8% 3.2% 6.8% 17.0% 14.8% 3.9% 3.1% 1.1% 5.0%

Portfolio at Risk (>90)-to-Gross Loan Portfolio 1.3% 2.8% 2.1% 1.6% 6.4% 10.5% 5.7% 3.1% 2.0% 0.8% 3.1%

Write off-to-Average Gross Loan Portfolio 16.0% 2.52% 0.1% 1.4% 5.4% 28.9% 7.9% 3.9% 7.2% 1.1% 7.7%

Risk Coverage Ratio 79.6% 101.7% 198.9% 72.7% 110.1% 51.1% 29.7% 105.5% 82.2% 0.0% 82.0%

(Loan Loss Reserve-to-Portfolio at Risk > 30 days)

8 9 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Risk (in PKR '000)
NBMFCs

NRSP KASHF Akhuwat ASA-P RCDP TMF DSP SAFCO PRSP JWS-P SRSO

Portfolio at Risk > 30 days 1,604,224 604,911 32,402 563,417 58,331 2,922,149 156,310 146,199 38,596 29,657

Portfolio at Risk > 90 days 1,547,216 213,272 21,361 522,156 40,717 1,113,312 104,194 144,471 37,065 29,472

Loan Loss Reserve (Balance Sheet) 1,562,966 491,484 194,310 210,211 635,853 36,183 868,536 191,160 159,387 38,596 73,153

Loan Portfolio Written Off during year 180,414 500,353 14,518 309,060 82,790 76,538 1,628,624 12,820 153,147 12,537 11,599

Gross Loan Portfolio 18,500,634 16,274,826 21,642,654 14,001,167 4,967,245 3,184,206 19,695,729 2,619,684 822,357 2,712,170 1,620,330

Average Gross Loan Portfolio 20,885,208 14,912,823 17,796,059 12,146,063 4,581,126 4,111,044 20,623,120 2,432,099 1,615,259 2,443,900 1,761,264

weighted avg.
Portfolio at Risk (>30)-to-Gross Loan Portfolio 8.7% 3.7% 0.0% 0.2% 11.3% 1.8% 14.8% 6.0% 17.8% 1.4% 1.8%

Portfolio at Risk (>90)-to-Gross Loan Portfolio 8.4% 1.3% 0.0% 0.2% 10.5% 1.3% 5.7% 4.0% 17.6% 1.4% 1.8%

Write off-to-Average Gross Loan Portfolio 0.9% 3.4% 0.1% 2.5% 1.8% 1.9% 7.9% 0.5% 9.5% 0.5% 0.7%

Risk Coverage Ratio 97.4% 81.2% #DIV/0! 648.8% 0.0% 0.0% 29.7% 122.3% 109.0% 100.0% 246.7%

(Loan Loss Reserve-to-Portfolio at Risk > 30 days)

9 0 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Risk (in PKR '000)
NBMFCs

CEIP FFO MOJAZ Agahe GBTI SVDP SSSF OPD TFCL SRSP FDO VDO

Portfolio at Risk > 30 days 206,635 27,813 34,247 28,522 96,935 42,414 7,792 38 1,456 1,541

Portfolio at Risk > 90 days 162,618 25,980 34,230 25,001 92,739 39,573 4,333 1,722 237 1,386 781

Loan Loss Reserve (Balance Sheet) 124,011 45,572 63,989 41,389 35,737 39,251 2,470 2,453 496 2,010 1,541

Loan Portfolio Written Off during year 21,181 14,028 1,954 1,620 33,978 323 1,157

Gross Loan Portfolio 1,607,298 701,539 799,902 849,993 313,874 313,874 170,691 80,616 163,491 98,752 54,549 30,842

Average Gross Loan Portfolio 1,452,553 527,004 803,904 707,917 370,955 329,281 176,339 88,366 112,153 126,273 481,214 29,858

weighted avg.
Portfolio at Risk (>30)-to-Gross Loan Portfolio 12.9% 4.0% 4.3% 3.4% 30.9% 13.5% 4.6% 0.0% 0.0% 0.0% 2.7% 5.0%

Portfolio at Risk (>90)-to-Gross Loan Portfolio 10.1% 3.7% 4.3% 2.9% 29.5% 12.6% 2.5% 2.1% 0.1% 0.0% 2.5% 2.5%

Write off-to-Average Gross Loan Portfolio 1.5% 2.7% 0.2% 0.0% 0.4% 10.3% 0.0% 0.4% 0.0% 0.9% 0.0% 0.0%

Risk Coverage Ratio 60.0% 0.0% 186.8% 145.1% 36.9% 92.5% 0.0% 6587.0% #DIV/0! #DIV/0! 138.0% 100.0%

(Loan Loss Reserve-to-Portfolio at Risk > 30 days)

9 1 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Risk (in PKR '000)
NBMFCs
Sub - Total
Total NBMFCs Industry

Portfolio at Risk > 30 days 3,972,236 17,977,284

Portfolio at Risk > 90 days 3,266,195 11,830,696

Loan Loss Reserve (Balance Sheet) 3,999,902 15,478,765

Loan Portfolio Written Off during year 1,628,942 21,250,069

Gross Loan Portfolio 94,813,599 372,871,556

Average Gross Loan Portfolio 91,270,898 345,271,869

weighted avg. weighted avg. weighted avg.

Portfolio at Risk (>30)-to-Gross Loan Portfolio 4.2% 4.8%

Portfolio at Risk (>90)-to-Gross Loan Portfolio 3.4% 3.2%

Write off-to-Average Gross Loan Portfolio 1.8% 6.2%

Risk Coverage Ratio 100.7% 86.1%

(Loan Loss Reserve-to-Portfolio at Risk > 30 days)

9 2 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Infrastructure
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Total Assets (PKR '000) 61,928,036 81,557,894 105,443,135 145,186,197 225,316,798 330,422,557 426,585,182 493,299,908 616,610,582 705,010,378

Branches (including Head Office) 1,630 1,606 2,026 2,754 2,430 3,533 4,102 3,802 3,722 3,672

Total Staff 15,153 17,456 21,516 25,560 29,413 36,053 42,048 46,163 44,573 41,259

Growth Rate
Total Assets 27.5% 31.7% 29.3% 37.7% 55.2% 46.6% 29.1% 15.6% 25.0% 14.3%

Branches (including Head Office) 5.2% -1.5% 26.2% 35.9% -11.8% 45.4% 16.1% -7.3% -2.1% -1.3%

Total Staff 6.7% 15.2% 23.3% 18.8% 15.1% 22.6% 16.6% 9.8% -3.4% -7.4%

9 3 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financing Structure
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Total Assets (PKR '000) 61,928,036 81,557,894 105,443,135 145,186,198 225,316,798 330,422,557 426,238,163 493,299,908 616,610,582 705,010,378

Total Equity (PKR '000) 11,679,373 17,049,706 22,873,920 29,688,776 36,535,925 51,343,541 71,877,730 76,279,119 82,981,940 95,028,509

Total Debt (PKR '000) 25,876,598 26,913,359 34,682,369 38,554,959 54,710,855 74,100,602 90,697,783 105,390,934 117,451,206 163,395,870

Commercial Liabilities (PKR '000) 19,361,179 21,662,200 18,679,724 19,030,672 43,167,480 57,114,700 66,409,350 80,151,898 95,728,276 136,526,025

Deposits (PKR '000)* 20,840,990 32,925,558 42,715,846 60,028,340 118,096,732 185,909,781 238,556,412 264,983,900 373,002,084 401,124,869

Gross Loan Portfolio (PKR '000) 33,877,284 46,613,582 63,531,465 90,296,341 132,003,052 196,013,814 255,714,803 301,908,767 318,533,543 372,871,556

Ratios
Equity-to-Asset Ratio 18.9% 20.9% 21.7% 20.4% 16.2% 15.5% 16.9% 15.5% 13.5% 13.5%

Commercial Liabilities-to-Total Debt 74.8% 80.5% 53.9% 49.4% 78.9% 77.1% 73.2% 76.1% 81.5% 83.6%

Debt-to-Equity Ratio 2.22 1.58 1.52 1.30 1.50 1.44 1.26 1.38 1.42 1.72

Deposits-to-Gross Loan Portfolio 61.5% 70.6% 67.2% 66.5% 89.5% 95.3% 93.3% 87.8% 117.1% 107.6%

Deposits-to-Total Assets 33.7% 40.4% 40.5% 41.3% 52.4% 56.5% 56.0% 53.7% 60.5% 56.9%

Gross Loan Portfolio-to-Total Assets 54.7% 57.2% 60.3% 62.2% 58.6% 59.3% 60.0% 61.2% 51.7% 52.9%

9 4 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Outreach
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Active Borrowers 2,040,518 2,392,874 2,997,868 3,632,532 4,225,968 5,512,457 6,687,038 7,440,153 6,979,244 7,912,419

Active Women Borrowers 1,275,387 1,442,197 1,692,451 2,001,772 2,273,389 2,717,487 3,506,009 3,809,463 3,366,951 3,541,248

Gross Loan Portfolio (PKR '000) 33,877,284 46,613,582 63,531,465 90,100,405 132,003,052 196,013,814 255,714,803 301,908,767 318,533,543 372,871,556

Annual per Capita Income (PKR)*** 118,085 143,808 143,808 153,060 153,060 170,508 162,230 162,230 214,539 246,414

Number of Loans Outstanding 2,040,518 2,401,849 2,998,895 3,632,532 4,227,317 5,513,311 6,687,038 7,440,546 6,979,244 7,912,419

Depositors**** 1,730,823 2,150,675 5,675,437 10,661,366 15,937,079 35,844,058 31,869,605 43,962,131 60,024,973 74,356,882

Number of Deposit Accounts 1,730,823 2,998,641 5,675,437 10,661,366 15,937,079 35,939,126 32,020,588 44,359,158 60,897,385 75,089,181

Number of Women Depositors 334,994 837,144 2,503,582 3,009,992 142,784 84,276 4,589,646 8,878,330 13,832,745 20,556,076

Deposits Outstanding 20,840,990 32,925,559 42,715,786 60,028,340 118,096,732 185,909,900 238,556,412 265,937,620 373,002,084 401,093,829

Weighted Avg. Weighted

Weighted Avg. Avg.
Weighted Avg. Weighted Avg. Weighted Avg. Weighted Avg.

Proportion of Active Women Borrowers (%) 62.5% 60.3% 56.5% 55.1% 53.8% 49.3% 52.4% 51.2% 48.2% 44.8%

Average Loan Balance per Active Borrower (PKR) 16,602 19,480 21,192 24,804 31,236 35,558 38,240 40,578 45,640 47,125

Average Loan Balance per Active Borrower/Per Capita Income 14.1% 13.5% 14.7% 16.2% 20.4% 20.9% 23.6% 25.0% 21.3% 19.1%

Average Outstanding Loan Balance (PKR) 16,602 19,407 21,185 24,804 31,226 35,553 38,240 40,576 45,640 47,125

Average Outstanding Loan Balance / Per Capita Income 14.1% 13.5% 14.7% 16.2% 20.4% 20.9% 23.6% 25.0% 21.3% 19.1%

Proportion of Active Women Depositors (%) 19.4% 38.9% 44.11% 28.23% 0.90% 0.24% 14.40% 20.20% 22.71% 27.65%

Average Saving Balance per Active Depositor (PKR) 12,041 15,309 7,526 5,630 7,410 5,187 7,485 6,049 6,214 5,394

Active Deposit Account Balance (PKR) 12,041 10,980 7,526 5,630 7,410 5,173 7,450 5,995 6,125 5,342

9 5 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Financial Performance
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Income from Loan Portfolio 10,040,720 13,542,893 18,581,489 26,007,641 36,582,140 50,540,640 82,133,667 99,240,218 94,778,730 95,351,563
Income from Investments 1,774,610 1,742,975 2,051,547 3,946,607 2,716,932 3,717,490 1,504,694 6,912,061 11,657,364 12,681,157
Income from Other Sources 816,461 2,093,035 3,707,417 2,919,233 2,471,332 11,467,052 5,385,641 4,560,111 4,714,170 14,877,753
Total Revenue 12,631,792 17,378,903 24,340,453 32,873,481 41,770,404 65,725,182 89,024,002 110,712,390 111,150,264 122,910,473
Less : Financial Expense 3,974,467 4,767,589 5,451,197 6,550,481 8,963,917 14,121,730 20,337,250 34,245,848 41,187,339 38,139,644
Gross Financial Margin 8,657,325 12,611,314 18,889,256 26,323,001 32,806,487 51,603,452 68,686,752 76,466,541 69,962,925 84,770,829
Less: Loan Loss Provision Expense 643,991 658,812 794,500 1,258,313 2,504,433 2,832,799 5,039,886 17,683,371 13,230,983 18,524,472
Net Financial Margin 8,013,334 11,952,503 18,094,756 25,064,687 30,302,054 48,770,653 63,646,866 58,783,171 56,731,942 66,246,356
Personnel Expense 3,784,676 5,032,342 6,557,709 8,712,495 11,575,971 15,112,625 18,808,167 25,795,245 27,037,328 28,318,873
Admin Expense 2,886,025 3,880,920 5,951,408 7,244,592 9,076,966 19,019,029 29,877,326 31,316,096 20,489,787 26,539,779
Less: Operating Expense 1,342,633 8,913,262 12,509,117 15,957,087 20,652,937 34,131,654 48,685,493 57,111,340 47,527,115 54,858,652
Other Non Operating Expense 257,651 380,993 1,546,240 2,719,173 772,940 1,638,024 821,616 4,659,948 8,212,298 15,094,585
Net Income before Tax 1,084,982 2,658,248 4,039,399 6,388,427 8,876,178 13,000,975 14,139,757 (2,988,118) 992,529 (3,706,881)
Provision for Tax 152,380 503,118 614,684 1,230,787 1,977,555 3,012,831 4,245,214 2,825,637 2,900,649 1,271,699
Net Income/(Loss) 932,602 2,155,130 3,424,715 5,157,640 6,898,623 9,988,144 9,894,543 (5,813,755) (1,908,120) (4,978,579)
Adjusted Financial Expense on Borrowings 205,943 181,422 113,553 402,632 491,926 677,186 2,092,594 2,493,406 1,497,881 3,585,460
Inflation Adjustment Expense 870 1,152 916 270 722 6,126 1,703 4,247 3,988 4,852
Adjusted Loan Loss Provision Expense 49,456 18,743 13,625 275,656 321,188 310,174 4,956,922 91,484 489,243 200,954
Total Adjustment Expense 256,270 201,317 128,095 678,559 813,820 993,486 7,051,218 2,589,137 1,991,112 3,791,266
Net Income/(Loss) After Adjustments 676,332 1,953,814 3,296,620 4,479,081 6,084,802 8,994,658 2,843,325 (8,402,893) (3,899,232) (8,777,080)
Average Total Assets 57,182,714 70,192,281 95,494,664 125,951,408 178,064,618 284,188,864 405,382,316 459,745,104 553,386,504 647,136,793
Average Total Equity 11,594,943 14,513,187 20,629,780 29,905,254 32,240,189 46,142,667 65,477,485 113,372,981 78,180,526 89,798,353

Ratios
weighted avg. weighted avg.
Adjusted Return-on-Assets 1.2% 3.3% 3.5% 3.6% 3.4% 3.2% 0.7% -1.8% -0.7% -1.4%
Adjusted Return-on-Equity 5.8% 16.1% 16.0% 15.0% 18.9% 19.5% 4.3% -7.4% -5.0% -9.8%
Operational Self Sufficiency (OSS) 109.4% 118.1% 119.9% 124.1% 127.0% 124.7% 118.9% 97.4% 100.9% 97.1%
Financial Self Sufficiency (FSS) 107.0% 116.5% 117.7% 121.0% 123.9% 122.4% 108.7% 95.2% 99.1% 94.3%

9 6 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Operating Income (Figures in PKR '000)

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Revenue from Loan Portfolio 10,040,720 13,542,893 18,581,489 26,007,641 36,582,140 50,540,640 82,133,667 99,240,218 94,778,730 95,351,563

Total Revenue 12,631,792 17,378,903 24,821,486 32,873,481 41,770,404 65,725,182 89,024,002 110,712,390 111,150,264 122,910,473

Adjusted Net Operating Income / (Loss) 828,712 2,456,931 3,286,779 4,474,629 6,084,786 9,222,456 2,837,406 (8,373,865) (3,899,232) (8,777,080)

Average Total Assets 57,182,714 70,192,281 95,494,664 125,951,408 178,064,618 284,188,864 405,382,316 459,745,104 553,386,504 647,136,793

Gross Loan Portfolio (Opening Balance) 25,743,757 34,668,730 48,423,008 63,402,462 89,528,314 132,248,995 178,491,865 264,615,272 301,792,012 316,915,092

Gross Loan Portfolio (Closing Balance) 33,877,284 46,105,712 63,531,465 90,283,337 132,003,052 196,013,814 255,714,803 301,908,767 318,533,543 372,871,556

Average Gross Loan Portfolio 29,810,520 40,387,221 55,977,237 76,842,899 110,765,683 164,131,404 217,103,334 283,262,019 310,162,778 344,893,324

Inflation Rate *** 10.40% 9.20% 8.20% 3.60% 3.70% 4.57% 3.90% 3.90% 8.00% 9.50%

Ratios
weighted avg. weighted avg. weighted avg. weighted avg. weighted avg. weighted avg.

Total Revenue Ratio (Total Revenue-to-Average Total Assets) 22.3% 24.8% 26.0% 26.1% 23.5% 23.1% 22.0% 24.1% 20.1% 19.0%

Adjusted Profit Margin (Adjusted Profit/(Loss)-to-Total Revenue) 7.0% 14.1% 13.2% 13.6% 14.6% 14.0% 3.2% -7.6% -3.5% -7.1%

Yield on Gross Portfolio (Nominal) 34.2% 33.5% 34.6% 34.6% 33.0% 30.8% 37.8% 35.0% 30.6% 27.6%

Yield on Gross Portfolio (Real) 21.6% 22.3% 24.4% 29.9% 29.8% 25.1% 32.7% 30.0% 20.9% 16.6%

9 7 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Operating Expense (Figures in PKR '000)

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Adjusted Total Expense 11,803,080 14,540,979 20,842,120 27,121,782 33,707,341 53,711,567 81,635,662 115,834,968 112,144,858 130,351,176

Adjusted Financial Expense 4,181,281 4,950,162 5,742,091 6,911,552 9,455,843 14,798,916 22,124,334 36,288,824 42,685,220 41,672,513

Adjusted Loan Loss Provision Expense 693,447 677,555 808,125 1,533,970 2,825,622 3,142,973 10,004,220 17,774,855 13,720,226 18,725,426

Adjusted Operating Expense 6,928,352 8,913,262 14,291,904 18,676,260 21,425,876 35,769,678 49,507,108 61,771,289 55,739,413 69,953,237

Adjustment Expense 256,270 201,317 453,639 678,579 813,837 993,486 7,058,630 2,589,137 1,991,112 3,791,266

Average Total Assets 57,182,714 70,192,281 95,494,664 125,951,408 178,064,618 284,188,864 405,382,316 459,745,104 553,386,504 647,136,793

Ratios

Adjusted Total Expense-to-Average Total Assets 20.6% 20.7% 21.8% 21.5% 18.9% 18.9% 20.1% 25.2% 20.3% 20.1%

Adjusted Financial Expense-to-Average Total Assets 7.3% 7.1% 6.0% 5.5% 5.3% 5.2% 5.5% 7.9% 7.7% 6.4%

Adjusted Loan Loss Provision Expense-to-Average Total Assets 1.2% 1.0% 0.8% 1.2% 1.6% 1.1% 2.5% 3.9% 2.5% 2.9%

Adjusted Operating Expense-to-Average Total Assets 12.1% 12.7% 15.0% 14.8% 12.0% 12.6% 12.2% 13.4% 10.1% 10.8%

Adjusted Personnel Expense 6.6% 7.2% 6.9% 6.9% 6.5% 5.3% 4.6% 5.6% 4.9% 4.4%

Adjusted Admin Expense 5.0% 5.5% 6.2% 5.8% 5.1% 6.7% 7.4% 6.8% 3.7% 4.1%

Adjustment Expense-to-Average Total Assets 0.4% 0.3% 0.5% 0.5% 0.5% 0.3% 1.7% 0.6% 0.4% 0.6%

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Operating Efficiency (Figures in PKR '000)

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Operating Expense (PKR 000) 6,928,352 8,913,262 12,745,665 15,957,087 20,652,937 34,131,654 48,685,493 57,111,340 47,527,115 54,858,652

Personnel Expense (PKR 000) 3,784,676 5,032,342 6,794,257 8,712,495 11,575,971 15,112,625 18,808,167 25,795,245 27,037,328 28,318,873

Average Gross Loan Portfolio (PKR 000) 29,810,520 40,387,221 55,977,237 76,842,899 110,765,683 164,131,404 217,103,334 283,262,019 310,162,778 344,893,324

Average Number of Active Borrowers 2,040,518 2,350,650 2,997,868 3,632,532 4,225,968 5,512,457 6,687,038 7,440,153 6,979,244 7,912

Average Number of Active Loans 2,040,518 2,359,625 2,998,895 3,632,532 4,227,317 5,513,311 6,687,038 7,440,546 6,979,244 7,912

weighted avg. Weighted

weighted avg. Avg.
weighted avg. weighted avg. weighted avg. weighted avg. weighted avg. weighted avg.

Adjusted Operating Expense-to-Average Gross Loan Portfolio 23.2% 22.1% 22.8% 20.8% 18.6% 20.8% 22.4% 20.2% 15.3% 15.9%

Adjusted Personnel Expense-to-Average Gross Loan Portfolio 12.7% 12.5% 12.1% 11.3% 10.5% 9.2% 8.7% 9.1% 8.7% 8.2%

Average Salary/Gross Domestic Product per Capita 2.12 2.00 2.2 2.2 2.6 2.5 2.8 3.4 2.83 2.79

Adjusted Cost per Borrower (PKR) 3,395 3,792 4,252 4,393 4,887 6,192 7,281 7,676 6,810 8840.9

Adjusted Cost per Loan (PKR) 3,395 3,777 4,250 4,393 4,886 6,191 7,281 7,676 6,810 8840.9

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Productivity (Figures in PKR '000)

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Number of Active Borrowers 2,040,518 2,255,126 2,997,868 3,632,532 4,225,968 5,512,457 6,687,038 7,440,153 6,979,244 7,912,419

Number of Active Loans 2,040,518 2,263,432 2,997,868 3,632,532 4,227,317 5,513,311 6,687,038 7,440,546 6,979,244 7,912,419

Number of Active Depositors 1,730,823 1,897,872 5,675,437 10,661,366 15,937,079 35,844,058 31,869,605 43,962,131 60,024,973 74,356,882

Number of Deposit Accounts 1,730,823 2,707,872 5,675,437 10,661,366 15,937,079 35,939,126 32,020,588 44,359,575 60,897,385 75,089,181

Total Staff 15,153 15,673 19,227 25,343 29,413 36,705 42,048 46,163 44,573 41,259

Total Loan Officers 7,541 6,892 8,801 9,923 15,342 18,028 21,614 23,870 23,756 22,867

weighted avg. Weighted

weighted avg. Avg.
weighted avg. weighted avg. weighted avg. weighted avg. weighted avg. weighted avg. weighted avg.

Borrowers per Staff 135 144 156 143 144 150 159 161 157 192

Loans per Staff 135 144 156 143 144 150 159 161 157 192

Borrowers per Loan Officer 271 327 341 366 275 306 309 312 294 346

Loans per Loan Officer 271 328 328 366 276 306 309 312 294 346

Depositors per Staff 114 121 295 421 542 977 758 952 1,347 1,802

Deposit Accounts per Staff 114 173 295 421 542 979 762 961 1,366 1,820

Personnel Allocation Ratio 49.8% 44.0% 45.8% 39.2% 52.2% 49.1% 51.4% 51.7% 53.3% 55.4%

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Risk (Figures in PKR '000)

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Portfolio at Risk > 30 days 1,232,842 1,157,297 659,418 1,321,207 1,565,459 1,001,736 3,992,741 11,898,097 10,333,191 17,973,883

Portfolio at Risk > 90 days 1,020,316 932,166 379,637 781,212 1,073,562 1,085,263 1,972,010 7,957,233 6,484,334 11,814,693

Loan Loss Reserve 759,621 708,355 1,189,884 1,468,006 2,814,919 4,202,893 6,266,625 13,416,022 11,775,153 15,436,920

Loan Written Off during Year 675,835 615,293 1,222,076 917,855 1,147,319 1,581,598 1,091,556 8,671,416 14,285,825 21,258,154

Gross Loan Portfolio 33,877,284 46,105,712 63,531,465 90,081,589 132,003,052 196,013,814 255,714,803 301,908,767 318,533,543 372,871,556

Average Gross Loan Portfolio 29,810,520 40,387,221 55,977,237 76,690,720 110,765,683 164,131,404 217,103,334 283,262,019 310,162,778 344,893,324

weighted avg. Weighted

weighted avg. Avg.
weighted avg. weighted avg. weighted avg. weighted avg. weighted avg. weighted avg.

Portfolio at Risk (>30)-to-Gross Loan Portfolio 3.6% 2.5% 1.0% 1.5% 1.2% 0.5% 1.6% 3.9% 3.2% 4.8%

Portfolio at Risk (>90)-to-Gross Loan Portfolio 3.0% 2.0% 0.6% 0.9% 0.8% 0.6% 0.8% 2.6% 2.0% 3.2%

Write Off-to-Average Gross Loan Portfolio 2.3% 1.5% 2.2% 1.2% 1.0% 1.0% 0.5% 3.1% 4.6% 5.7%

Risk Coverage Ratio (Adjusted Loan Loss Reserve-to-Portfolio 61.6% 61.2% 180.4% 111.1% 179.8% 419.6% 157.0% 112.8% 114.0% 4.1%

at Risk > 30 days)

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Annex C: Adjustments
to Financial Data
Rationale
• Adjustments to financial statements are made when doing benchmark analysis. They are made for two primary reasons:

• to give an institution a more accurate picture of its financial position by accounting for factors unique to an MFP, including the
predominance of below-market-rate funding sources as such factors distort an MFP’s on-going performance; and
• to make the data of various MFPs comparable.

Thus, adjustments are made in order to bring organisations operating under varying conditions and with varying levels of subsidy
onto a level playing field.

The following adjustments are made to data used for the PMR:

A. Inflation Adjustment
B. Subsidies Adjustment
C. Loan Loss Provisioning

A. Inflation Adjustment

Inflation adjustment adjusts for the effect of inflation on an MFP’s equity and non-monetary assets, i.e. fixed assets. Inflation
decreases the real value of an MFP’s equity. As the monetary value of fixed assets increases, it is possible to track increases in price
levels. The net loss (or gain) is considered to be a cost of funds, and results in a decrease (or increase) in net operating income.

Calculation of inflation adjustment

• Inflation-adjusted revenue
=net fixed assets (prior FY)×average annual inflation rate (current FY)
• Inflation-adjusted expense
=equity (prior FY) ×average annual inflation rate (current FY)
• Net Inflation-adjusted expense
=inflation"-" adjusted revenue- inflation"-" adjusted expense

B. Subsidies Adjustment
Adjustments for three types of subsidies are made:

B.1 A cost-of-funds subsidy from loans at interest free rate

B.2 Current-year cash donations to fund portfolio and cover expenses
B.3 In-kind subsidies, such as rent-free office space or the services of personnel not paid by the MFP and thus not reflected on its
income statement

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Additionally, for multipurpose MFPs, an attempt to isolate the performance of the financial services programme is made by removing
the effect of any cross-subsidisation. Cash donations flowing through the income statement are accounted for by reclassifying them
below net operating income in the income statement. Thus, adjustments for cash donations are not made since these are handled
through a direct reclassification in the income statement. This year no MFP has disclosed receipt of any in-kind subsidy.

B.1 Cost-of-funds Subsidy

The cost-of-funds adjustment reflects the impact of soft loans on the financial performance of an MFP. The analyst needs to
calculate the difference between what an MFP actually paid in interest on its subsidised liabilities and a shadow market rate for each
country. This difference represents the value of the subsidy, considered an additional financial expense. Only funds received as loans
that have a finite (1-5 years) term length need to be adjusted. Client deposits are not adjusted. Subordinated debt and other
quasi-equity accounts are reclassified as ‘other equity’ on the balance sheet.

Care is taken in the choice of an appropriate shadow rate, thus PMN has used the KIBOR rate on outstanding loans as reported by
the State Bank of Pakistan on its website (10.75%) to make this adjustment.

Steps in calculation of cost-of-funds subsidy adjustment

1. Calculate the figure interest free borrowings. Borrowings do not include deposits or “other liabilities”. If an MFI has given an
average balance, see if this is more appropriate to use; if not, calculate the average from last year’s ending balance.
2. Multiply by the shadow market rate.
3. Compare with the amount actually paid in interest and fees. If less than “market” rate, impute the difference (market price minus
financial expense paid on borrowings) to the subsidised cost-of-funds adjustment expense.

B.2 Cash Donations

Funds donated to cover operational costs constitute a direct subsidy to an MFP. The value of the subsidy is therefore equal to the
amount donated to cover expenses incurred in the period reported. Some donations are provided to cover operating shortfall over
a period greater than one year. Only the amount spent in the year is recorded on the income statement as revenue. Any amount still
to be used in subsequent years appears as a liability on the balance sheet (deferred revenue). This occurs because theoretically, if an
MFP stopped operations in the middle of a multi-year operating grant, it would have to return the unused portion of the grant to the
donor. The unused amount is therefore, considered as a liability.

Funds donated to pay for operations should be reported on the income statement separately from the revenue generated by lending
and investment activities. This practice is meant for accurately reporting the earned revenue of an MFP. Donated funds are deducted
from revenue or net income prior to any financial performance analysis because they do not represent revenue earned from
operations.

Note: Costs incurred to obtain donor funds (fundraising costs) should also be separated from operating expenses, because the
benefit of receiving the funds is not included.

B.3 In-kind Subsidy

Imputed costs (book value) of donated/loaned-out vehicles, machinery and buildings need to be included in operating expenses.
Expatriate staff salaries paid by the donor or parent company, or other technical assistance, need to be accounted for. Here, imputed
salaries are used instead of salaries actually received by them, i.e. the salary range that a local hire would get for the same level of
workload/position is used.

Note: The analyst must use his/her judgment in deciding whether or not the in-kind donation represents a key input to the ongoing
operations of the MFP. An appropriate basis for valuation is important. This could include selecting a percentage of the total cost and
attributing it to programme expense. The percentage may be selected on the basis of sales proportion, management input, etc.

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Calculation of in-kind subsidy adjustment

Add the in-kind subsidy of a given operating expense account to the unadjusted number for the account.

C. Loan Loss Provisioning

PMN standardises loan loss provisioning for MFPs to a minimum threshold or risk. MFPs vary tremendously in accounting for loan
delinquency. Some count the entire loan balance as overdue the day a payment is missed. Others do not consider a loan delinquent
until its full term has expired. Some MFPs write off bad debt within one year of the initial delinquency, while others never write off bad
loans, thus carrying forward a default that they have little chance of ever recovering.

The analyst applies a standard loan loss provisioning to all MFPs and adjusts where necessary to bring them to the minimum
threshold. In some cases, these adjustments may not be precise. Portfolio aging information may only be available on different aging
scales.

Steps in calculation of loan loss provisioning adjustment

1. Multiply the PAR age categories by the following reserve factors:

• PAR up to 90 days – no provisioning
• PAR 91-180 days x 0.50
• PAR 181-360 days x 1.00
• Renegotiated loans x 0.50
2. Add the above reserve calculations. If the sum is more than the current reserves, make calculated the reserve the new loan loss
reserve. If not, keep the current reserves.
3. Add the unadjusted loan loss provision expense to the difference between the adjusted net loan portfolio and the unadjusted
net loan portfolio. This is the adjusted loan loss provision expense.

Age
The number of years an organisation has been functioning as a microfinance provider (MFP).

Active Saving Account Balance

The average balance of savings per account (as opposed to average balance of savings per depositor).

Adjustment Expense
Total adjustment cost related to inflation, subsidized cost of borrowing, loan loss provisioning and in-kind subsidies.

Adjusted Financial Expense Ratio

The adjusted financial expense ratio is calculated by using the standardised ageing-of-portfolio technique. The principle of
conservatism is used hence loan loss provision in audited accounts is greater than the amount computed by the analyst.

Adjusted Loan Loss Reserve

Formula = (adjusted financial expense)/(adjusted average total assets)

Adjusted Operating Expense

Also included in operating expense:
Imputed cost (book value) of donated/loaned vehicles, machinery and buildings
Expatriate staff salaries paid by donor or parent company

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 Other technical assistance paid for with donations
Formula = personal expense+administration expense
Note: Imputed salaries should be used instead of salaries actually received by such persons. Thus, the salary range that a local hire
would get for the same level of workload/position should be used. Judgment is used to decide whether or not the in-kind donation
represents a key input to the ongoing operations of the MFP.

Adjusted Operating Expense Ratio

Formula = (adjusted operating expense)/(adjusted average total assets)

Adjusted Portfolio at Risk > (30, 60, 90 Days)

Indicates the credit risk of a borrower above the specified number of days (30, 60, 90) past his/her due date for instalment payment.
Formula = (outstanding balance less loans overdue > 30 or 60 or 90 days)/(adjusted gross loan portfolio)

Adjusted Cost per Borrower

Accounts for loan size differentials. Generally the operating expense ratio is lower (more efficient) for institutions with higher loan
sizes, ceteris paribus. This indicator discounts the effect of loan size on efficient management of loan portfolio.
Formula = (adjusted operating expense)/(average number of active borrowers)

Adjusted Cost per Loan

Formula = (adjusted operating expense)/(average number of active loans)

Adjusted Financial Expense

Includes actual cost of borrowing and shadow cost of subsidised funding.
Adjusted Financial Expense on Borrowing
The cost-of-funds adjustment reflects the impact of soft loans on the financial performance of the institution. The analyst calculates
the difference between what the MFP actually paid in interest on its subsidised liabilities and what it would have paid at a shadow
market rate for each country. This difference represents the value of the subsidy, considered an additional financial expense.

Adjusted Loan Loss Provision Expense Ratio

Formula = (adjusted net loan loss provision expense)/(adjusted average total assets)

Adjusted Loan Loss Provision Expense

Loan loss provision expense is calculated with the standardised ageing-of-portfolio technique. It is, however, ensured that if the
actual loan loss provision expense is higher than the adjusted number then the conservatism principle is followed.

Adjusted Operating Expense

Includes actual operational expenses and in-kind subsidy adjustments.

Adjusted Operating Expense Ratio

Indicative of the efficiency of an MFP’s loan portfolio.
Formula = (adjusted operating expense)/(average gross loan portfolio)

Adjusted Personnel Expense

Includes actual personnel expenses (salaries and benefits), and in-kind subsidy adjustments.

Adjusted Personnel Expense Ratio

Formula = (adjusted personnel expense)/(average gross loan portfolio)

Adjusted Profit Margin

Formula = (adjusted net operating income)/(adjusted financial revenue)

Adjusted Return on Assets

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Formula = (adjusted net operating income, net of taxes)/(average total assets)

Adjusted Return on Equity

Formula = (adjusted net operating income, net of taxes)/(average total equity)

Adjusted Total Expense

Includes all actual and adjusted expenses related to operations, cost of borrowings, loan losses and inflation adjustment.

Adjusted Total Expense Ratio

Formula = (adjusted (financial expense + net loan loss provision expense + operating expense) cost)/(average total assets)

Average Gross Loan Portfolio

Average of opening and closing balance of gross loan portfolio.

Average Loan Balance per Active Borrower

Indicates average loan balance outstanding.

Average Loan Balance per Active Borrower to Per Capita Income

Used to measure depth of outreach. The lower the ratio the more poverty-focused the MFP.

Average Number of Active Borrowers

The average of opening and closing balance of active borrowers.
Formula = (active borrowers (opening balance) + active borrowers (closing balance))/2
Average Number of Active Loans
Average of opening and closing balance of active loans

Average Outstanding Balance

Indicates the average balance of loans outstanding.
Formula = (adjusted gross loan portfolio)/(adjusted number of loans outstanding)

Average Outstanding Balance to Per Capita Income

Measure of depth of outreach. The lower the ratio the more poverty-focused the MFP.
Formula = (average outstanding balance)/(per capita income)

Average Saving Balance per Saver

Indicates average amount of saving balance per saver.

Average Total Assets

Average of opening and closing balance of total assets.

Average Total Equity

Average of opening and closing balance of total equity.

Borrowers per Loan Officer

Measure of loan officer productivity indicating the number of borrowers managed by a loan officer.
Formula = (number of active borrowers)/(number of loan officers)

Borrowers per Staff

Measure of staff productivity, indicating the number of borrowers managed by the staff on average.
Formula = (number of active borrowers)/(number of total personnel)

Commercial Liabilities

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The principal balance of all borrowings, including overdraft accounts, for which the organisation pays a nominal rate of interest that
may be greater than or equal to the local commercial interest rate.

Commercial Liabilities-to-Gross Loan Portfolio Ratio

Indicates efficiency of an MFP’s loan portfolio.
Formula = (all liabilities at "market" price)/(gross loan portfolio)

Deposits
Demand deposits from the general public and members (clients) held with the institution. These deposits are not conditional to
accessing a current or future loan from the MFP and include certificates of deposit or other fixed term deposits.

Deposit-to-Gross Loan Portfolio Ratio

Inverse of the advance-to-deposit ratio.
Formula = deposits/(gross loan portfolio)

Deposit-to-Total Asset Ratio

Indicates the percentage of assets financed through deposits.
Formula = deposits/(total assets)

Equity-to-Asset Ratio
This is a simple version of the capital adequacy ratio as it does not take into account risk weighted assets. This ratio indicates the
proportion of a company’s equity that is accounted for by assets.
Formula = (total equity)/(total assets)
Financial Expense
Total of financial expense on liabilities and deposits.

Financial Revenue
Total revenue from loan portfolio and other financial assets, as well as other financial revenue from financial services.

Financial Revenue from Other Financial Assets

Net gains on other financial assets.

Financial Revenue from Loan Portfolio

Total interest, fees and commission on loan portfolio.

Financial Revenue Ratio

Indicates the efficiency with which an MFP is utilising its assets to earn income from them.
Formula = (financial revenue)/(average total assets)

Financial Self-Sufficiency
Formula = (financial revenue)/(adjusted expenses (financial + net loan loss provision + operating) + inflation adjustment)

Gross Loan Portfolio

The outstanding principal for all outstanding client loans, including current, delinquent and restructured loans. It does not include:
loans that have been written-off;
interest receivable; and
employee loans.
For accounting purposes, the gross loan portfolio is categorised as an asset.

Gross Loan Portfolio-to-Total Asset Ratio

Indicates the efficiency of assets deployed in high yield instruments and core business of an MFP.
Formula = (gross loan portfolio)/(total assets)

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Inflation Adjustment Expense
Inflation decreases the real value of an MFP’s equity. Fixed assets are considered to track the increase in price levels, and their value
is considered increased. The net loss (or gain) treated as a cost of funds is disclosed on the income statement and decreases net
operating income.

Inflation Rate
The rate at which prices increase over time, resulting in a fall in the purchasing value of money. This rate is derived from the annualised
consumer price index (CPI) as reported by the State Bank of Pakistan.

Liabilities-to-Equity Ratio (Debt-Equity Ratio)

Formula = (total liabilities)/(total equity)

Loan Loss Provision Expense

The sum of loan loss provision expense and recovery on loan loss provision.

Loans per Loan Officer

Formula = (number of active loans)/(number of loan officers)

Loans per Staff

Formula = (number of active loans)/(number of personnel)

Net Adjusted Loan Loss Provision Expense

The sum of loan loss provision expense and recovery on loan loss provision. MFPs vary tremendously in accounting for loan
delinquency. Some count the entire loan balance as overdue the day a payment is missed. Others do not consider a loan delinquent
until its full term has expired. Some MFPs write off bad debt within one year of the initial delinquency, while others never write off bad
loans, thus carrying forward a defaulting loan that they have little chance of ever recovering.

Number of Active Borrowers

Number of borrowers with loans outstanding.

Number of Active Loans

The number of loans that have been neither fully repaid nor written off, and thus are part of the MFP’s gross loan portfolio.

Number of Active Women Borrowers

Number of women borrowers with loan amount outstanding.

Number of Active Women Borrowers to total Active Borrowers

Indicates percentage of women borrowers to total active borrowers.

Number of Loans Outstanding

The number of loans outstanding at the end of the reporting period. Depending on the policy of the MFP, one borrower can have two
or more loans outstanding; hence, the number of loans could be more than the number of borrowers.

Number of Savers
The number of depositors maintaining voluntary demand deposit and time deposit accounts with an MFP.

Number of Saving Accounts

One depositor can have more than two deposit accounts. Hence, the number of deposit accounts could be more than the number
of depositors.

Number of Women Savers

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The number of women savers with voluntary demand deposit and time deposit accounts.

Offices
The total number of staffed points of service (POS) and administrative sites (including head office) used to deliver or support the
delivery of financial services to microfinance clients.

Operating Expense
Total of personnel expense and administrative expense.

Operational Self-Sufficiency
Formula = (financial revenue)/(financial expense + net loan loss provision expense + operating expense)

Per Capita Income

Average income per person.

Percentage of Women Savers to Total Savers

Indicates the percentage of women in the total saving portfolio.

Personnel
The number of individuals actively employed by an MFP. This number includes contract employees and advisors who dedicate the
majority of their time to the organisation, even if they are not on the MFP’s roster of employees. This number is expressed as a
full-time equivalent, such that an advisor who spends two-thirds of his/her time with the MFP is accounted for as two-thirds of a
full-time employee.

Personnel Allocation Ratio

The higher this indicator is, the more lean the head office structure of the organisation. This indicator is used to measure
organisational efficiency.
Formula = (loan officers)/(total staff)

Risk Coverage Ratio

Indicates the provision created by an MFP against its credit risk.
Formula = (adjusted loan loss reserve)/(PAR > 30 days)

Saving Outstanding
Total value of demand deposit and time deposit accounts.

Savers per Staff

Formula = (number of savers)/(number of personnel)

Loan Loss Provision Expense

The sum of loan loss provision expense and recovery on loan loss provision.

Loans per Loan Officer

Formula = (Number of Active Loans)/(Total Loan Officers)

Total Assets
Total net asset accounts, i.e. all asset accounts net of any allowance. The one exception to this is the separate disclosure of the gross
loan portfolio and loan loss reserve.

Total Equity
Equity represents the worth of an organisation net of what it owes (liabilities). Equity accounts are presented net of distributions, such
as dividends.

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Formula = total assets-total liabilities

Total Liabilities
Liabilities represent the borrowings of an organisation, i.e. the amount owed. Examples of liabilities include loans and deposits. This
number includes both interest-bearing and non-interest-bearing liabilities of an MFP.

Total Number of Loan Officers

The number of staff members who dedicate the majority of their time to direct client contact. Front office staff include more than
those typically qualified as credit or loan officers. They may also include tellers, personnel who open and maintain accounts — such
as savings accounts — for clients, delinquent loan recovery officers, and others whose primary responsibilities bring them in direct
contact with microfinance clients.

Loans Written Off during Year

The value of loans written off during the year.

Write-Off Rate
Formula = (loans written off during the year)/(average gross loan portfolio)

Yield on Gross Portfolio (Nominal)

Indicates the yield on an MFP’s loan portfolio and is usually used as a proxy to look at the MFP’s (realized) effective interest rate.
Formula = (financial revenue from loan portfolio)/(average gross loan portfolio)

Yield on Gross Portfolio (Real)

The number of depositors maintaining voluntary demand deposit and time deposit accounts with an MFP.
Formula = (yield on gross portfolio (nominal) - inflation rate)/(1 + inflation rate)

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Annex D: Social
Performance Indicators
Microfinance Bank KBL TMFB NRSP Bank FINCA ADVANS MMFB SMFB
Social Goals
1.1 Target market Clients living in rural areas 1 1 1 1 1 1 1
Clients living in urban areas Women 1 1 1 1 1 1
Adolescents and youth (below 18) 1 1 1 1 1 1
None of the above

1.2 Development Increased access to financial services 1 1 1 1 1 1 1

goals Poverty reduction 1 1 1 1 1 1
Employment generation 1 1 1 1 1 1
Development of start-up enterprises
Growth of existing businesses 1 1 1 1 1 1 1
Improvement of adult education
Youth opportunities
Children's schooling
Health improvement
Gender equality and women's 1 1 1 1 1
empowerment 1
Water and sanitation 1 1
Housing 1
None of the above

1.3 Poverty level Very poor clients 1

Poor clients 1 1
Low income clients 1 1 1 1 1 1 1
No specific poverty target

1.4 Does MF Yes 1 1 1

measure poverty No 1 1 1
Unknown 1

1.5 Poverty Grameen Progress out of

measurement tool Poverty Index (PPI)
USAID Poverty Assessment 1 1 1
Tool (PAT) 1
Per capita household
expenditure
Per capita household income
Participatory Wealth Ranking
(PWR) 1
Housing index 1 1 1
Food security index
Means test
Own proxy poverty index
None of the above

1 1 1 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 KBL TMFB NRSP Bank FINCA ADVANS MMFB SMFB

3.3 Types of Education loans 1

non-income Emergency loans 1 1 1
Housing loans 1 1 1 1
generating loans
Other household 1 1 1
needs/consumption 1
None of the above

3.4 Types of Compulsory sacings 1

savings products accounts 1 1 1 1 1 1 1
Voluntary savings accounts
Does not offer savings
accounts

3.5 Types of Demand deposit accounts 1 1 1 1 1

voluntary Time deposit accounts 1 1 1 1 1 1 1
None of the above
savings products

3.6 Compulory Yes 1 1 1 1 1

insurance required No 1 1
Unknown

3.7 Types of Credit life insurance 1 1 1 1 1

compulory Life/accident insurance 1
Agriculture insurance 1 1
insurance
None of the above 1 1
required

3.8 Voluntary Yes 1 1 1 1

insurance No 1 1
Unknown 1
offered

3.9 Types of Credit life insurance 1

voluntary Life/accident insurance 1
Agriculture insurance 1 1
insurance
Health insurance 1 1 1
offered House insurance
Workplace insurance
None of the above 1

3.10 Other Yes 1 1 1 1

financial No 1 1
Unknown
services
offered

3.11 Types of Debit/credit card 1 1 1 1

other financial Mobile/branchless banking 1 1
services
services offered
Savings facilitation
services
Remittance/money
transfer services
Payment services
Microleasing
Scholarship/educational
grants
None of the above

1 1 2 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Microfinance Bank KBL TMFB NRSP Bank FINCA ADVANS MMFB SMFB
Social Goals
3.12 Enterprise Yes 1 1
services offered No 1 1 1 1 1
Unknown

3.13 Types of Enterprise skills

enterprise development 1
Business development 1 1 1 1
services
services
offered None of the above

3.14 Women's Yes 1 1

enpowerment No 1 1 1 1 1
Unknown
services

3.15 Types of Leadership training 1

women's for women 1 1

empowerment
services offered
3.16 Education Yes 1 1 1 1 1
services offered No 1 1
Unknown

3.17 Types of Financial literacy education 1 1 1 1

education Basic health/nutrition 1 1
education 1
services offered
Child and youth education
Occupational health and
safety in the workplace
education
None of the above

3.18 Health Yes

No
services offered 1 1 1 1 1 1 1
Unknown

3.19 Types of Basic medical services

Special medical services
health services
for women and children 1 1 1 1 1 1
offered None of the above

Client Protection

4.1 Do policies Yes 1 1 1 1 1 1

support good No
Partially 1
repayment
Unknown
capacity analysis

4.2 Does internal Yes 1 1 1 1 1 1 1

audit verify No
Partially
compliance
Unknown
with policies

1 1 3 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Microfinance Bank KBL TMFB NRSP Bank FINCA ADVANS MMFB SMFB
Social Goals
4.3 The institution Yes 1 1 1 1 1 1 1
fully discloses to No
the clients all prices, Partially
installments, terms, Unknown
and conditions of
all financial
products, including
all charges and
fees, associated
prices, penalties,
linked products,
third party fees,
and whether these
can change over
time.

4.4 The institution Yes 1 1 1 1 1 1 1

clearly presents to No
clients the total Partially
amount that the Unknown
client pays for the
product, regardless
of local regulations
(including in the
absence of
industry-wide

4.5 The institution Yes 1 1 1 1 1 1 1

clearly spells out No
in a Code of Partially
Conduct (i.e., in Unknown
Code of Conduct,
Code of Ethics,
Book of Employee
Rules) the specific
standards of
professional
conduct that are
expected of all
employees involved
in collections
(including third
party staff).

4.6 The institution Yes 1 1 1 1 1 1 1

sanctions cases No
of violations of the Partially
Code of Conduct Unknown
or collections
policies (identified
by management,
internal audit or
an efficient
complaint
mechanism)
according to
set rules.

1 1 4 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Microfinance Bank KBL TMFB NRSP Bank FINCA ADVANS MMFB SMFB
Social Goals
4.7 The Yes 1 1 1 1 1 1 1
institution's No
policies include Partially
how to handle Unknown
complaints.
They include
how to inform
clients about the
complaint
mechanism. The
institution's
clients receive a
timely

4.8 The Yes 1 1 1 1 1 1 1

institution's No
contracts Partially
include a data Unknown
privacy clause,
describing how
and when data
can be shared
(in addition to
credit bureau
information).

4.9 How interest Declining balance interest 1 1 1 1 1

rate of most method 1 1 1
representative Flat interest method
credit product is
stated

Environment

5.1 Environmental Awareness raising on 1 1 1 1 1

policies in place environmental impacts
Clauses in loan contracts
requiring clients to imrove
environmental
practices/mitigate
environmental risks 1 1 1 1 1
Tools to evaluate
environmental risks of clients'
activities 1 1 1 1 1 1
Specific loans linked to
environmentally friendly
products and/or practices
None of the above 1

5.2 Types of Products related to 1 1 1

environmental renewable energy (e.g. solar
ly friendly panels, biogas digesters etc) 1 1 1
products Products related to energy 1 1 1
and/or efficiency (e.g. insulation,
practices improved cooking stove etc)
offered Products related to
environmentally friendly
practices (e.g. organic
farming, recycling, waste
management etc)
None of the above

1 1 5 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 MFB NBMFC

1.1 Target market Clients living in rural areas 7 20

Clients living in urban areas 6 18
Women 6 19
Adolescents and youth 0 4
(below 18) 0 0
None of the above

1.2 Development Increased access to 7 20

goals financial services 5 19
Poverty reduction 6 12
Employment generation 0 9
Development of start-up 7 17
enterprises 0 1
Growth of existing 0 5
businesses 0 4
Improvement of adult 0 4
education 5 14
Youth opportunities 1 2
Children's schooling 3 3
Health improvement 0 0
Gender equality and
women's empowerment
Water and sanitation
Housing
None of the above

1.3 Poverty level Very poor clients 1 6

Poor clients 2 18
Low income clients 7 20
No specific poverty target 0 3

1.4 Does MFP Yes 3 16

measure poverty No 3 4
Unknown 1 0

1.5 Poverty Grameen Progress out of 0 3

measurement tool Poverty Index (PPI) 0 1
USAID Poverty 3 3
Assessment Tool (PAT) 1 7
Per capita household 0 3
expenditure 0 0
Per capita household 0 0
income 0 0
Participatory Wealth 1 3
Ranking (PWR) 3 3
Housing index
Food security index
Means test
Own proxy poverty index
None of the above

1 1 6 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Governance and HR MFB NBMFC

2.1 Board 7 17
No 0 2
orientation
Unknown 0 0
of social mission

2.2 SPM champion/ No 4 10

Unknown 3 10
committee at Board
0 0

2.3 Board No 7 19
Unknown 0 0
experience
0 1
in SPM

2.4 Staff Number of clients 5 11

Quality of interactionw ith 3 4
incentives
clients based on client 0 2
related to SP feedback mechanism 7 13
Quality of social data 0 5
collected
Portfolio quality
None of the above

2.5 How number Incentive on "total number 5 8

of clients" 3 7
of clients is
Incentive on "number of 4 8
incentivized new clients" 0 7
Incentive on "client
retention"
None of the above

2.6 HR policies Social protection (medical 6 18

insurance and/or pension 6 14
related to SP
contribution) 7 20
Safety policy 6 15
Anti-harassment policy 6 19
Non-discrimination policy 0 0
Grievance resolution policy
None of the above

Products and Services

3.1 Types of Income generating loans 7 19
4 7
credit products Non-income generating
loans 0 2
Does not offer credit
products

3.2 Types of income Microenterprise loans 7 20

2 6
generating loans SME loans
Agriculture/livestock loans 6 17
Express loans 0 1
None of the above

3.3 Types of Education loans 1 6

3 4
non-income Emergency loans
Housing loans 4 3
generating loans 3 8
Other household
needs/consumption 1 10
None of the above

1 1 7 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 MFB NBMFC

3.4 Types of Compulsory sacings 1 1

accounts 7 2
savings products
Voluntary savings accounts 0 18
Does not offer savings
accounts

3.5 Types of Demand deposit accounts 4 10

Time deposit accounts 3 10
voluntary savings
None of the above 0 0
products

3.6 Compulory Yes 5 14

No 2 6
insurance required
Unknown

3.7 Types of Credit life insurance 5 8

Life/accident insurance 1 5
compulory
Agriculture insurance 2 0
insurance required None of the above 2 6

3.8 Voluntary Yes 4 5

No 2 15
insurance offered
Unknown 0 0

3.9 Types of Credit life insurance 1 3

Life/accident insurance 1 2
voluntary insurance
Agriculture insurance 2 0
offered Health insurance 3 3
House insurance 0 0
Workplace insurance 0 0
None of the above 1 13

3.10 Other financial Yes 5 4

No 2 15
services offered
Unknown 0 1

3.11 Types of other Debit/credit card 5 0

Mobile/branchless banking 5 3
financial services
services 3 1
offered Savings facilitation 3 0
services 4 0
Remittance/money 0 0
transfer services 0 0
Payment services 1 15
Microleasing
Scholarship/educational
grants
None of the above

3.12 Enterprise Yes 2 16

No 5 4
services offered
Unknown 02 0
5
0

3.13 Types of Enterprise skills development 0 15

Business development services 1 8
enterprise services
None of the above 4 5
offered

1 1 8 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 MFB NBMFC

3.14 Women's Yes 2 14

No 5 6
enpowerment
Unknown 0 0
services

3.15 Types of Leadership training for 1 12

women 2 10
women's
Women's rights 0 3
empowerment education/gender issues 4 6
services offered training
Counseling/legal services
for female victims of
voilence
None of the above

3.16 Education Yes 4 15

No 3 4
services offered
Unknown 0 1

3.17 Types of Financial literacy education 4 14

Basic health/nutrition 0 11
education services
education 0 8
offered Child and youth education 0 1
Occupational health and 3 5
safety in the workplace
education
None of the above

3.18 Health Yes 0 9

No 7 9
services offered
Unknown 0 2

3.19 Types of Basic medical services 0 5

Special medical services 0 3
health services
for women and children 6 11
offered None of the above

Client Protection

4.1 Policies Yes 6 16

No 0 4
Supporting Good
Partially 1 0
Repayment Capacity Unknown 0 0
Analysis

4.2 Internal Audit Yes 7 17

No 0 2
Verify Compliance
Partially 0 0
With Policies Unknown 0 0

4.3 Prices, Yes 7 19

No 0 1
Installments, Terms,
Partially 0 0
and Conditions Unknown 0 0
Fully Disclosed to
Clients

1 1 9 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 MFB NBMFC

4.4 Annual Yes 7 19

No 0 0
Percentage
Partially 0 0
Rates (APR) of Unknown 0 1
Loan Products
Disclosed

4.5 Code of Yes 7 19

No 0 0
Conduct is
Partially 0 0
Clearly Defined Unknown 0 0

4.6 Violations of Yes 7 19

No 0 0
Code of Conduct
Partially 0 1
Sanctioned Unknown 0 0

4.7 Clear Yes 7 20

No 0 0
Reporting System
Partially 0 0
for Clients' Unknown 0 0
Complaints

4.8 Contracts Yes 7 20

No 0 0
Include a Data
Partially 0 0
Privacy Clause Unknown 0 0

4.9 How interest Declining balance 5 10

interest method 3 13
rate of most
Flat interest method
representative
credit product is
stated

Environment

5.1 Awareness raising 5 17

on environmental 5 13
Environmental
impacts 5 8
policies in place Clauses in loan 2 11
contracts requiring 0 1
clients to imrove
environmental
practices/mitigate
environmental risks
Tools to evaluate
environmental risks
of clients' activities
Specific loans
linked to
environmentally
friendly products
and/or practices
None of the above

1 2 0 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 MFB NBMFC

5.2 Types of Products related to 3 11

renewable energy (e.g. solar 0 0
environmentally
panels, biogas digesters etc) 3 7
friendly Products related to energy 3 4
products and/or efficiency (e.g. insulation,
practices improved cooking stove etc)
offered Products related to
environmentally friendly
practices (e.g. organic
farming, recycling, waste
management etc)
None of the above

1 2 1 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Non Banking
MicroFinance
Company's
SOCIAL GOALS AGAHE ASA-P Akhuwat CSC FFO JWS Kashf Foundation TFCL RCDP SSF SSSF FDO DSP GBTI VDO NRSP SRSP PRSP SRSO TMF

1.1 Target market Clients living in rural areas 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Clients living in urban areas 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Women 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Adolescents and youth (below 18) 1 1 1 1
None of the above

1.2 Development Increased access to financial services 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Poverty reduction 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
goals
Employment generation 1 1 1 1 1 1 1 1 1 1 1 1
Development of start-up enterprises 1 1 1 1 1 1 1 1 1
Growth of existing businesses 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Improvement of adult education 1
Youth opportunities 1 1 1 1 1
Children's schooling 1 1 1 1
Health improvement 1 1 1 1
Gender equality and women's empowerment 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Water and sanitation 1 1
Housing 1 1 1
None of the above

1.3 Poverty level Very poor clients 1 1 1 1 1 1

Poor clients 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Low income clients 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
No specific poverty target 1 1 1

1.4 Does MFP Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

No 1 1 1 1
measure poverty
Unknown

1.5 Poverty Grameen Progress out of Poverty Index (PPI) 1 1 1

USAID Poverty Assessment 1
measurement tool Tool (PAT)
1 1 1
Per capita household expenditure
Per capita household income 1 1 1 1 1 1 1
Participatory Wealth Ranking (PWR) 1 1 1
Housing index
Food security index
Means test
Own proxy poverty index
None of the above 1 1 1 1 1
1

1 2 2 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Governance
and HR SOCIAL GOALS AGAHE ASA-P Akhuwat CSC FFO JWS Kashf Foundation TFCL RCDP SSF SSSF FDO DSP GBTI VDO NRSP SRSP PRSP SRSO TMF

Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
2.1 Board 1 1
orientation of No
social mission Unknown

Yes 1 1 1 1 1 1 1 1 1 1
2.2 SPM champion/ 1 1 1 1 1 1 1 1 1 1
committee at Board No
Unknown

Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
2.3 Board
experience No
Unknown 1
in SPM

Number of clients 1 1 1 1 1 1 1 1 1 1 1
2.4 Staff incentives 1 1 1 1
related to SP Quality of interactionw ith clients
based on client feedback 1 1
mechanism 1 1 1 1 1 1 1 1 1 1 1 1 1
Quality of social data collected 1 1 1 1 1
Portfolio quality
None of the above

Total number of clients 1 1 1 1 1 1 1 1

2.5 How number 1 1 1 1 1 1
of clients is Number of new clients
Client retention 1 1 1 1 1 1 1
incentivized 1 1 1 1 1 1 1
None of the above

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
2.6 HR policies Social protection (medical insurance
1 1 1 1 1 1 1 1 1 1 1 1 1 1
related to SP and/or pension contribution)
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Safety policy
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Anti-harassment policy
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Non-discrimination policy
Grievance resolution policy
1
None of the above
1

Products and Services

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
3.1 Types of Income generating loans
1 1 1 1 1 1 1
credit products Non-income generating loans
1 1
Does not offer credit products

1 2 3 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Products
and Services AGAHE ASA-P Akhuwat CSC FFO JWS Kashf Foundation TFCL RCDP SSF SSSF FDO DSP GBTI VDO NRSP SRSP PRSP SRSO TMF

3.2 Types of income 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Microenterprise loans 1 1
generating loans 1 1 1 1 1 1
SME loans 1 1 1
1 1 1 1 1 1 1 1 1 1 1 1
Agriculture/livestock loans 1 1 1
1
Express loans
None of the above

3.3 Types of Education loans 1 1 1 1 1 1

non-income Emergency loans 1 1 1 1
generating loans Housing loans 1 1 1
Other household 1 1 1 1 1 1 1 1
needs/consumption 1 1 1 1 1 1 1 1 1 1
None of the above

3.4 Types of Compulsory savings accounts 1

savings products Voluntary savings accounts 1 1
Does not offer savings accounts 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

3.5 Types of Demand deposit accounts

voluntary savings Time deposit accounts 1
products None of the above 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

3.6 Compulory Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

insurance required No 1 1 1 1
Unknown

3.7 Types of Credit life insurance 1 1 1 1 1 1 1

compulory insurance Life/accident insurance 1 1 1 1 1
required Agriculture insurance
None of the above 1 1 1 1 1 1 1

3.8 Voluntary Yes 1 1 1

insurance offered No 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Unknown

3.9 Types of voluntary Credit life insurance 1 1 1

insurance offered Life/accident insurance 1 1 1 1 1
Agriculture insurance
Health insurance 1 1 1
House insurance
Workplace insurance
None of the above 1 1 1 1 1 1 1 1 1 1

1 2 4 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Products
and Services AGAHE ASA-P Akhuwat CSC FFO JWS Kashf Foundation TFCL RCDP SSF SSSF FDO DSP GBTI VDO NRSP SRSP PRSP SRSO TMF

3.10 Other financial Yes 1 1

services offered No 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Unknown 1

3.11 Types of other Debit/credit card

financial services Mobile/branchless banking services 1 1 1
offered Savings facilitation services 1
Remittance/money transfer services
Payment services
Microleasing
Scholarship/educational grants
None of the above 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

3.12 Enterprise Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

services offered No 1 1 1 1
Unknown

3.13 Types of Enterprise skills development 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

enterprise services Business development services 1 1 1 1 1 1 1 1
offered None of the above 1 1 1 1

3.14 Women's Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1

enpowerment No 1 1 1 1
tservices Unknown 1 1 1

3.15 Types of Leadership training for women 1 1 1 1 1 1 1 1 1 1 1 1 1 1

women's Women's rights education/gender 1 1 1 1
empowerment issues training 1 1 1
Counseling/legal services for female
services offered
victims of voilence
None of the above

3.16 Education Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

services offered No 1 1 1 1 1
Unknown

1 2 5 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Products
and Services AGAHE ASA-P Akhuwat CSC FFO JWS Kashf Foundation TFCL RCDP SSF SSSF FDO DSP GBTI VDO NRSP SRSP PRSP SRSO TMF

3.17 Types of Financial literacy education 1 1 1 1 1 1 1 1 1 1 1 1 1 1

education services Basic health/nutrition education 1 1 1 1 1 1 1 1 1 1 1
Child and youth education 1 1 1 1 1 1 1 1
offered
Occupational health and safety in 1
the workplace education 1 1 1 1
None of the above

3.18 Health Yes 1 1 1 1 1 1 1 1 1

services offered No 1 1 1 1 1 1 1 1
Unknown 1 1 1

3.19 Types of Basic medical services 1 1 1 1 1

health services Special medical services for 1 1 1
offered women and children 1 1 1 1 1 1 1 1 1 1 1
None of the above

Client Protection

4.1 Do policies Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

support good No 1 1 1 1
repayment capacity Partially
Unknown
analysis

4.2 Does internal Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

audit verify No 1 1
compliance with Partially
Unknown
policies

4.3 The institution Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

fully discloses to the No 1
clients all prices, Partially
installments, terms, Unknown
and conditions of all
financial products,
including all charges
and fees, associated
prices, penalties,
linked products, third
party fees, and
whether these can
change over time.

1 2 6 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Products
and Services AGAHE ASA-P Akhuwat CSC FFO JWS Kashf Foundation TFCL RCDP SSF SSSF FDO DSP GBTI VDO NRSP SRSP PRSP SRSO TMF

4.4 The institution Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

clearly presents to No
clients the total Partially
Unknown 1
amount that the
client pays for the
product,
regardless of local
regulations
(including in the
absence of
industry-wide

4.5 The institution Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

clearly spells out in a No
Code of Conduct Partially
Unknown 1
(i.e., in Code of
Conduct, Code of
Ethics, Book of
Employee Rules) the
specific standards
of professional
conduct that are
expected of all
employees involved
in collections
(including third
party staff).

4.6 The institution Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

sanctions cases of No
violations of the Partially 1
Unknown
Code of Conduct or
collections policies
(identified by
management,
internal audit or an
efficient complaint
mechanism)
according to set
rules.

1 2 7 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Products
and Services AGAHE ASA-P Akhuwat CSC FFO JWS Kashf Foundation TFCL RCDP SSF SSSF FDO DSP GBTI VDO NRSP SRSP PRSP SRSO TMF

4.7 The institution's Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

policies include how No
to handle complaints. Partially
Unknown
They include how to
inform clients about
the complaint
mechanism. The
institution's clients
receive a timely

4.8 The institution's Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

contracts include a No
data privacy clause, Partially
Unknown
describing how and
when data can be
shared (in addition to
credit bureau
information).

4.9 How Declining balance 1 1 1 1 1 1 1 1 1 1 1

interest rate interest method 1 1 1 1 1 1 1 1 1 1 1 1 1
of most Flat interest method
representative
credit product is
stated

Environment

5.1 Environmental Awareness raising on environmental 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

policies in place impacts 1 1 1 1 1 1 1 1 1 1 1 1 1
Clauses in loan contracts requiring 1 1 1 1 1 1 1
clients to imrove environmental 1 1 1 1 1 1 1 1 1 1 1 1
practices/mitigate environmental risks
Tools to evaluate environmental risks
of clients' activities
Specific loans linked to
environmentally friendly products
and/or practices
None of the above

1 2 8 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
Products
and Services AGAHE ASA-P Akhuwat CSC FFO JWS Kashf Foundation TFCL RCDP SSF SSSF FDO DSP GBTI VDO NRSP SRSP PRSP SRSO TMF

5.2 Types of Products related to renewable 1 1 1 1 1 1 1 1 1 1 1

environmentally energy (e.g. solar panels, biogas
friendly products digesters etc) 1 1 1 1 1 1 1
Products related to energy 1 1 1 1
and/or practices
efficiency (e.g. insulation, improved
offered
cooking stove etc)
Products related to environmentally
friendly practices (e.g. organic
farming, recycling, waste
management etc)
None of the above

1 2 9 | PA K I S TA N M I C R O F I N A N C E R E V I E W ( P M R ) 2 0 2 1
 Number of Number of Number of Number of Number of Number of Number of Number of
MFBs NBMFCs
Personnel managers loan officers board members Personnel managers loan officers board members

AMFB Total 2421 549 735 7 GBTI Total 27% 0% 35% 14%
Female 219 37 30 0 Female 163 6 137 8
Percentage 9% 7% 4% 0% Percentage 51 1 48 3

FINCA Total 2392 13 962 8 JWS Total 31% 17% 35% 38%
Female 390 3 42 3 Female 664 81 392 7
Percentage 16% 23% 4% 38% Percentage 97 8 83 2

HBLMFB Total 3489 11 1739 8 Kashf Total 15% 10% 21% 29%
Female 525 2 312 3 Female 3205 26 2101 9
Percentage 15% 18% 18% 38% Percentage 1417 9 1047 4

KBL Total 4586 115 2668 9 Micro Options Total 44% 35% 50% 44%
Female 503 10 288 1 Female 12 4 9 7
Percentage 11% 9% 11% 11% Percentage 6 2 4 4

MMFB Total 1605 377 733 6 NRSP Total 50% 50% 44% 57%
Female 143 29 14 1 Female 4670 20 3551 9
Percentage 9% 8% 2% 17% Percentage 778 0 574 2

NRSP - Bank Total 3161 245 1613 7 OPD Support Total 17% 0% 16% 22%
Female 69 3 13 2 Programme Female 48 5 20 5
Percentage 2% 1% 1% 29% Percentage 12 0 7 1

POMFB Total 834 87 480 8 OPRCT Total 25% 0% 35% 20%

Female 115 4 84 0 Female 156 35 89 7
Percentage 14% 5% 18% 0% Percentage 36 10 12 1

SMFB Total 218 20 177 6 PRSP Total 23% 29% 13% 14%
Female 4 1 0 1 Female 554 25 223 13
Percentage 2% 5% 0% 17% Percentage 100 1 95 4

TMFB Total 2592 577 902 8 RCDP Total 18% 4% 43% 31%
Female 302 66 51 1 Female 1089 103 627 7
Percentage 12% 11% 6% 13% Percentage 155 3 148 3

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 Number of Number of Number of Number of Number of Number of Number of Number of
NBMFCs NBMFCs
Personnel managers loan officers board members Personnel managers loan officers board members

Agahe Total 240 45 116 7 SRSO Total 417 13 244 11

Female 34 3 22 3 Female 57 2 52 2
Percentage 14% 7% 19% 43% Percentage 14% 15% 21% 18%

Akhuwat Total 3925 16 2350 6 SSF Total 515 15 258 7

Female 103 0 74 0 Female 130 2 112 2
Percentage 3% 0% 3% 0% Percentage 25% 13% 43% 29%

ASA Total 2056 505 1149 6 SVDP Total 111 6 44 7

Female 173 9 156 1 Female 3 3 0 3
Percentage 8% 2% 14% 17% Percentage 3% 50% 0% 43%

DSP Total 709 9 346 6 TMF Total 772 28 448 7

Female 236 2 118 3 Female 84 2 55 2
Percentage 33% 22% 34% 50% Percentage 11% 7% 12% 29%

FFO Total 229 8 136 7 VDO Total 12 3 4 10

Female 62 0 47 1 Female 1 1 1 1
Percentage 27% 0% 35% 14% Percentage 8% 33% 25% 10%

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