Pakistan Microfinance Review 2013

Transcription

PAKISTAN
MICROFINANCE
REVIEW
Annual Assessment of the
Microfinance Industry
2013
FINANCIAL SERVICES FOR ALL
Produced by: Pakistan Microfinance Network
Art Direction: Sumaira Sagheer
Design & Layout: Uzma Toor
Photocredits: Retroactive Studios Library
Printed at: Pangraphics
© 2014 Pakistan Microfinance Network
PAKISTAN
MICROFINANCE
REVIEW
Annual Assessment of the
Microfinance Industry
EDITORIAL BOARD
Mr. Ghalib Nishtar
Chairperson Editorial Board
President, Khushali Bank
Mr. Syed Samar Hasnain
Director,
Agriculture Credit and Microfinance Department,
State Bank of Pakistan
Mr. Blain Stephens
COO and Director of Analysis
Microfinance Information eXchange, Inc. (MIX)
Mr. Raza Khan
Statistics & Results Adviser,
Results & Evaluation Team- Economic Growth Group,
Department for International Development (UK)
Mr. Yasir Ashfaq
Group Head, Financial Services Group,
Pakistan Poverty Alleviation Fund
Mr. Abrar Mir
EVP and Group Head, Digital Money & Mobile Payments,
United Bank Limited (UBL)
Mr. Masood Safdar Gill
Director Program, Urban Poverty Alleviation Program,
National Rural Support Programme
PMN TEAM
Aban Haq
Advisor
Ali Basharat
Author and Managing Editor
Ammar Arshad
Author and Data Compilation
Zahra Khalid
Author
Aimen Shahid
Author
ACRONYMS AND ABBREVIATIONS
C & MFD Agriculture and Microfinance
A
Division
ADB Asian Development Bank
AMRDO Al-Mehran Rural Development
Organization
BPS Basis Points
CAR Capital Adequacy Ratio
CIB Credit Information Bureau
CGAP Consultative Group to Assist the Poor
CNIC Computerized National Identity Card
CPP Client Protection Principles
CPI Consumer Price Index
CPC Consumer Protection Code
DFID Department for International
Development, UK
DPF Depositor’s Protection Fund
ECA Eastern and Central Europe
EUR Euro
FIP Financial Inclusion Program
FMFB The First Microfinance Bank Ltd.
FSS Financial Self Sufficiency
FY Financial Year
GBP Great Britain Pound
GDP Gross Domestic Product
GLP Gross Loan Portfolio
GNI Gross National Income
GoP Government of Pakistan
IAFSF Improving Access to Financial Services
Support Fund
IFAD International Fund for Agricultural
Development
IFC International Finance Corporation
JIWS Jinnah Welfare Society
KBL Khushhali Bank Ltd.
KF Kashf Foundation
KIBOR Karachi Inter-Bank Offering Rate
KMFBL Kashf Microfinance Bank Ltd.
KP Khyber Pakhtunkhwa
MCGF Microfinance Credit Guarantee Facility
MCR Minimum Capital Requirement
MENA Middle East and North Africa
MFB Microfinance Bank
MFCG Microfinance Consultative Group
MF-CIB Microfinance Credit Information Bureau
MFP Microfinance Providers
MFI Microfinance Institution
MIS Management Information System
MO Micro-Options
NADRA National Database and Registration
Authority
NGO Non-Governmental Organization
NFLP National Financial Literacy Program
NMFB Network Microfinance Bank Limited
NPLs Non-Performing Loans
NRDP National Rural Development Program
NRSP National Rural Support Programme
OPD Organization for Participatory
Development
OSS Operational Self Sifficiency
PAR Portfolio at Risk
PBA Pakistan Banks Association
PKR Pakistan Rupee
PMN Pakistan Microfinance Network
PPAF Pakistan Poverty Alleviation Fund
PRISM Programme for Increasing Sustainable
Microfinance
PRSP Punjab Rural Support Program
PTA Pakistan Telecom Authority
ROA Return on Assets
ROE Return on Equity
RSP Rural Support Programme
SBI Shore Bank International
SBP State Bank of Pakistan
SC The Smart Campaign
SDS SAATH Development Society
SECP Securities and Exchange Commission of
Pakistan
SPTF Social Performance Task Force
SME Small and Medium Enterprise
SRSO Sindh Rural Support Organization
SRDO Shadab Rural Development Organization
SVDP Soon Valley Development Program
TMFB Tameer Microfinance Bank Ltd
UBL United Bank Limited
USD United Sate Dollar
USSPM Universal Standards for Social
Performance Management
VDO Village Development Organization
WPI Wholesale Price Index
HIGHLIGHTS
YEAR
Active Borrowers (in millions)
2009
2010
2011
2012
2013
1.4
1.6
1.7
2. 0
2.4
16.8
PKR 20.2
PKR 24.8
PKR 33.1
PKR 46.6
0.6
0.8
0.9
1.3
1.4
Branches
1,221
1,405
1,550
1,460
1,606
Total Staff
11,557
12,005
14,202
14,648
17,456
30.4
35.8
48.6
61.9
81.5
7.2
10.1
13.9
20.8
32.9
23.2
27.5
38.3
24.9
26.9
6.4
7.5
10.1
12.5
17.3
OSS (percentage)
104.6
99.7
108.4
109.5
118.1
FSS (percentage)
86.8
81.7
100.5
107.5
116.5
3.4
4.1
3.2
3.7
2.5
Gross Loan Portfolio
(PKR billions)
Active Women Borrowers
(in millions)
Total Assets
(PKR billions)
Deposits
(PKR billions)
Total Debt
(PKR billions)
Total Revenue
(PKR billions)
PAR > 30 (percentage)
CONTENTS
SECTION 1: THE YEAR IN REVIEW
1.1.
1.2.
1.3.
1.4.
Macro-economy and the Microfinance Industry. . . . . . . . . . . . . . . . . . . . . . . . . 10
Policy and Regulatory Environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Microfinance Industry Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2: INDUSTRY PERFORMANCE
2.1.
2.2.
2.3.
2.4.
2.5.
2.6.
2.7.
2.8.
Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Scale and Outreach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Financial Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Funding Profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Profitability and Sustainability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Efficiency and Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Risk Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 3: THE WAY FORWARD
3.1. Challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.2. Opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ANNEXURES
Annexure A-1:
Annexure A-2:
Annexure B:
Annexure C:
Annexure D:
Annexure E:
Performance Indicators-Industry Aggregate (2007-2011). . . . 56
Performance Indicators-Individual Institutions
and Peer Groups (2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Regional Benchmarks 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Sources of Data 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Adjustments to Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Terms and Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 1
The Year in Review
SECTION 1
THE YEAR IN REVIEW
In the year 2013, microfinance industry in Pakistan witnessed another year of continued
growth and expansion. The industry posted consistent increase in not only credit outreach and
gross loan portfolio but also in micro-savings.
Growth in Pakistan’s economy remained modest due to persistent energy shortages and
security challenges. Some macroeconomic indicators turned relatively favorable such as
inflation, which eased up to remain in single digits. Importantly, the year saw a smooth political
transition in the country with one elected government transferring power to another. This not
only kept the economy in general and the microfinance industry in particular safe from adverse
effects that could have resulted from a problematic political transition, but also buoyed investor
confidence in the country.
On the regulatory side micro-insurance regulations were launched by the Securities and
Exchange Commission of Pakistan (SECP) in an effort to provide a framework for micro-insurance
operations in Pakistan but also promote further development of this sector.
Investors continued to show interest in the microfinance industry in Pakistan, leading to
another acquisition of a microfinance bank (MFB) by an international entity and importantly
placement of funds in an MFP by an international lender. MF-CIB -a key development for
microfinance in the country - was rolled out nationally and opened for enquiries. A number of
new responsible finance initiatives were launched including Transparent Pricing Initiative in
collaboration with Microfinance Transparency.
A very important highlight of the year was the emergence of leading MFPs which can now be
clearly distinguished among their peers. These MFPs can be distinguished by their market share,
financial strength, profitability, experience curve and mature business models.
MACRO-ECONOMY AND MICROFINANCE INDUSTRY
Pakistan’s economy grew by 3.6 percent in 2013 as compared to 4.4 percent in the previous
financial year. The economic outcome was below the target of 4.0 percent for the year. Although
industrial sector showed recovery but it could not compensate for slower growth in the services
and agriculture sector1. Despite the modest growth in the economy the microfinance industry
in Pakistan grew by 20 percent in terms of outreach while GLP grew by 36 percent to close at
PKR 52 billion2. This relationship is consistent with findings of a study conducted in 2008 which
showed that GDP growth rate does not have any relation with the performance of microfinance
providers. MFPs can perform well in terms of profitability, operational self-sufficiency and
portfolio quality even in economic downturns and periods of slow economic growth.3
The investment rate, which has been already low in Pakistan, declined further in 2013. The
investment to GDP ratio declined to 14.2 percent from 14.4 percent in the previous year as
shown in the Exhibit 1.14. Persistent macro imbalances, structural bottleneck in the energy
sector, and an uncertain security environment continue to impede investment. On the contrary
microfinance industry continued to attract foreign investment both in terms of equity and debt.
The year saw the acquisition of Kashf Microfinance Bank (KMFB) by FINCA International (see Box
1.1) and lending to NRSP Bank by ECO Trade and Development Bank.
1: Pakistan Economic Survey 2012-13, Ministry of Finance, Government of Pakistan
2: MicroWATCH, A Quarterly Update on Microfinance Outreach in Pakistan, Issue 30, Qtr 4, 2013. PMN.
3: Microfinance Performance and Domestic GDP Growth:Testing the Resiliency of Microfinance Institutions to
Economic Change, Stanford University USA, J. Woolley, May 2008
4: 10
Economic Survey of Pakistan, 2012-13, Ministry of Finance, Government of Pakistan
Copyrights © 2014 · Pakistan Microfinance Network
A very important
highlight of the
year was the
emergence of
leading MFPs
which can now
be clearly distinguished among
their peers.
Pakistan Microfinance Review - 2013
Annual Assessment of the Microfinance Industry
BOX 1.1: ACQUISITION OF KMFB
FINCA International, a global microfinance network, acquired majority
shareholding in Kashf Microfinance Bank Limited (KMFB) through an equity
investment of PKR 824.7 million. FINCA Microfinance Cooperative (UA), the
Netherlands-based investment arm of FINCA, acquired a majority holding with
82.8 percent of the shares in May 2013.
FINCA, a global microfinance organization with operations in 22 countries across
five continents was founded almost 30 years ago. It is considered a pioneer of
the modern microfinance industry and has been recognized throughout its history
for innovation, efficiency, ethical practices, and focus on social performance.
After six months of acquisition, KMFBL was formally renamed and rebranded as
FINCA Microfinance Bank.
Exhibit 1.1: Investment to GDP Ratio and Acquisition of MFBs
20%
18%
2013 saw a higher than anticipated drop
in inflation with the annual inflation dropping
to single digits for the first time in five years.
This led to the lowering of the policy rate by
the State Bank of Pakistan by 300 bps to 9.0
percent. Resultantly, the 6-months KIBOR also
fell to single digits as show in the Exhibit 1.2
below. The drop in inflation was largely due to
subdued global commodity prices5.
Despite the fall in interest rates loans to
private sector businesses expanded by only
0.7 percent in 2013 – almost unchanged
from the 0.8 percent growth seen in 2012.
This can be attributed to the continued heavy
government borrowing in order to finance
the budget deficit which stood at 8.0 percent
of the GDP against a target of 4.76 percent.
While this drop in interest rate will result in
the lowering of borrowing costs for the sector,
MFPs are likely to find it difficult to raise loans
from commercial sources because of excessive
government borrowing.
14%
12%
10%
6%
4%
POLICY AND REGULATORY
REQUIREMENTS
Acquisition of KMFB
Acquisition of RMFB
Acquisition of KBL & NMFB
Investment to GDP Ratio (%)
16%
2%
0%
2009
2010
2011
2012
2013
Exhibt 1.2: Discount Rate, 6-Months KIBOR And CPI
25
Pakistan’s microfinance regulatory
environment continues to be recognized as
one of the best internationally7. This has led
to the continued investor interest and growth
of the industry. Efforts to further strengthen
the regulatory and policy framework are
underway. State Bank of Pakistan has revised
Prudential Regulations for Microfinance Banks;
SECP has developed regulations on microinsurance as well as exploring the possible
framework for regulating non-bank MFIs. The
government launched number of lending
schemes with an aim to generate employment
and alleviate poverty. In addition, a number of
new initiatives were announced in the budget
for fiscal year 2014-15.
Percentage
20
15
5: Annual Report 2012-13 (State of the Economy),
10
6: Annual Report 2012-13 (State of the Economy),
5
7: Global Microscope on the Microfinance Business
0
Environment 2013, The Economist
FY 09
Discount Rate
FY 10
Fy11
Fy12
Consumer Price Inflation (Average)
Fy13
6 Months KIBOR
11
Micro-Insurance Regulations
One of the key highlights of the year on the
policy and regulatory side was the approval of
the micro-insurance regulations by Securities
and Exchange Commission of Pakistan (SECP).
In February 2014, the Policy Board of
the Securities and Exchange Commission of
Pakistan (SECP) approved the Micro-insurance
Rules, 2014. These rules were put out for
public opinion in June 2013. The drafting of
the regulations was preceded by release of a
diagnostic study which not only highlighted
the micro-insurance potential in the country
but also the need for a sound regulatory
framework.
The micro-insurance regulations cover the
following broad areas:»» Contract and disclosure requirements
»» Product features and submission
requirements
»» Intermediation specifications
»» Requirements for authorized risk takers
»» Claims handling procedures
»» Complaints and grievance handling
mechanisms
»» Code of conduct and consumer protection
»» Prudential regulation
»» Regulatory reporting and information
sharing requirements.
The regulations are quiet specific on the
definition of the micro-insurance based on
income levels of the clients and maximum
level for the sum insured. In addition,
regulations ensure consumer protection by
requiring clearly stated policies, specific
compliance of codes of consumer protection
and conduct of agents.8
Revision of Prudential Regulations for
Microfinance Banks (MFBS)
SBP in June 2014 issued revised prudential
regulations (PR) for MFBs. The aim of these
revisions is to improve their corporate
governance, consumer protection practices,
and anti-money laundering (AML) policies
of MFBs. It is hoped that that the revised
regulations will help MFBs to better position
themselves for managing higher level of
8: Full text of the Micro-insurance Rules, 2014
can be accessed at http://secp.gov.pk/notification/pdf/2014/SRO_116_Microinsurance_
Rules_20140219.pdf
12
growth in future. Currently, there are ten
MFBs operating in the country. Nearly all
are well capitalized and owned by diverse
owners including mobile network operators
(MNOs), commercial banks and international
microfinance institutions. PRs for MFBs
were first issued in the year 2002, and have
subsequently been revised and strengthened
from time to time keeping in view evolution
and changing dynamics of the sector.
The annual income ceiling for eligible
borrowers has been revised to incorporate
the impact of inflation and expand market
space for MFBs from PKR 300,000 to PKR
500,000. The prudential regulations have been
categorized into risk (R), Risk (R), Corporate
Governance (G), Customer Due Diligence and
Anti Money Laundering (M), and Operations
(O). The revisions are briefly explained below:-
Corporate Governance
Governance standards have been enhanced
for the MFBs. The revised regulations define
role and responsibilities of board of directors,
require induction of two independent
directors, and prescribe fit and proper test for
the appointment of key executives of MFBs.
Customer Due Diligence and Anti Money
Laundering (AML)
Customer due diligence and AML
has been strengthened in light of FATF
recommendations 2012, to avoid usage of MFB
channels for illegal activities. MFBs will have
to implement comprehensive AML framework
covering areas such as customer identification
and verification requirements, ongoing &
enhanced due diligence, record retention, and
cash & suspicious transactions reporting in
line with the standards prescribed by Financial
Action Task Force (FATF).
Consumer Protection
Regulations pertaining to consumer
protection have been revised from basic
instructions on transparency and client
education to a comprehensive set of
instructions. MFBs are also required to improve
their consumer protection policies through
basic financial literacy programs, enhanced
transparency & disclosures, fair debt collection
One of the key
highlights of the
year on the policy
and regulatory
side was the
approval of the
micro-insurance
regulations by
Securities and
Exchange Commission of Pakistan (SECP).
practices, and effective complaint redressal
mechanism9.
Government Sponsored Loan Schemes
The current government soon after coming
into power announced a number of initiatives
to generate employment and alleviate
poverty in the country. Two schemes have
been launched as part of these initiatives:
Prime Minister (PM) Youth Loan Scheme and
Prime Minister (PM) Interest Free Loans. These
schemes particularly the latter can have
important implications for the microfinance
industry.
PM Youth Loan Scheme
Corporate governance is seen
as a key determinant in any
organization’s
success...
Prime Minister’s Youth Loan Scheme aims to
support sef employment within the country’s
youth. Under the scheme, loans of up to PKR
2.0 million may be given with tenure of up to
8 years (with first year as the grace period).
The debt equity proportion will be maintained
at 90:10 and loans will be disbursed to SMEs
across the country. 50 percent of the loans
are reserved for women whereas a 5 percent
quota has been earmarked for disabled,
widows and families of shaheeds. Up to one
hundred thousand loans under the scheme
shall be disbursed. The loans shall be priced
at a below market rate. Small and Medium
Enterprise Development Authority has been
tasked with an advisory role in implementation
of the loan scheme. SMEDA has provided
55 pre feasibilities for referencing by loan
applicants and lenders.
Despite the initial positive vibes, the
scheme has only been able to attract two
public sector banks namely, National Bank of
Pakistan (NBP) and First Women Bank Limited
(FWBL) with other commercial banks shying
away from the scheme.
PM Interest Free Loan Scheme (PMIFL)
In order to address the issue of rising
poverty and unemployment in the country,
under this scheme interest free microloans
are being extended to poor and destitute
who score of 0-40 on the poverty score card.
PKR 3.5 billion have been earmarked for
the scheme and shall be routed through the
national apex, PPAF. Up to PKR 50,000 loans
9: To access the revised prudential regulations text,
please see the following link http://www.sbp.
org.pk/publications/prudential/index.htm
can be extended under the scheme and 50
percent of the loans are earmarked for women
borrowers. Given the overlap of conventional
microfinance clients with the target market
for these loans, PPAF and the sector has taken
proactive measures to mitigate distortions in
the market. In order to safeguard the MFPs,
interest free loans will only be extended
to those clients that have not been tapped
by MFPs yet. Therefore, these loans will be
extended to borrowers in selected areas of
62 districts of the country which score low
Human Development Index (HDI) and have low
or no conventional microfinance. Managing
the scheme to avoid such distortions is critical
at this stage when the industry has become
sustainable and is shifting from subsidized
financing to commercial financing to meet it
requirements for on-lending.
MICROFINANCE INDUSTRY
INITIATIVES
Governance needs of the Microfinance
Industry: A Customized Training
Program
One of the key challenges faced by the
industry in Pakistan is corporate governance.
Corporate governance is seen as a key
determinant in any organization’s success,
whether it relates to transformation,
reaching scale, attaining sustainability
or delivering against its social goals and
objectives. However, the issue has multiplied
in importance as the sector has shifted
towards accessing commercial funding. Gaps
in risk management, financial transparency,
succession planning and the family’s role in
business need to be addressed to improve
standards of corporate governance. Boards
need to be made more effective, equipped
with required and diverse skills, and be able to
operate independently.
Keeping the above in view the State
Bank of Pakistan (SBP) awarded the Pakistan
Microfinance Network (PMN) the project
titled “Governance needs of the microfinance
industry: A Customized Training Program”
under the Institutional Strengthening Fund
(ISF) of the Financial Inclusion Program (FIP).
Implemented by Hikmah Consulting and
supported by the Pakistan Poverty Alleviation
13
Exhibit 1.3: Entry of Branchless Banking Model 2009-13
Fund (PPAF), the program
addresses the governance
needs of the microfinance
sector and also helps MFPs
build their capacity for growth
and to overcome the challenges
ahead. Part of the objectives
is to enhance the governance
awareness and skill levels of
Directors and senior management
of Microfinance Institutions (MFIs)
and Microfinance Banks (MFBs)
while simultaneously increasing
the ability of MFIs and MFBs to
attract Directors with the relevant
skills. Two trainings have been
rolled out to date, with further
offerings anticipated during 2014.
Exhibit 1.4: Growth in Number and Value of Transactions
14
250,000
54,100
200,000
40,000
41,130
35,319
100,000 151,108
170,796
224,024
173,231
234,646
30,000
20,000
50,000
10,000
-
Q4 2012
Q1 2013
Q2 2013
Value (PKR Million)
Rozgar Microfinance Bank
Limited), commercially launched
its branchless banking services
under the brand name of U-Paisa.
This is the first example of a
Mobile Network Operator (MNO)
entering the market by acquiring
100% stake in an existing
microfinance bank. Currently,
U-Paisa offers three main
services which include utility bill
payments, remittances and mobile
account.
MCB Lite, a product of MCB
Bank, is another example of a
commercial bank setting foot in
the branchless banking sector.
However, MCB Lite is slightly
different from conventional
branchless banking service
providers; it is basically a mobile
account that supports VISA Card
50,000
51,911
44,760
150,000
60,000
Number of Transactions ('000)
With a firmly established
regulatory environment
and supporting institutional
framework, the branchless
banking sector of Pakistan
continued to excel on all fronts
in the calendar year 2013. Four
new players emerged, and there
was staggering growth in the
number of branchless banking
transactions.
The new players include
HBL Express, U-Paisa, Mobile
Paisa and MCB Lite, bringing
the total number of branchless
banking deployments to eight
in the country. “HBL Express” is
a branchless banking solution
provided by the largest private
sector bank in Pakistan - Habib
Bank Limited (HBL). The model
followed by HBL Express is similar
to the one followed by UBL’s
OMNI i.e. one-to-many branchless
banking model. This essentially
means that HBL express can offer
branchless banking services to
customers of any mobile operator.
Exhibit 1.3 highlights the timeline
and modus operandi of all the
branchless banking service
providers in Pakistan.
Ufone, in collaboration with
U Microfinance Bank (formerly
Value of Transactions (in PKR Million)
Branchless Banking
Q3 2013
Q4 2013
Number (in 000's)
...the branchless banking
sector of Pakistan continued
to excel on all
fronts in the
calendar year
2013
and can be managed via both
Internet and ATM machines.
Hence, a user can conduct
transactions through a Visa
Card and a Mobile Wallet. An
MCB Lite user can pay utility
and mobile phone bills, transfer
funds and shop online (local and
international).
Warid Telecom in partnership
with Bank Alfalah Limited
launched its Mobile Financial
Service (MFS) by the name of
‘Mobile Paisa’ in December 2013.
Currently, Mobile Paisa is only
offering services such as money
transfer and utility bill payment
services to Warid customers
across Pakistan. It follows the
one-to-one model of branchless
banking with Bank Alfalah as
the partner financial institution
and branchless banking license
holder, and Warid as the telecom
providing agent network.
The emergence of six
branchless banking players within
a period of two years has led to a
sizable expansion on the supply
side of the market. The influx of
new players is encouraging the
market to offer innovation in
products and improved value in
customers’ accounts. During the
year under review, 192 million
BB transactions worth PKR 802
billion were carried out across the
country – reflecting 59 percent
more volume and 63 percent
higher value in comparison to
201210. Exhibit 1.4 highlights the
growth in branchless banking in
the year 2013.
Over the counter (OTC)
transactions continue to
dominate the BB landscape. OTC
transactions are facilitated by an
agent, rather than by the customer
using their own mobile phone as
in the case of mobile-wallets (see
Box 1.1). Transactions through
m-wallets are only a fraction of
the total transactions carried
out through OTC; 80 percent of
the BB transactions performed
in the fourth quarter of 2013
were over the counter, whereas
only 14 percent were carried out
through m-wallets. Albeit slow,
share of m-wallet transactions
did rise from 12 percent to 14
percent during the year mainly
due to increased customer usage
for utility bill payments, loan
repayments, and mobile top ups.
Microfinance Credit
Information Bureau (MF-CIB)
In the midst of 2012, PMN,
with the support of State Bank
of Pakistan (SBP), Pakistan
Poverty Alleviation Fund (PPAF),
Department for international
Development (DFID) and
International Finance Corporation
(IFC), successfully launched
Exhibit 1.5: Role of a Credit Bureau in the Decision making
Process of a MFP
... successfully
launched the
nation-wide
rollout of the
Microfinance
Credit Information Bureau
(MF-CIB).
New Micro-credit
Client
Request a new
(or renewal) loan
MFP Loan Officer
Makes decision to
deny or accept credit
based on credit bureau
information, loan
application and
MFP policy
MFP Loan Officer
Consults credit
bureau database
(Enquiry)
Credit Bureau
- Provides actual
information
- updates database
-seeks new financial
and other relevant
information
NADRA verification and data
consolidation
has significantly increased the
integrity of the
repository...
the nation-wide rollout of the
Microfinance Credit Information
Bureau (MF-CIB). The project
was launched with an aim of
institutionalizing MF-CIB in the
microfinance eco system to
facilitate the sector in managing
credit risk and assessing the true
credit worthiness of existing and
prospective micro-credit clients.
The year 2013 saw some major
developments and milestones
achieved in the nation-wide
implementation of MF-CIB. As of
Dec 2013, 50 MFPs (including
banks, microfinance institutions,
rural support programs and
smaller microfinance institutuions)
have been registered. Collectively,
these organizations have
submitted 4.1 million records out
of which 3.1 million unique CNICs
have been verified by NADRA. The
NADRA verified database is now
up and live for enquiry purposes.
NADRA verification and data
consolidation has significantly
increased the integrity of the
repository as previously, nonNADRA verified repository was
being used for enquiry purposes.
For the partner organizations of
PPAF (23 in total), collaborations
with their respective vendors
have been made and the business
rules of the Bureau reporting
format have been implemented
at the vendor end. It is expected
that these organizations shall start
reporting their data in the first
quarter of 2014.
Vis-à-vis enquiry generation,
some institutions like PRSP,
DAMEN, CSC, JWS, OLP, RCDS,
SDF and TMFB have completely
operationalized the enquiries
whereas others like FINCA MFB,
, WF, FMFB, KB, KF, ASA Pakistan,
Apna MFB and Asasah have
partially operationalized their
enquiries. Akhuwat, , BLCC, BRAC
Pakistan, GBTI, NRSP, SRSO, SRSP,
TRDP and smaller MFIs (23)
have yet to implement enquiry
procedures. Since enquiry
generation requires change in
SOPs of organizations, this activity
is expected to gain full steam by
the middle of next year. Already
there is a consistent increase in
15
the number of enquiries being
made per month, with the sector
crossing the 100,000 enquiries
milestone in the month of May
2014 (see Exhibit 1.6).
A major achievement in 2013
was the finalization of the Bureau
Code of Conduct, delineating
rights and obligations of MFPs
and Bureau. The finalized draft
would be presented to PMN Board
of Directors in January for final
approval.
Exhibit 1.6: Enquiries per month
110,000
Number of Enquiries
90,000
70,000
50,000
30,000
10,000
(10,000)
Responsible Finance
Initiatives
Pricing Transparency
Initiative in collaboration with
MFTransparency
PMN, in partnership with
MicroFinance Transparency
(MFTransparency) and with
support from the Financial
Inclusion Program (FIP), SBP,
UK-Aid and PPAF completed the
first data publication under the
Transparent Pricing Initiative.
Pricing information was collected
and standardized calculation
methods employed to calculate
Annualized Percentage Rate (APR)
interest rates for all products of
the 31 participating MFPs. This
was the first sector-led move
towards greater transparency
and standardization in pricing
calculations and disclosures in the
local industry. The results of the
initiative are discussed in detail in
Box 1.2.
Social Performance
Implementation Fund
Fourteen MFPs participated
in an 18 month long (2013-14)
social performance management
implementation drive to better
comply with the Universal
Standards for Social Performance
Management (the Standards),
choosing areas such as ‘ensure
Board, management and employee
commitment to social goals’,
‘treating clients responsibly’ and
16
May-13
Jun-13
Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13
‘designing appropriate products
and delivery channels that suit
client needs.’ Participating MFPs
were able to make moderate
to significant changes in their
policies and operation to better
comply with the Standards.
Client protection assessments
in collaboration with the Smart
Campaign
Externally client protection
assessments based on the Smart
Campaign’s assessment format
(Smart Assessments) were carried
out for 10 MFPs during the year
in review, covering about 60
percent of the market. This was
made possible with support
of SBP-FIP. These assessments
provided MFPs with a gap analysis
of their practices in comparison
with globally accepted minimum
standards of client protection
and suggested recommendations
for institutional improvements
to better comply with these
minimum standards. In addition,
training was conducted for local
technical assistance providers to
build local capacity to conduct
such assessments in-country
going forward, with three Smart
Assessor accreditations received
for Pakistani assessors.
Jan-14 Feb-14 Mar-14
Apr-14 May-14
Box 1.2: OTC and M-Wallet
Transactions
Over-the-counter (OTC)
Transaction
was the finalization of the
Bureau Code of
Conduct, delineating rights
and obligations
of MFPs and
Bureau.
A mobile money transaction
where the customer does not
have an electronic account,
but simply hands over cash to
an agent who facilitates the
transaction on the customer’s
behalf using their own mobile
money account.
Mobile Wallets Transaction
A payment service performed
by a consumer via an electronic
account held on their mobile
phone. The account can be used
to store and transfer money,
as well as, pay for services and
goods by means of a simple
SMS.
Box 1.3: Transparent Pricing Initiative for Pakistan, 201314*
The Transparent Pricing initiative provided MFPs in the
Pakistani market the platform to demonstrate their
commitment to responsible and transparent pricing
through the exchange of information and adoption
of standard pricing practices. Prices for 31 MFPs from
Pakistan are available by product at the MFTransparency
website www.mftransparency.org
The following Exhibit B give similar information for some other microfinance
markets, namely India, Cambodia, Philippines, Uganda, Tanzania and Kenya for
comparison.
The following Exhibit A shows the Pakistan pricing curve,
with APR on the y-axis and loan sizes as a percentage
of per capita Gross National Income (GNI). Each bubble
shows one credit product, and the size of the bubble
denotes the number of clients for the product.
Exhibit A: Comparison of APRs and Loan Sizes
In reviewing the pricing data, analysis on the Pakistan pricing data and
comparison with other countries shows some significant findings:
»» Loan products target very small loan amounts relative to the
economic indicators of Pakistan. In other words, microcredit
in Pakistan is much smaller in size than microcredit in other
comparative countries. This means loans are targeted toward a
needier population, and brings with that the financial challenges
of providing extremely small loans.
»» Pricing levels in Pakistan look to be ‘moderate’ to ‘low’ relative
to other countries, and for the scale of loan amount, are much
lower than most other countries.
»» Loan product pricing is more transparent in Pakistan than
in most countries, however there is room for improvement.
Countries with higher transparency in comparison have in place
legislation requiring more transparency in their pricing.
* MFTransparency Country Pricing Report for Pakistan, 2013-14.
17
CONCLUSION
The year saw continued growth and expansion in the microfinance
industry in Pakistan. Overall, the industry seems well poised for
continued expansion in the future.
On the whole easing of inflation and subsequent reduction in policy
rate by the SBP bodes well for the industry but external challenges
remain, like energy shortages and adverse security situation in the
country. Slower growth in private sector credit can be a challenge
for MFPs as the look towards commercial sources for their funding
needs. Approval of micro-insurance regulations would lead to product
diversification, entry of new players and innovation in delivery models.
Prudential regulations were revised for MFBs by the SBP with focus on
corporate governance, anti money laundry and consumer protection.
In addition, government launched two schemes to provide subsidized
and interest free loans with an aim to alleviate poverty and generate
employment. Also, the budget for fiscal year 2014-15 saw the
announcement of number of initiatives including guarantee schemes
for loans to small farmers and low cost housing and insurance for crop
and livestock loans. Industry continues to generate investor interest
especially for international lenders. It was evident from the acquisition
of KMFB by FINCA International and loan extended to NRSP by
international financial institution. It is likely that we would see further
lending to MFPs by these global microfinance lenders.
With over eight systems now deployed in branchless banking, it
will lead to increase competition and product innovation with focus
on M-wallets and G2P payments. MF-CIB was fully implemented last
year and can play key role in improving credit decisions by MFPs and
enhancing the quality of the microfinance portfolio.
Among the responsible finance initiatives the most important was
the Transparent Pricing Initiative in collaboration with MF Transparency.
The endorsement of Transparent Pricing Initiative by the microfinance
industry in Pakistan and subsequent findings from the data showed
that loan pricing by MFPs was well in line with global benchmarks and
standards. The initiative will likely have far-reaching effect by reducing
the risk of political interference leading to arbitrary price caps and
protect consumer rights
18
19
SECTION 2
Industry
Performance
SECTION 2
INDUSTRY PERFORMANCE
Analysis of the financial performance of Pakistan’s microfinance industry
This section provides a detailed analysis of the financial performance of Pakistan’s microfinance
industry in 2013. Performance has been assessed on three levels: industry wise, across peer
groups and institution wise.
The analysis is backed by 88
financial indicators, calculated
from the audited financial
statements of the reporting
organizations. These indicators
have been compared across time
and regions to develop a reliable
and fair assessment of sector.
Box 2.1: Peer Groups
Microfinance Institution: A non-bank non-government organization (NGO) providing
microfinance services. Organizations in this group are registered under a variety of
regulations, including the Societies Act, Trust Act, and the Companies Ordinance. The MFI
peer group includes local as well as multinational NGOs such as BRAC-Pakistan and ASAPakistan.
Microfinance Bank: A commercial bank licensed and prudentially regulated by the SBP to
exclusively service the microfinance market. The first MFB was established in 2000 under
a presidential decree. Since then, seven MFBs have been licensed under the Microfinance
Institutions Ordinance, 2001. MFBs are legally empowered to accept and intermediate
deposits from the public. Currently there are 10 MFBs operating in the country.
Detailed financial information
is provided in the Annex A-I and
A-II of the PMR. Aggregate data
has been reproduced for five
years, whereas, the peer group
and institution specific data has
been made available only for the
year 2013.
A total of 37 MFPs submitted
their audited financial statements
for PMR 2013. 15 new
respondents are included in this
year’s dataset. For a complete list
of reporting organizations refer to
Annex B.
Industry players are
categorized into three groups for
benchmarking and comparison
purposes: Microfinance Banks
(MFBs), Microfinance Institutions
(MFIs) and Rural Support
Programmes (RSPs). See Box 2.1
for detailed definitions.
The distribution of
respondents (number of reporting
organizations) by peer group is
given in Exhibit 2.1. The MFI peer
group is comprised of the largest
number of respondents followed
by MFBs and then RSPs.
22
Rural Support Programme: An NGO registered as a non-profit company under the Companies
Ordinance. An RSP is differentiated from the MFI peer group based on the purely rural focus
of its credit operations. As a group, the RSPs are registered with and supervised by the
Securities and Exchange Commission of Pakistan (SECP).
Exhibit 2.1 Distribution of respondents by peer groups
Bureau Code of
and obligations
of MFPs and
Bureau.
5
8
24
MFIs
MFBs
RSPs
SCALE AND OUTREACH: BREADTH
This section focuses on outreach indicators to provide performance analysis of the industry in
terms of the growth and composition of the different financial services (credit, deposits and
insurance) , depth of outreach and gender.
the current years dataset.
Among the MFPs, growth in
borrowers was led by National
Rural Support Programme (NRSP)
whose borrowers increased by
46,000 from 345,000 in 2012
to 391,000 in 2013; NRSP-Bank,
KBL and TMFB also continued
to witness excellent growth
by adding 45,000, 44,000
and 43,000 new borrowers
respectively. On the other hand,
BRAC – Pakistan saw its number
of borrowers declining (by
17percent) from 68,000 in 2012
to 56,000 in 2013.
The industry in terms of
outreach was dominated by
nine MFPs that accounted for
81 percent of the outreach as
shown in Exhibit 2.3. Khushhali
Bank Limited (KBL) maintains its
position as the largest provider
of microcredit in terms of active
Exhibit 2.2: Growth in Number of Active Borrowers and GLP
3.00
50
45
2.50
40
35
2.00
30
1.50
25
20
1.00
15
0.50
10
GLP in PKR Billions
Microcredit outreach witnessed
substantial growth in the year
2013 where the number of active
borrowers grew by 21percent to
touch 2.4 million and the sector
gross loan portfolio (GLP) grew by
a staggering 41percent to close at
PKR 46.6 billion (Exhibit 2.2). It is
pertinent to mention here that the
inclusion of fourteen additional
MFP’s in the current years report
also has a noticeable impact
on the outreach figures – the
fourteen MFPs collectively added
0.95 million active borrowers and
a GLP worth of PKR 3.0 billion in
Active borrowers in millions
Scale and Outreach: Breadth
5
0.00
2009
2010
2011
Active Borrowsers
2012
0
2013
GLP
Exhibit 2.3: Active Borrowers of Nine Largest MFPs
TRDP
55
71
PRSP
63
73
2012
2013
123
130
FMFB
127
NRSP Bank
172
147
ASA-P
180
155
TMFB
198
286
KF
312
345
NRSP
391
366
KBL
409
50
100
150
200
250
300
350
400
450
Active Borrowers in Thousands
23
borrowers with a client base of
409,000 borrowers followed by
NRSP with 390,000 borrowers and
KF with 312,000 borrowers. The
reduction in the active borrowers
by BRAC-Pakistan resulted in its
exit from the nine largest MFPs,
replaced by TRDP which has a
client base of 71,000.
Exhibit 2.4: Share in Active Borrowers by Peer Group
100%
37%
28%
27%
25%
28%
34%
35%
39%
40%
2012
2013
80%
70%
When analyzed by peer group,
the market continues to be
dominated by MFBs followed by
MFIs and RSPs. The market share
of MFBs and MFIs increased by a
meager 1 percent, whereas, in the
same period the share of RSPs
decreased from 27 percent to 25
percent (see Exhibit 2.4). This shift
can be attributed to the inclusion
of three additional MFBs and
eleven additional MFIs reporting
in the current year.
60%
19%
25%
50%
40%
44%
44%
40%
30%
20%
10%
0%
2009
2010
2011
RSP
MFI
MFB
Exhibit 2.5 A: GLP by Peer Group
50
45
8.4
40
10.2
35
PKR in Billions
In terms of GLP, MFBs account
for 60 percent of the total GLP,
followed by MFIs with a share of
22 percent and RSPs with a share
of 18 percent (Exhibit 2.5 A and
Exhibit 2.5 B). The overall GLP
of the sector has increased by
PKR 8.3 billion to touch PKR 46.6
billion in 2013. MFBs witnessed
the largest increase in GLP (by PKR
9.3 billion) primarily on the back
of KBL, NRSP-B and TMFB as their
loan portfolios increased by PKR
3.0 billion, PKR 1.7 billion and PKR
1.6 billion respectively. Moreover,
the average loan sizes of MFBs
remain the highest among peer
group (PKR 33,472), indicating
a greater GLP. Resultantly, the
share of loan portfolio of MFBs
increased from 57 percent to 60
percent in the year under review.
35%
90%
6.7
30
25
7.6
5.3
28.1
20
15
10
5
6.6
5.0
3.9
14.6
18.7
5.7
2.5
8.6
9.8
2009
2010
RSP
24
2011
MFI
2012
MFB
2013
Exhibit 2.5 B: Percentage change in GLP by Peer Group
100%
34%
33%
21%
20%
20%
23%
18%
90%
80%
22%
70%
19%
15%
60%
60%
59%
57%
50%
51%
48%
40%
30%
20%
Bureau Code of
and obligations
of MFPs and
Bureau.
10%
0%
2009
2010
2011
MFI
RSP
2012
2013
MFB
Exhibit 2.6: Average Loan Size by Peer Group
40
35
33.5
30
29.1
25
23.3
20.8
17.5
In Thousands
20
15
16.4
15.1
14.6
20.2
17.6
17.2
22.7
20.6
18.6
21.1
10
5
0
2009
2011
2010
RSP
MFI
MFB
2012
Industry Average
2013
The average loan size of the
sector has increased from PKR
24,000 in 2012 to PKR 27,000 in
2013. The greatest increase in the
loan size came from the MFB peer
group whose loan size increased
by 14 percent, going up from PKR
29,000 to PKR 33,000 (Exhibit
2.6). Among the MFBs, TMFB
has an average loan size of PKR
48,000 (highest among the peer
group), while at the same time,
KBL continues to see an increasing
trend in its average loan size,
growing approximately 19 percent
from PKR 21,000 in 2012 to PKR
25,000 in 2013. This is a trend
that is likely to continue as the
sector rationalizes its loan size in
light of rising price levels in the
country and MFBs begin entering
the microenterprise market with
bigger, individual loans.
25
26
0.9
1.1
SRSO
2012
2013
1.5
ASA-P
1.9
FINCA
2.0
3.1
FMFB
3.5
2.9
KF
3.5
3.1
NRSP Bank
4.8
4.4
NRSP
5.6
6.7
TMFB
8.3
5.8
KBL
8.9
-
5
10
Billions
Exhibit 2.8: Growth in deposits and number of depositors
2,500
35
30
2,000
25
1,500
20
1,000
15
500
10
5
0
2009
2010
Depositors
2011
2012
Deposits Outstanding
2013
0
Deposits outstanding in billions
On the savings side, the
number of depositors grew by
more than 24 percent, rising to 2.2
million in 2013 as compared to
1.7 million in 2012. The value of
deposits witnessed an even more
significant growth of 58 percent
from PKR 21 billion in 2012 to
PKR 33 billion in the year under
review (Exhibit 2.8). Resultantly,
deposits now represent 74
percent of the total liabilities
of the MFB peer group – an
increase from 66 percent in the
previous year. Deposits continue
to outgrow the loan portfolio of
MFBs, as is evident from the rise
in deposits-to-gross loan portfolio
ratio from 111 percent in 2012 to
117 percent in 2013.
Exhibit 2.7: GLP by of Eight Largest MFPs
Depositors in thousands
More than 80 percent of the
industry’s GLP is accounted for by
nine MFPs (see Exhibit 2.7). In the
year under review, KBL surpassed
TMFB to become the largest player
in terms of size of its portfolio
which stands at PKR 8.9 billion
as compared to PKR 8.3 billion
of TMFB. This is reflective of the
active borrowers of KBL (highest
in the sector) coupled with a shift
towards higher average loan size.
TMFB, the second largest player
in terms of portfolio size has a
GLP of PKR 8.3 billion despite a
market share of 8.2 percent in
terms of client outreach. This is
driven by TMFB’s above average
loan size, primarily on the back
of secured financing products
which constitute 80percent of its
total loan portfolio. Other sizeable
players include the National Rural
Support Program (NRSP), NRSP
Bank and Kashf Foundation (KF).
Exhibit 2.9: Deposit Growth by MFB
2013
2012
POMFB
Ubank
0.03
0.03
0.21
AMFB
0.76
FINCA
2.74
1.83
NRSP-B
3.62
4.04
KBL
7.13
6.57
FMFB
7.81
8.37
TMFB
10.63
5
In PKR Billions
0
10
The largest increase in the
number of depositors came
from KBL which added 215,000
new depositors followed by
NRSP Bank which added 28,000
depositors. Similarly, KBL was
also the largest contributor to
the value of deposits; by adding
PKR 3.1 billion worth of deposits
to increase its deposit base from
PKR from PKR 4.0 billion in 2012
to PKR 7.1 billion in 2013 (exhibit
2.9). KBL was followed by TMFB
whose deposits grew by PKR 2.3
billion to close its balance sheet
at PKR 10.6 billion deposits.
In percentage terms, NRSP
Bank saw the greatest percentage
increase (98 percent) in the value
of deposits which had increased
from PKR 1.8 billion in 2012 to
PKR 3.6 billion in 2013.
The average deposit size of
the MFBs stood at PKR 15,000,
an increase of 25 percent from
previous year. However, except
for FMFB, NRSP Bank and AMFB,
average deposit size of MFBs is
below the industry average as
shown in the Exhibit 3.0. NRSP
Bank has the highest average
deposit size at PKR 33,400
followed by FMFB with PKR
29,700 showing a significant
amount of institutional deposits in
Exhibit 2.10: Average deposit size of MFBs
40.0
35.0
33.4
In PKR Thousands
30.0
29.7
25.0
24.0
20.0
13.6
15.0
10.0
10.6
12.8
10.0
their mix.
5.0
0.0
KBL
TMFB
1.5
POMFB
FMFB
NRSP-B FINCA
Average Deposit Account Balance
AMFB
U-Bank
Industry Average
27
Micro-insurance indicators
– number of policy holders and
sum insured – continued to show
a positive trend in the year 2013.
The number of policy holders
grew by 6.2 percent over the
year, going from 2.8 million to 3.0
million, while the sum insured
increased by 11.7 percent. It grew
from PKR 36 billion in 2012 to
PKR 40 billion at end of 2013.
The greatest increase in microinsurance came from the MFB
peer group whose policy holders
and sum insured increased
by 15 percent and 40 percent
28
35
140%
30
In PKR Billions
25
100%
20
80%
15
60%
10
Deposit -to - GLP Ratio
120%
40%
5
20%
0
2009
2010
Deposits
2011
GLP
2012
2013
0%
Deposit-to-GLP
Exhibit 2.11B: Deposit-To-GLP Relation for individual MFBs
12
550%
10
450%
8
350%
6
250%
4
150%
2
50%
0
TMFB
POMFB
FMFB
Deposits
NRSP-B
GLP
FINCA
AMFB
Deposit-to-GLP
U-Bank
-50%
Deposit -to - GLP Ratio
A comparison across MFBs
shows that U-Bank carried the
high Deposit-to-GLP ratio of 496
percent (Exhibit 2.11 B). In a span
of one year, U-Bank has managed
to attract a deposit base of PKR
205 million as compared to a loan
portfolio of only PKR 41 million.
It is important to mention here
that the value of deposits of five
MFBs (out of eight reporting MFBs)
is greater than the value of their
loan portfolios. This shows that
MFBs continue to be successful in
tapping deposits.
Exhibit 2.11A: Deposit-To-GLP Relation for MFBs
In PKR Billions
The Deposit-to-GLP ratio has
shown modest improvement for
MFBs; the ratio increased from
111 percent in 2012 to 117
percent in 2013 (Exhibit 2.11 A).
The increase in the ratio depicts
MFBs heavy reliance on deposits
as a primary source of financing
as it keeps their cost funding at
reasonably low levels. During
the year, the cost of funds of
MFBs stood at 7.3 percent as
compared to an average of 9.5
percent of non-bank MFIs. The
liquidity position of MFBs can also
be determined by the depositto-GLP ratio; a high ratio implies
that MFBs have excess funds at
hand and are adequately liquid.
Moreover, the cost of funds has
remained in single digits despite
mobilizing deposits at above
market rates.
3.60
3.40
3.20
3.00
2.80
2.60
2.40
2.20
2.00
50
40
30
20
1.80
1.60
1.40
1.20
10
0
2009
2010
2011
Policy Holders
2013
2012
Sum Insured
Average Loan Balance Per GDP
Exhibit 2.13: Depth of Outreach by Peer Groups
25%
20%
15%
10%
5%
0%
2009
2011
2010
RSP
MFI
MFB
2012
Industry
Cut - off
2013
Sum Insured in PKR Billions
Policy Holders in millions
Exhibit 2.12: Growth in Number of Policy Holders and Sum Insured
respectively. However, RSPs
reaming the largest providers
of micro-insurance and hold 41
percent of the market share in
terms policy holders. Among
the types of insurance policies,
credit life insurance policies
constitute almost 61 percent of
total insurance policies followed
by health insurance policies at 39
percent.
SCALE AND OUTREACH:
DEPTH
The depth of outreach in microcredit operations is measured
by a proxy indicator: average
loan balance per borrower in
proportion to per capita gross
national income (GNI). A value
of below 20 percent of GNI is
assumed to mean that the MFP
is poverty focused (exhibit 2.13).
Comparison across peer groups
shows that MFBs tend to target
the upper end of the market
through relatively larger loans,
with a ratio of 20.2 percent
whereas MFIs and RSPs are more
focused on the lower end, with
ratios of 8.6 percent and 9.6
percent respectively. Except for
five institutes (TMFB, NRSP Bank,
FINCA, AMFB and U-Bank) all of
the other MFPs fall below the
benchmark of 20 percent.
The ratio of average loan
balance to per capita GNI
witnessed a modest decline for
RSPs and MFIs, while the ratio for
MFBs remained stagnant at 20.2
percent. This could be interpreted
as the sector continuing to target
the poor but also has implications
for appropriate loan sizes in the
context of Pakistan’s inflationary
environment. Erosion in the value
of money means that a loan of a
loan worth of PKR 30,000 in one
year would be considerably lower
in value in the following year.
29
The different values for the
ratio among the peer group point
toward market segmentation
as MFBs move towards upper
segment of the microfinance
market whereas non-bank MFPs
including MFIs and RSPs target
lower segment of the same
market.
Exhibit 2.14: Lending Methodology
3,500
3,000
73%
2,500
76%
2,000
1,500
88%
90%
1,000
27%
500
30
2011
2012
2013
Individual Borrowing
Group Borrowing
Exhibit 2.15: Outreach to Women: Credits and Deposits
70.0%
45.6%
60.3%
55.2%
51.8%
50.0%
40.0%
63.41%
60.0%
30.0%
2009
27.9%
0.0%
19.4%
10.0%
16.9%
20.0%
19.4%
Women borrowers remain
an integral part of the Pakistan
microfinance sector and lending
to women has been encouraged
by various donor and regulatory
bodies. The national apex – PPAF
– provides funding to MFPs based
on a commitment that at least
40 percent of the borrowers will
24%
22%
12%
2010
10%
2009
0
Gender Distribution
The proportion of women
borrowers showed a slight decline
in the current year, decreasing
from 63.4 percent in 2012 to 60.3
percent in 2013 (exhibit 2.15). On
the other hand, the percentage
share of women depositors saw
a significant increase to 27.9
percent as compared to a 19.4
percent in 2012. The shift in
proportions was a consequence
of KBL and NRSP Bank which were
one of the largest contributors to
active borrowers in the current
year, and more than 70 percent
of their client base constitute of
male borrowers.
78%
2011
2012
2013
8.4%
Majority of MFPs follow the
group lending methodology – in
2013, 73 percent of the active
borrowers represented group
lending (see Exhibit 2.14). Over
the years, individual lending has
gained momentum and its share
has increased from 10 percent
in 2009 to 27 percent in 2013.
During the current year, Kashf
Foundation and TMFB were the
main drivers for the increase in
the share of individual borrowing
from 24 percent in 2012 to 27
percent in 2013.
Active Borrowers In Thousands
Lending Methodology
2010
Proportion of active women borrowers
Proportion of active women depositors
Exhibit 2.16: GenderDistribution ofCredit Outreach by PeerGroups
100%
90%
80%
70%
60%
50%
40%
26%
90%
74%
60%
74%
40%
30%
20%
10%
0%
Portfolio Distribution by Sector
10%
MFI
Total
RSP
Female Borrowers
Male Borrowers
Exhibit 2.17: Active borrowers by sector
100%
6%
90%
0%
6%
8%
0%
7%
80%
9%
11%
36%
36%
70%
8%
9%
0%
9%
0%
9%
7%
15%
0%
9%
9%
8%
38%
35%
30%
60%
50%
15%
14%
30%
20%
29%
23%
15%
16%
16%
23%
22%
22%
10%
0%
2009
2010
Agriculture
2011
2013
2012
Livestock/Poultry
Manufacturing/Production
Trade
Housing
Services
Other
Exhibit 2.18: Composition of GDP from 2010-2013
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
MFIs and RSPs contribute the
most to female outreach. Only
26 percent of the MFB clients are
women (Exhibit 2.16).
26%
MFB
40%
be women. Large players such as
ASA Pakistan, BRAC Pakistan and
NRSP have portfolios that mostly
constitute of women borrowers,
whereas, Kashf Foundation only
lends to women borrowers.
53%
57%
57%
58%
58%
25%
21%
21%
20%
21%
40%
22%
22%
22%
22%
2009
2010
Services
2011
2012
Industry
Agriculture
The trading and agriculture
sectors continue to dominate
the sector-wise distribution of
microcredit, together accounting
for 52 percent of borrowers in
2013 (Exhibit 2.17). These are
followed by livestock which makes
up 16 percent of the borrowers,
while the manufacturing sector
continues to be a distant third by
accounting for only 9 percent of
the borrowers. However, during
the year portfolio distribution
witnessed noteworthy change
with the trade sector lending
which decreased from 35
percent in 2012 to 30 percent in
2013. The trade sector primarily
comprises of general stores,
karyana shops, stall hawkers, fruit
vendors, etc.
The predominant share of
services and trade is reflective of
the general trend in the country’s
economy where services sector
has continued to account for
over 50 percent of the GDP (see
Exhibit 2.18). In addition, due
to persistent energy shortfall,
manufacturing even at the micro
level is hardest hit. With MFBs
focusing on the microenterprises
we are likely to see the
continuation of increase in the
share of services and trade.
21%
2013
31
Rural- Urban Lending
The share of rural borrowers
continues to dominate the
sector; out of total borrowers,
58 percent belong to rural areas
while 42 percent belong to
urban areas (Exhibit 2.19). In the
year under review, the share of
rural borrowers saw an increase
of 2 percent, primarily on the
back of NRSP, NRSP Bank and
KBL. As mentioned earlier, these
three institutions were the main
drivers of growth in terms active
borrowers, cumulatively adding
134,000 borrowers in 2013.
Majority of the borrowers of
these organizations belong to the
rural segment of the population,
resultantly increasing the share
of rural borrowers. On the other
hand, BRAC P, whose portfolio
mostly consists of urban clients,
witnessed a significant decrease
in the number of borrowers in the
current year.
32
Exhibit 2.19: Active Borrowers by Urban/Rural Areas
100%
90%
80%
70%
60%
50%
40%
55%
52%
45%
48%
2009
2010
46%
56%
58%
44%
42%
2012
2013
54%
30%
20%
10%
0%
2011
Rural
Urban
FINANCIAL STRUCTURE
This section focuses on the asset base and capital structure of the
microfinance industry.
Asset Base
Exhibit 2.20: Total Asset Base of the Industry
The asset base of the industry
stood at PKR 81.5 billion in 2013,
up from PKR 60.5 billion in the
previous year showing a growth
of more than 34 percent. This
increase has been partially due
to the inclusion in the dataset
of FINCA MFB, AMFB, U Bank and
number of smaller non-bank MFIs
which accounted for PKR 7.8
billion increase in the asset base
for the year.
16%
16%
68%
MFB
RSP
MFI
Exhibit 2.21: Total asset base by peer group
55.4
60.0
38.7
40.0
2009
2010
2012
2011
MFB
MFI
RSP
13.5
12.7
10.4
11.4
6.4
12.5
5.2
9.6
0.0
17.8
10.0
21.1
20.0
29.8
30.0
3.8
8.9
PKR in billions
50.0
2013
As shown in the Exhibit 2.20
above, MFBs accounted for more
than 68 percent of the total
assets of the industry followed
by RSPs and MFIs with 16 percent
share each. The asset size of
MFBs continues to increase with
time. In 2013, the asset base of
MFBs stood at PKR 55.4 billion
as compared to PKR 39.7 billion
in the previous year (see Exhibit
2.21). This can also be attributed
to inclusion of data of FINCA MFB,
AMFB and U-Bank data.
The expansion in the RSP and
MFI peer group has been more
modest as compared to banks.
MFIs asset size stood at PKR 13.5
billion in 2013 as compared to
PKR 10.4 billion 2012. The asset
base of RSPs stood at PKR 12.7
billion up from 11.4 billion in the
previous year.
Among the MFPs, TMFB
continues to remain the largest
player in terms of asset size with
balance sheet of PKR 15.1 billion.
This is closely followed by KBL
whose asset base stood at PKR
13.2 billion. Among the MFIs, KF
33
Exhibit 2.22: Asset base of larger MFPs
2012
1.6
2.0
PRSP
2.4
2.8
FINCA
4.0
3.8
Kashf
4.6
7.1
7.3
NRSP
8.3
FMFB
9.5
6.3
NRSP Bank
9.8
10.0
KBL
TMFB
15.2
10
In PKR Billions
0
20
Exhibit 2.23: Asset utilization ratio 2009-13
50.0%
40.0%
54.5%
60.0%
56.7%
The asset utilization ratio for
the industry stood at 54.5 percent,
slightly lower than last years as
shown in the Exhibit 2.23. The
trend over last five years shows
that generally asset utilization
ratio has largely remained range
bound. Among the peer groups,
the ratio shows great variation
(see Exhibit 2.24). MFIs have
the highest ratio with 71.6
percent followed by RSPs with
52.9 percent and MFBs with the
lowest at 50.7 percent. Low asset
utilization ratio for MFBs can be
attributed to lower GLP of large
players like FMFB and FINCA and
secondly, due to recently acquired
banks like U-Bank and AMFB.
13.3
13.3
55.0%
Asset Composition
54.7%
Overall, the industry continues
to remain concentrated with
nine MFPs constituting up to 84
percent of the asset base of the
total industry. Five of these are
MFBs as shown in the Exhibit 2.22
below.
ASA-P
2012
2013
51.2%
continues to have the largest
asset size with PKR 4.5 billion. The
same hold for RSPs where NRSP
continues to hold the top position
with an asset base of PKR 7.3
billion.
30.0%
20.0%
10.0%
0.0%
2009
2010
2011
Asset Utilization Ratio
Exhibit 2.24: Asset utilization ratio by peer group
80.0%
71.6%
70.0%
60.0%
50.7%
52.9%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
MFBs
MFIs
Asset Utilization Ratio
34
2013
RSPs
79.4%
76.4%
54.5%
South Asia
Middle East
North Africa
Latin America &
The Caribbean
Eastern Europe
& Central Asia
30%
20%
10%
0%
Pakistan
69.1%
East Asia
& the Pacific
67.5%
65.6%
Africa
100%
90%
80%
70%
60%
50%
40%
89.8%
Exhibit 2.25: Regional comparison of asset utilization ratio
Proportion of Total Assets
Exhibit 2.26: Asset composition by peer group
100%
90%
80%
70%
60%
50%
40%
24%
18%
3%
3%
20%
24%
53%
55%
24%
21%
4%
0%
5%
0%
71%
76%
27%
16%
5%
9%
2%
6%
65%
70%
30%
20%
10%
0
2013
2012
MFB
24%
3%
20%
53%
2013
2012
MFI
18%
3%
24%
55%
24%
5%
0%
71%
2013
RSP
21%
4%
0%
76%
27%
2%
6%
65%
16%
5%
9%
70%
Exhibit 2.27: Capital structure of micro finance industry 2009-13
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Asset composition remained
varied across the peer groups
as shown in the Exhibit 2.26.
Overall, proportion of cash among
all the peer groups witnessed a
decline. This decline is largely
due to extended grace periods
being offered for loans offered
by national apex. Proportion of
advances witnessed an increase
in all of the peer groups which
is reflective of the growth being
experienced by the industry.
However, lower proportion of
advances among MFB peer
group as compared to RSPs and
MFIs shows despite increase
in GLP there is surplus funds
available with them. Moreover,
MFBs continue to hold significant
portfolio as investments, which
witnessed an increase from 20
percent to 24 percent in 2013.
Funding Profile
2012
Cash and Bank Balance
Fixed assets
Investments
Advances
Compared regionally, the asset
utilization ratio for the industry
is low as shown the Exhibit 2.25
below and there is sufficient room
for improvement.
24%
28%
29%
53%
48%
50%
24%
23%
2009
2010
Deposits
37%
44%
21%
2011
Debt
40%
39%
20%
21%
2012
2013
Over past couple of years,
the funding structure of the
industry has been tilting towards
deposits, whereas, the share
of debt financing has been
continuously declining (Exhibit
2.27). As mentioned earlier in the
report, MFBs have been successful
in mobilizing deposits over the
year as part of their deposit led
strategy to fund portfolios. This
has resulted in an increase in the
deposit base of MFBs from PKR 21
billion in 2012 to PKR 33 billion
in 2013. The share of debt in the
capital structure decreased from
44 percent to 39 percent in the
current year, whereas, the share of
equity saw a slight increase of 1
percent.
Equity
35
By the close of the current
year, five MFBs, TMFB, FMFB,
FINCA, AMFB and U-bank had a
deposit base higher than their
total GLP (see Exhibit 2.29). The
overall Deposit-to-GLP ratio of the
MFB peer group remains above
100 percent and in the year 2013,
the stated ratio had increased
from 111 percent to 117 percent
– indicating a greater increase
in deposits as compared to loan
Exhibit 2.28: Funding profile by peer group
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2012
2013
2012
MFBs
2013
2012
MFIs
Deposits
Debt
2013
RSPs
Equity
Exhibit 2.29: Deposit to GLP relation
12.0
10.0
PKR in billions
The funding structure varies
significantly among the peer
group as shown in Exhibit 2.28.
The portion of equity remains
low for MFIs with just 17 percent
of their capital structure. On the
other hand, the share of equity
for MFBs and RSPs remains at
a safe level of 20 percent and
28 percent respectively. MFBs
remain adequately capitalized
due to the Minimum Capital
Requirements (MCR) set by
the State Bank of Pakistan.
Inadequate capitalization of MFIs
can seriously impair the ability to
access commercial finance and
expand their outreach. In order
to increase the equity of MFIs,
PPAF, under its PRISM program,
continued to place equity funds
in mid-sized MFPs to strengthen
their balance sheets.
8.0
6.0
4.0
2.0
0.0
KBL
TMFB POMFB FMFB NRSP-B FINCA AMFB U-Bank
Deposits
portfolio.
The industry continued its
transition to commercial financing
with the ratio of commercial
liabilities to total debt reaching
81 percent in 2013 as compared
to 75 percent in the previous
year as seen in Exhibit 2.30.
Commercial debt currently
stands at PKR 22 billion for the
sector against PKR 5 billion
subsidized debt. The increasing
trend of commercial liabilities is
likely to continue as commercial
financial institutions (local
and international) are opening
up to Pakistan’s microfinance
sector. The year 2013 witnessed
36
Exhibit 2.30: Commercial liabilities to total debt
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2012
2013
2012
2013
2013
Box 2.1: International debt placement
successful placement of funds by international lender. For
detail see Box 2.1.
This was the first successful deployment of debt by an
international lender to a Pakistani microfinance provider
and is reflection of its credit worthiness. A number of
funds have been exploring the local market to extend debt
over the last few years but pricing and hedging premiums
became the stumbling blocks. It is anticipated that this
transaction will be a prelude to other similar transactions
in the future.
Furthermore, commercial banks, which have been
heavily relying on government securities for generating
interest income, will be exploring new avenues of revenue
as the country’s policy rate is expected to stay stable if not
decline.
In September 2013, Economic Cooperation Organization (ECO) Trade
and Development Bank (ETDB), a multilateral development bank with
their Head Office in Turkey signed a Micro SME loan agreement with
NRSP Microfinance Bank Limited. The aim of the facility is to boost
the microfinance services by providing Micro SME loans to the final
beneficiaries in Pakistan. The facility worth USD 7.5 million has tenor
of three years with a grace period of two years.
Exhibit 2.31: OSS & FSS 2009-13
30.0%
20.0%
10.0%
Profitability & Sustainability
The total revenue for the industry stood at PKR 17.3
billion at the close of the year showing an increase over
38 percent from PKR 12.6 billion in 2012. The net income
from the industry stood at PKR 1.2 billion as compared to
PKR 0.9 billion in the previous year. Unadjusted ROA stood
at 2 percent showing a slight increase as compared to 1.9
percent in the same time period whereas ROE stood at 9.0
percent as against 9.7 percent in the previous year. The
slight decline can be attributed to inclusion of the recent
acquired MFBs which have recently seen injection of
equity running into billions.
Operational Self Sufficiency (OSS) and financial self
sufficiency (FSS) for the sector continued to remain
above 100 percent for the third year running as show in
the Exhibit 2.31 below. OSS for the industry showed a
healthy increase to close at 118.1 percent as compared to
109.5 percent in the previous year. Similarly, FSS stood at
116.5 percent as against 107.5 percent in the same time
period. Out of 37 MFPs whose data has been reported in
the review, 30 have an OSS above 100 percent. Among
the peer groups, RSPs have the highest OSS with 140.1
percent followed by MFIs and MFBs at 117.8 percent and
113.1 percent respectively. Continued improvement in OSS
is fuelled by increased income from loan portfolio on the
back of increasing GLP as opposed to rising yields that was
witnessed few years ago. Key future drivers of profitability
will be the increase in GLP which in turn would be a
function of expanding outreach and increasing loan sizes.
0.0%
2007
2008
2009
2010
2011
2012
2013
Adjusted total expense / total assets
Adjusted financial expense/ total assets
Adjusted loan loss provision expense/ total assets
Adjusted operating expense/ total assets
Exhibit 2.32: Yield on gross portfolio (nominal & real) 2009-13
350
300
250
200
150
100
50
0
2009
2010
Loans per staff
2011
Depositors per staff
2012
2013
Loans per Loan Officers
Yield on the portfolio which peaked in 2011 has
gradually been declining over the last two years as shown
in the Exhibit 2.32. In 2013, the yield on portfolio declined
37
to 33.5 percent from 34.3 percent
in the previous year. Yield on
portfolio in real terms increased
slightly from 21.7 percent in the
last year to 22.3 percent in 2013
due to lower inflation rate.
Compared globally the yield
on gross portfolio continues to
be toward the higher side despite
declining over the last two years
as shown in Exhibit 2.33.
Costs after declining over the
last four years appear to plateau
in 2013 as shown in the Exhibit
2.35 below. The declining trend
was due to decrease in all three;
financial expense, loan loss
provision expense and operating
expense. However, in this year
operating expense witnessed a
slight increase to close at 12.7
percent as compared to previous
year’s 12.1 percent. Among the
peer groups RSPs continue to
have the lowest expense ratio
with 15.2 percent, followed by
MFBs with 20.8 percent and MFIs
with 26.0 percent.
38
Exhibit 2.34: Revenue streams
PKR in billions
The total revenues for the
industry stood at PKR 17.3 billion.
Out of this MFBs accounted for
PKR 10.8 billion whereas MFIs
and RSPs revenues stood at PKR
4.0 billion and PKR 2.5 billion
respectively. Nearly 78 percent of
the revenues come from income
from loan portfolio as show in
the Exhibit 2.34. However, the
percentage of the revenue from
financial services which includes
branchless banking is steadily
rising and closed at PKR 2.0
billion. Out of this, just PKR 0.6
billion is the revenues earned
by TMFB from its branchless
banking operations. Earnings from
branchless banking are likely to
grow as other MNO owned banks
like U-Bank and Waseela expand
their operations.
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2009
2010
Loan Portfolio
2012
2011
Financial Services
2013
Financial Assets
Exhibit 2.35: Expense to asset ratios
30.0%
20.0%
10.0%
0.0%
2007
2008
2009
2010
2011
2012
2013
Adjusted total expense / total assets
Adjusted financial expense/ total assets
Adjusted loan loss provision expense/ total assets
Adjusted operating expense/ total assets
12.7%
8.8%
South Asia
Middle East &
North Africa
Pakistan
13.4%
11.2%
Latin America &
The Caribbean
Eastern Europe
& Central Asia
7.2%
10.1%
Africa
6.0%
4.0%
2.0%
0.0%
East Asia
& the Pacific
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
18.3%
Exhibit 2.36: Regional comparison of operating costs
Operating Expense / Assets
Exhibit 2.37: Operating expense & personnel expense to GLP
30%
25%
20%
15%
10%
5%
0%
2009
2010
2011
2012
2013
Operating expense / Gross loan portfolio
Personnel expense/ Gross loan portfolio
Compared globally, operating
expense continues to be on the
higher side. Higher operating
costs can be attributed to
comparatively smaller loan sized
being offered by the industry.
Operating expense to GLP
continues to decline after peaking
in 2010 (see Exhibit 2.37).
Currently, it stands at 22.1 percent
as compared to 23.3 percent in
the previous year. The decline
in the ratio is largely due to
continued increase in the GLP for
the industry. A closer look shows
the administrative expense has
largely remained constant over
time and decline has largely been
fuelled by decline in personnel
expense. One reason for this
decline in personnel expense
can be relatively lower average
salaries for the industry. Among
the peer groups, RSPs have the
lowest operating expense with
13.1 percent, followed by MFIs
with 22.8 percent and MFBs with
24.7 percent.
Despite the declining trend
if we compare globally (Exhibit
2.38), expense to GLP ratios for
the industry are on the higher
end and there is room for further
improvement.
Admin expense/ Gross loan portfolio
Exhibit 2.38: Regional comparison of operating expense
& personnel expense to GLP
25.0%
20.0%
15.0%
10.0%
5.0%
Operating Expense / GLP
Pakistan
South Asia
Middle East &
North Africa
Latin America &
The Caribbean
Eastern Europe
& Central Asia
East Asia
& the Pacific
Africa
0.0%
Personnel Expense / GLP
39
Exhibit 2.39: Personnel allocation ratio 2009-13
The total staff for the industry
stood at 15,673 in 2013 out of
which 6,892 are loan officers. The
personnel allocation ratio for the
industry stood at 44.0 percent
as compared to 49.8 percent in
the previous years. Overall, the
personnel allocation ratio for the
industry has been on a declining
trend for the last three years as
shown in the Exhibit 2.39.
30.0%
2011
2012
44.0%
49.8%
42.9 %
40.0%
50.5
50.0%
20.0%
10.0%
0.0%
2009
2010
2013
Personal allocation ratio
Exhibit 2.40: Deposits and personnel allocation ratio trends
35.0
60.00%
32.9
30.0
50.00%
25.0
40.00%
20.8
20.0
30.00%
15.0
20.00%
10.00%
7.2
5.0
10.1
10.0
13.9
Compared with other regions
as shown in the Exhibit 2.41,
personnel allocation ratio is
higher than few of the regions
but there is potential for further
increase.
60.0%
PKR in billions
This decline has largely been
due to the fall in the value of the
ratio for the MFB peer group. One
of the reasons for this declining
trend can be the MFB’s focus on
mobilizing deposits as shown by
the following trend.
70.0%
57.9 %
Productivity
0.00%
0.0
2009
2010
2011
Deposits
2012
0
2013
Personnel allocation ratio (MFBs)
40
44.0%
59.8%
South Asia
Personnel allocation ratio
Pakistan
55.5%
Middle East &
North Africa
43.2%
Latin America &
The Caribbean
46.2%
35.9%
Eastern Europe
& Central Asia
Africa
20.0%
10.0%
0.0%
East Asia
& the Pacific
70.0%
60.0%
50.0%
40.0%
30.0%
38.4%
Exhibit 2.41: Regional comparison of personnel allocation ratio
Overall, all the main
productivity indicators continued
to exhibit an improving trend (see
Exhibit 2.42). Loans per staff stood
at 144 in 2013 as compared to
135 in the 2012. Loans per loan
officers stood at 327 up from
264 in the previous year. Also,
depositors per staff decreased
slightly from 283 in previous
year to 269 in 2013. The ratios
vary among the peer groups and
individual MFIs due to difference
in their lending methodologies.
Exhibit 2.42: Productivity of MFPs
350
300
250
200
150
100
50
0
2009
2011
2010
Loans per staff
2012
2013
Exhibit 2.43: Regional comparisons of productivity indictors
Compared to other regions as
show in the Exhibit 2.43 below,
the industry is better placed
than many but there is room for
improvement.
Risk
Credit Risk
Loans per Staff
Pakistan
South Asia
Middle East &
North Africa
Latin America &
The Caribbean
Eastern Europe
& Central Asia
East Asia
& the Pacific
Africa
800
700
600
500
400
300
200
100
0
Depositors per Staff
Overall, the Portfolio at Risk
> 30 days continued to remain
below 5 percent cut off which
reflects on the quality of the
microfinance portfolio in the
country. The PAR > 30 days for
the year stood at 2.5 percent
as opposed to 3.7 percent in
the previous year showing an
improvement as shown in the
Exhibit 2.44. Similarly, write
offs fell to 1.5 percent from 2.3
percent in the same time period.
In absolute terms the PAR > 30
days stood at PKR 1.1 billion
against PKR 1.2 billion in the
previous year. All these indicators
point to improving portfolio
quality.
41
The risk coverage ratio
remained stable in the year 2013
at 61.2 percent as compared
to 61.6 percent in the previous
year. The ratio varied among the
peer groups with RSPs having the
highest value at 150.4 percent,
followed by MFBs at 96.3 percent
and MFIs are 31.3 percent. The
lower value of the risk coverage
ratio is primarily due to higher
PAR value for the MFI peer group.
On the whole, with the PAR>30
days value remaining below 5
percent cut off point and slight
improvement over the year
reflects positively on the quality
of the portfolio for the industry.
However, the lower value can also
point towards risk averseness
among the players.
With the national roll out of
MF-CIB and initiation of enquiries
by the practitioners, credit risk
will be further mitigated by
identifying cases of multiple
borrowing and intentional
defaulters. According to data
extracted from MF-CIB, initial
findings show the occurrence
of multiple borrowing up to
21 percent. The CIB is a new
phenomenon for the sector
but already service providers
are using this information for
their outreach expansion, and
scaling up loans and managing
delinquencies.
42
Exhibit 2.44: PAR >30 days & Write offs
8.0%
7.0%
3.6%
6.0%
Active Borrowers In Thousands
However, PAR > 30 days varies
among the three per groups as
shown in the Exhibit 45 below.
The PAR value was lowest for MFB
peer groups at 1 percent, followed
by RSPs at 1.6 percent and MFIs at
7.7 percent. Higher value among
MFI peer group was driven by
higher PAR value among leading
MFIs like KF (17.5 percent), OPP
(17.6 percent) and BRAC-P (5.5
percent).
2.6%
4.0%
3.0%
2.3%
1.8%
5.0%
4.1%
3.7%
3.4%
1.5%
2.9%
2.0%
2.5%
1.0%
0.0%
2009
2010
2011
Portfolio at Risk >30 days
2012
Write Off
2013
Cut off
Exhibit 2.45: PAR > 30 days by peer group
9.0%
8.0%
7.7%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.6%
1.0%
1.0%
0.0%
MFBs
MFIs
Portfolio at Risk >30 days
RSPs
SOCIAL GOALS
Review of Institutional Profiles and Services
Introduction
Exhibit 2.46: MFPs' key statistics
Microfinance in Pakistan is essentially a double-bottom
line industry – sustainability is not the end in itself; rather
it is the means to achieving social goals. These goals can
differ: some MFPs may have a vision of poverty alleviation,
others of women empowerment, while yet others may be
working for increasing access to formal financial services.
Target Markets
8
Other
Adolescents
and youth
9
Clients living in
urban areas
32
Clients living
in rural areas
36
Women
37
0
5
10
15
20
No. of MFP responses
25
30
35
40
In order to better attain an institution’s intended goals,
microfinance stakeholders around the world now believe
that unless an MFP’s systems, activities and outputs are
deliberately geared towards its social vision, it is difficult
to make the impact that the institution is aiming at. For
an MFP, therefore, performance management thus means
focusing simultaneously on its financial and social bottom
lines.
By peer group
Analysis of the sector’s institutional profiles
40
5
5
25
4
22
19
20
10
0
9
9
7
1
8
1
RSPs
MFIs
6
1
Other
Adolescents
and youth
Clients living in
urban areas
Clients living in
rural areas
0
Women
30
Target Market
MFBs
Top priorities
40
36
34
30
Identifying their target markets helps to focus MFP
efforts and optimize the limited resources available.
Providing services that are relevant, client oriented and
effective in serving an organization’s mission requires a
clear understanding of the population that an MFP aims
to reach. MFPs target markets are highlighted in Exhibit
2.46, panel 1, and a peer group wise breakdown is given in
Exhibit 2.46, panel 2. Generally, clients are targeted based
20
18
1: Reporting on social performance indicators is a new develop-
17
10
ment in the global microfinance landscape. The indicators
themselves, their collection and validation process and analytics are in evolution. Efforts have been made by PMN and MIX
Clients living in
urban areas (top3)
Women (top 3)
Clients living in
rural areas (1stpriority)
Clients living in
urban areas (1stpriority)
Target Market
Women
(1stpriority)
7
0
Clients living in
rural areas (top 3)
30
The Microfinance Information eXchange (MIX), in
collaboration with the Social Performance Task Force (SPTF)
has developed a social performance reporting framework
for MFPs. This framework currently focuses on capturing
information on an institution’s vision, target segments and
services. An analysis of selected self-reported1 indicators
from the 2013 institutional profiles of 39 reporting MFPs2
from Pakistan follows.
to validate the information provided by MFPs but it should be
kept in mind that it remains largely self reported.
2: These include AGAHE, Akhuwat, AMFB, AMRDO, ASA, Asasah,
BEDF, BRAC, CSC, DAMEN, FFO, FINCA MFB, FMFBP, GBTI, JWS,
KBL, KF, Micro Options, MOJAZ Foundation, Naymet Trust,
NRDP, NRSP, NRSP-B, OCT, OLP, OPD, POMFB, PPCBL, PRSP,
RCDS, SDF, SRSO, SRSP, SSF, SVDP, TMFB, TRDP, U-Bank, and
WASIL.
43
45
40
5
35
5
25
30
23
25
4
5
21
17
5
3
21
20
18
4
15
3
8
10
8
9
6
4
44
2
2
2
2
RSPs
MFIs
MFBs
Exhibit 2.48: Poverty targets by peer group
40
35
30
25
Poverty targets
MFIs
RSPs
MFBs
No specific
poverty target
Low income
clients
Poor
clients
20
10
5
0
Housing
Water and
sanitation
Children's
schooling
Youth
opportunities
Development of
start-upenterprises
Gender equality and
women's empowerment
Employment
generation
Increased access
to financial services
Growth of
existing businesses
Poverty
reduction
0
Very poor
clients
These broad themes translate
into a range of development
objectives for service providers.
The most common objective is
poverty reduction, with all 39
reporting MFPs citing this as
one of their objectives. This is
followed by growth of existing
businesses, employment
generation, and gender equality
and women’s empowerment as
the most common development
objectives across all peer groups
(Exhibit 2.47).
2
6
3
5
4
0
A look at mission statements
of MFPs clearly shows that
nearly all MFPs have some social
ideals built into their mission
and there are common themes
across them. Interestingly, mission
statements of the microfinance
banks are relatively more focused
on expanding access to quality
financial services to low income
population and as a result improve
their quality of life, economically
and socially. Themes of poverty
alleviation, empowerment of the
‘marginalized’ and expanding
economic opportunities emerged
as more common amongst the
non-bank MFPs, especially the
multidimensional organizations.
Social mobilization and organizing
the poor is a common goal of all
rural support programmes. A focus
on women is quite common in the
sector as well.
3
8
1
Improvement
of adult education
9
5
Development Goals
2
12
12
Health
improvement
Amongst the identified target
markets, a few were much more
popular amongst MFPs in Pakistan
than others. The top three priority
target groups were women,
closely followed by clients living
in rural areas and clients living
in urban areas, respectively (see
Exhibit 2.46 , panel 3).
Exhibit 2.47: Development goals by peer group
on gender and location, with a
few MFPs also targeting youth
as well as other groups such as
government pensioners, religious
minorities and persons with
disabilities, and microenterprises
working with renewable energy.
Poverty Targeting
40
35
5
30
24
25
20
5
2 2
13
Housing
loans
2 3
SME loans
Micro credit \for
other household
needs/ consumption
5
1
Other
3
6
5
Loans for
education
2
5
8
Loans for
livestock
9
Loans for
agriculture
15
10
5
0
In terms of poverty level of targeted clients, 70 percent
of institutions reported targeting more than one segment
of the poor. The most common target market for the sector
in terms of income is low income clients, closely followed
by poor clients. Eight non-bank institutions reported
targeting very poor clients. MFIs and RSPs are largely
targeting both poor and low income clients.
18
Micro credit
loans for micro
enterprises
Exhibit 2.49: Credit offerings by peer group
Credit products offered
RSPs
MFIs
MFBs
All reporting organizations offer microcredit services.
However, the number and kinds of credit products
vary across institutions. Due to the different needs of
clients, it is important for MFPs to develop a product mix
that accounts for these needs. In addition, increasing
competition and maturing markets require MFPs to go
beyond ‘cookie cutter’ approaches and differentiate their
products to serve different market segments and customer
demands. Exhibit 2.49 shows the range of activities for
which microcredit services are available in Pakistan.
10
29
Yes
No
10
9
8
6
4
Deposits
4
3
2
Compulsory
savings accounts
(cash collateral)
Special purpose
savings accounts
Fixed term
deposits
Checking
accounts
RSPs
MFIs
MFBs
Savings product offered
Other
1
0
Voluntary
savings
accounts
No. of MFPs
Loans for microenterprises are by far the most common,
with 38 out of 39 reporting organizations offering these,
followed by agricultural microcredit, with 31 MFPs
offering this. Other activities for which a limited number
of MFPs offer credit products include other household
and consumption needs, livestock, education, housing,
alternative energy and community infrastructure.
This range suggests that product differentiation in credit
is under way and MFPs are beginning to offer products
beyond the typical microenterprise loan. However, while it
is important to offer a pertinent product mix to clients, it is
also important to maintain an optimal balance between the
range of products and the institution’s capacity to manage
information, clients and staff to ensure effective provision
of services to clients.
12
1
9
Microfinance refers to a range of financial services
for the low income and poor households. These include
savings, insurance and money transfer services along with
credit. This sub-section summarizes the different financial
products offered by MFPs in Pakistan.
Credit
Exhibit 2.50: Savings products offered, overall and
by peer group
8
Products and Services: Financial
Only 10 out of 39 reporting MFPs offer savings services.
The ability to offer this service is largely determined by
the legal status of an MFP: all MFBs, by virtue of being
regulated banks, are allowed to intermediate3 client
deposits, and thus all nine reporting MFBs take deposits.
3: Intermediation: Public deposits are used to finance an organization’s loan portfolio. Only the central bank -- State Bank of
Pakistan (SBP) regulated institutions (includes MFBs only) can
accept and intermediate deposits from the general public.
45
Non-bank MFPs can only mobilize4
deposits. Only one reporting RSP
reported mobilizing deposits.
Exhibit 2.50 depicts savings
offerings by MFPs in Pakistan by
sector and peer groups.
Exhibit 2.51: Insurance provisions by sector and peer groups
All MFBs offer fixed term
deposits as well as voluntary
savings accounts, followed by
checking accounts. making this
the most popular savings product
offered by them. On average,
MFBs offer four kinds of savings
services. There is room for MFBs to
further diversify kinds of savings
products on offer.
33%
67%
Yes
No
Insurance
4: Mobilization: MFPs not regulated
by the SBP (includes MFIs, RSPs
and Others) can neither hold nor
intermediate deposits from the
public. These organizations however, can mobilize savings from
their clients to place onwards with
licensed commercial banks.
46
25
20
15
10
5
RSPs
MFIs
MFBs
Agricultural
insurance
Other
Hospital and accidental
death insurance
0
Credit life
insurance
No. of Responses
Offering micro insurance serves
to protect vulnerable clients
against risk of losses. Majority of
reporting MFPs offer insurance
products to meet clients’ needs.
This indicator looks at compulsory
insurance, which is typically
clubbed with credit products. Out
of the 26 reporting MFPs offering
insurance products, the majority
of MFPs offer credit life insurance
only, with limited MFPs offering
other types of insurance such as
health and agriculture etc. (see
Exhibit 2.51). However, over the
past few years, some MFIs have
introduced varied insurance
products from only offering
credit life insurance to offering
accidental death, livestock and
agricultural insurance products
as well. Generally, there is need
to expand insurance services to
cover a wider set of risks that
vulnerable clients face.
Other Financial Services
Exhibit 2.52: Provision of other financial services
The provision of other financial
services is marginally low, with
primary suppliers being MFBs.
However, some MFIs are now
offering clients the facility to
repay loan installments through
branchless banking agents.
12
10
2
8
6
1
7
6
4
3
2
3
1
1
2
Micro leasing
Mobile banking
services
Debit/Credit
card
Repayments through
branchless banking
Remittances
services
Savings
facilitation
services
0
RSPs
MFIs
MFBs
Other financial products/services offered
Products and Services: NonFinancial
Exhibit 2.53: Non-financial services
25
15
4
18
3
16
4
14
10
4
11
5
Services Offered
RSPs
MFIs
MFBs
Health services
Education
services
Enterprise
services
0
Women's
empowerment
services
No. of Responses
20
All MFBs in the data set offer
one or more other financial
service amongst the following
categories: debit/credit card,
mobile banking services, savings
facilitation, remittances services,
and micro leasing. As shown
in Exhibit 2.52, 10 MFPs offer
savings facilitation services
and six MFBs offer remittances
services to their clients. Three
out of nine MFBs offer debit/
credit cards and two offer mobile
banking services.
To strengthen livelihoods of
vulnerable clients, MFPs offer
non-financial services in addition
to financial products and services;
frequently supplied in partnership
with specialized public or private
agencies. These services vary
according to the capacity and
vision of the institution, but the
purpose is to develop client’s
skills and/or provide basic
services that they are unable to
attain due to financial limitations.
This can take the form of provision
of basic services like health and
education or business and/or
technical skills training. For the
purpose of this analysis, such
services are grouped into four
main categories: enterprise,
education, health and women’s
empowerment.
MFIs and RSPs are actively
providing all four types of nonfinancial services in the market;
especially those committed to
a particular social mission (see
Exhibit 2.53). While MFIs and RSPs
47
are offering at least one (in some
cases multiple) non-financial
service, only one MFB is offering
education services to its clients
currently. Women’s empowerment
services are the most popular
non-financial service being
offered by MFPs; this is not
surprising since the majority of
MFPs in Pakistan target women
as their priority market, and their
fundamental social mission relates
to women’s economic uplift. Such
services usually include women’s
rights education/gender issues
training and leadership training.
Enterprise services, such as
enterprise skills development and
business development services
are also popular; followed by
education services like financial
literacy education, child and
youth education and basic health/
nutrition education; and health
services like basic medical and
special medical services for
women and children.
Exhibit 2.54: Poverty assessment tools used by MFPs
Poverty Scorecard
provided by PPAF
Per capita household
expenditure
Per capita
household income
Grameen Progress out
of Poverty Index (PPI)
Participatory Wealth
Ranking (PWR)
Own proxy
poverty index
Housing index
Means test
Food security index
USAID Poverty
Assessment Tool (PAT)
0
Transparency of Cost
Client poverty level
assessments serve multiple
purposes like guide client
targeting and selection for
MFPs, establish baselines of
client poverty for later impact
evaluations, appraisal of financial
services to better suit needs of
clients and overall measurement
of the program’s effectiveness.
Globally the case of adopting
the declining balance method
to calculate and display interest
rates to clients is widely accepted
as the ‘transparent’ way. While
Pakistani MFPs accept the
importance of employing the
declining balance method of
calculation and disclose interest
rates, the majority of the MFPs
in Pakistan are still using the flat
methodology, primarily due to
the simplicity in calculation and
marketing. As per State Bank of
Pakistan’s regulations, however,
MFBs under its regulatory
framework are bound to disclose
interest cost using the declining
balance method to clients. There
is some resistance by MFPs
generally in switching from flat
to declining balance interest
rate disclosures, fearing loss of
clientele owing to a lack of level
playing field in the absence
48
10
15
20
No. of Responses
RSPs
MFIs
MFBs
Tracking Poverty
38 out of 39 reporting MFPs
measure client poverty levels.
While some MFPs employ one
method to measure poverty levels,
some use multiple assessment
tools. As shown in Exhibit 2.54,
the majority of MFIs use at least
the Poverty Scorecard provided
by Pakistan Poverty Alleviation
Fund (PPAF) and designed by
The World Bank, whereas the
majority of MFBs record per capita
household expenditure or per
capita household income method
to gauge client poverty levels.
5
of regulations mandating all
peer groups to follow a similar
methodology.
Out of 39 MFPs, 26 are using
the flat interest rate method, 14
are using the declining balance
method and two MFPs reported
interest rates as not being
applicable (n/a), having shifted
to Islamic products, as shown in
Exhibit 2.55. Out of the 14 MFPs
using declining balance interest
rate disclosures, it is interesting
to note that six of these are nonregulated entities, indicating a
positive step towards increased
transparency in displaying costs.
However, there is considerable
room for improvement to
switch to greater pricing
transparency to provide clients
with a standardized disclosures
methodology for easier
understanding and comparison
across products and MFPs for
Exhibit 2.55: Methods of stating service cost by sector
and peer groups
decision-making. Box 1.3 in Section 1 gives findings and
regional comparisons from a recent Pricing Transparency
Initiative conducted in Pakistan in collaboration with
MFTransparency to publish standardized APRs5 of loan
products across MFPs in Pakistan.
2
14
CONCLUSION
26
Flat interest
Declining balance
N/A
The industry witnessed another year of double digit
growth in outreach. GLP reached all time high on the
back of continued increase in number of borrowers and
increasing loan sizes. MFBs continued to experience
success in deposit mobilization. Overall, women borrowers
continue to dominate the market and groups lending
continues to remain the methodology of choice. Credit life
continues to dominate the micro-insurance segment.
30
25
No. of MFPs
20
3
21
15
3
10
3
8
5
0
2
Flat interest
The microfinance industry continued to expand and
grow over the last one year. The previous year witnessed
the emergence of leading strong institutions which are well
positioned to become engine of growth for the industry
based on their experience, size and financial strength.
2
N/A
Declining balance
RSPs
MFIs
MFBs
Industry continues to remain sustainable with OSS
remaining above 100 percent. Yield on portfolio exhibited
declining trend with growth in the industry being future
the key driver of profitability. Despite exhibiting a
declining trend, costs remain high and there remains room
for further improvement. Overall, productivity indicators
continue to point toward improvement. PAR > 30 days
declined further which reflects positively on the quality of
the portfolio.
The industry’s primarily social goal remains elimination
of poverty. Women borrowers remain its principal clients
and low income clients remains its main target market.
In addition to microcredit, micro-insurance and saving
products are being offered by MFPs and the focus is on
holistic financial services at the base of the pyramid.
Moreover, the industry took a big leap towards pricing
transparency last year when its collaborated with MFT to
publish standardized APRs of loan products across the
country.
5: APRs for products of 31 MFPs in Pakistan can be accessed on
the MFTransparency website at the following URL: http://www.
mftransparency.org/microfinance-pricing/pakistan/
49
SECTION 3
Way Forward
SECTION 3
THE WAY FORWARD
With mature institutions, a sound regulatory and policy framework
Pakistan’s microfinance sector appears to be entering a phase of
growth, market segmentation and innovation. Key areas where growth
and innovation can be expected in the near future are discussed here.
TOWARDS THE MISSING MIDDLE
SMEs account for more than 30 percent of the country’s GDP and make up 90 percent of all
economic establishments in the country . They have the potential to generate employment,
increase income and reduce poverty. Due to this, SME lending had been on the agenda of the
policy makers for many years. One of the key constraints for SME growth is access to finance, and
finding appropriate institutions to serve the SMEs has been a serious challenge for policy makers.
There is now a clear view that SMEs need to be broken down into the ‘small’ and ‘medium’ in
order to meet their needs effectively, as clubbing them together puts the smaller enterprises at a
disadvantage. Stakeholders also seem to agree that it will be difficult to commercial banks to scale
down to serve these small enterprises in the foreseeable future. The MFBs, on the other hand,
seem well positioned to scale up from their current microfinance client base to also serve the
small businesses.
SBP through an amendment in the prudential regulations for MFBs now allows them to lend up
to PKR 500,000 for enterprise lending. Several MFBs have started to prepare themselves to enter
this market segment, with six MFBs at this time having sought SBP’s approval. That said, MFBs face
a number of challenges in rolling out their financing solutions for microenterprises. Foremost are
the capacity issues and financing required on-lending. Most of the players are of the view that
the current human resources and infrastructure cannot effectively lend to the missing middle.
This requires capacity building of staff and separate infrastructure for the enterprise lending. In
addition, the loan sizes for these products will be multiple of the current loan size which would
require additional funding.
Strengthening of industry infrastructure in recent years through creation of a MF-CIB will be
crucial in providing credit history of graduating microfinance borrowers who could qualify for
the larger loans. MFBs are also looking at new areas such as agriculture value chain financing
and linkages with other sectors (like low cost private schools - discussed separately below) as
promising areas. Moreover, considerable support for tapping the missing middle is now available
from leading donor like US AID and DFID in form of facilities for refinancing and technical advisory.
The missing middle is a significant new opportunity for the sector but MFBs are moving
carefully into this segment, recognizing that although the dynamics of lending to small and
microenterprises may be similar to the typical microfinance, it is a different segment with its own
risks that they are not completely familiar with.
52
Exhibit 3.1: Share of Branchless Banking Transactions
The branchless banking sector of Pakistan has
witnessed tremendous growth since inception and has
become a role model in the global branchless banking
landscape. In a period of two years, the two-player market
for mobile financial services has expanded to eight players
and is now represented by the entire telecom sector, along
with a the leading commercial banks in the country.
100%
6%
14%
80%
44%
80%
60%
6%
50%
40%
20%
0%
Volume of Transaction
Value of Transaction
Agent Transactions (liquidity management)
M-Wallets
OTC
Exhibit 3.2: Quarterly Growth in Branchless Banking Accounts
60%
50%
40%
30%
20%
10%
0%
Q1 2013
Q2 2013
Q3 2013
Q4 2013
While the growth and uptake of the branchless banking
services are rapid, the focus of the consumer is tilted
towards Over-the-Counter (OTC) transactions. This means
that the transaction must be facilitated by an agent, rather
than by the customer conducting the transaction himself
via his mobile phone. By the end of 2013, the share of OTC
transactions in terms of volume and value were 80 percent
and 50 percent respectively (Exhibit 3.1).
With each year, the branchless banking industry is
becoming more competitive and moving a step closer to
maturity; however its biggest challenge remains moving
beyond money transfer and bill payments, and accelerating
the registration and usage of registered m-wallet accounts.
Despite an increase in the number of branchless banking
players and transactions, the growth in the branchless
banking accounts (M-wallet accounts) was dismal in the
year under review (Exhibit 3.2).
While OTC transactions were a very good entry level
product for branchless banking, there is a need to increase
focus on transactions through mobile wallets. With a
mobile account, a customer can store and access funds
round the clock; he can directly deposit and withdraw
money from his account and conduct various transactions
from his phone.
In Pakistan an estimated 135 million1 people own
a cell phone (75percent penetration rate), whereas, at
an average, only 5percent of Pakistani households use
mobile money, and only about 0.3percent of households
have a registered mobile money account2(Exhibit 3.5).
There is a huge market opportunity in this segment which
branchless banking deployments can effectively tap by
increasing awareness and introducing innovative products
to incentivize consumers towards mobile accounts.
Exhibit 3.3
Central Switch
One-to-One Model
BRANCHLESS BANKING
One-to-Many Model
Many-to-Many Model
Easypaisa has recently introduced two saving products
(Khushaal Beema and Khushaal Munafa) to encourage
customers to open a mobile account. Under Khushaal
Beema, mobile account customers can get free life
insurance by saving PKR 2,000 or more in their mobile
accounts. On the other hand, Khushaal Munafa provides a
return of up to 9 percent upon saving in mobile accounts.
It is important that the success of the branchless
banking sector should not restrict the players from losing
sight of the broader financial inclusion agenda set forth by
the State Bank of Pakistan. Currently, the bulk of activity is
53
The country comprises of 125,027
branchless banking agents as compared
to 13,097 branches3 of commercial banks
and microfinance providers combined. The
presence and coverage of branchless banking
agents coupled with the impressive mobile
phone penetrations rate (75 percent ) is a
definite key to financial inclusion.
Going forward, with the advent 3G network,
we expect to see new developments and
growth in the branchless banking sector.
Nevertheless, the impact of 3G would be
greater in urban areas where more people
have access to smart phones and the literacy
rate is higher as compared to rural areas.
With greater speed, a wider range of financial
services and more comprehensive offerings
can be offered to mobile account holders.
Similarly, internet services would be available
in far off areas with weak or no broadband
infrastructure; this can facilitate branchless
banking agents who can be provided with
smart phones with built-in customized
applications to enhance their efficiency.
The true potential of the sector is set to
unleash once the branchless banking business
models evolve from “one-to-one” and “oneto-many” to “many-to-many”. The many-tomany model involves a central transaction
switch that provides total interoperability,
allowing multiple banks to offer services to
the customers of multiple agent networks or
MNOs (Exhibit 3.3). Interoperable systems
will accelerate financial inclusion by allowing
customers to use the infrastructure of multiple
service providers to access their accounts.
54
Exhibit 3.5: Use of Mobile Accounts
40%
35%
Mobile Money Penetration
mostly in CNIC-to-CNIC money transfers (35
percent of total transactions). For branchless
banking to really take off and bring about
financial inclusion, however, providers need to
move beyond over-the-counter transactions
and promote mobile wallets.
30%
25%
20%
15%
10%
5%
0%
Pakistan
One m-money user in the household
Uganda
Tanzania
One registered m-money user in the household
MICRO-INSURANCE
Poor and low income
populations are often vulnerable
and ill equipped to handle
losses that catastrophic events
inflict upon them. They face
a number of risks including
illnesses, accidents, disability,
deaths, natural disasters – each
having the potential to seriously
damage any gains in income or
assets the poor accumulate over
time. Micro-insurance can play
a role in providing social and
financial protection against such
losses by providing financial
shock absorbency to low-income
households for predictable and
unpredictable risks.
Micro-insurance has been a
part of the microfinance equation
in Pakistan since the take-off of
microcredit, mainly in the form of
credit-life insurance and health
insurance. However, growth and
progress in micro-insurance had
been hampered by the lack of
a clear policy framework. Now
with regulations coming into
effect through the Microinsurance
Rules 2013, it is hoped there will
be further growth, especially in
standalone insurance products for
the poor.
With regulations coming
into effect, there is a need to
forge partnership among the
key stakeholders which include
insurance companies, MFPs,
donors and branchless banking
providers. Technology providers
can play an important role as
the ticket size is small but the
numbers can grow exponentially
by harnessing technology.
Examples of using technology
to deliver micro-insurance
products include Trustco Mobile
from Zimbabwe which launched
life insurance in 2010 and
currently has more than two
million subscribers. Another
cellular operator Tigo in Ghana
launched health insurance in
collaboration with MicroEnsure
in 2011 and is adding 4,500
clients per day. Pakistan, where
there are now eight branchless
banking providers operating,
can be another market where
insurance outreach can be
expanded rapidly in short span
of time. Donors can play an
important role here by stimulating
innovation and experimentation
through apportionment of their
development resources to support
programs in health and livelihood
initiatives, augmented by microinsurance.
Key challenges being faced by
micro-insurance are highlighted in
the Box 3.1.
Box 3.1: Challenges to Micro-insurance
The micro-insurance sector of Pakistan is still in its nascent stages and promising efforts
are being made by various stakeholders for its uplift. Though the sector has undergone
decent growth since its take off, it has not achieved the desired momentum the micro
segment offers.
The primary challenge faced by the industry is the lack of innovative products by insurance
companies. In order to fully utilize the potential of the micro-insurance market mainstream
insurance companies need to structure products that would cater to the requirements of the
low income segment. Insurance companies are primarily relying on life and health insurance
products in the micro-insurance segment which generate high margins.
The lack of innovation in products can be attributed to the fact that insurance companies
are not very informed of the dynamics of the low segment market and prefer to position
themselves in the higher end of the market. Hence, the insurance industry needs to be
encouraged to understand the market potential and should devout its resources towards
market analysis.
On the other hand, the reluctance to expand in this market by insurance companies
can be attributed to the high illiteracy rate of the target population and the unfamiliarity
with insurance concepts, relatively high costs of operation and lack of actuarial data.
Insurance companies reinsure their portfolios through reinsurance firms which are largely
multinationals. However, most of these multinationals do not have much knowledge of the
micro-insurance market and hence are less willing to reinsure products of the insurance
companies.
Insurance companies will have to address these challenges in order to gain a footing in
the micro-insurance industry. Their primary focus should be on market insight and analytics,
whereas, they also need to develop the capacity to design products tailored to meet the
requirements of the low income segment. Nevertheless, the absence of innovative product
offerings from mainstream insurance companies provides an opportunity for new businesses
to operate in this segment.
55
FINANCING LOW COST PRIVATE SCHOOLS (LCPS) THROUGH MICROFINANCE
A recent initiative taken by
several MFPs has been to develop
sector-specific credit options
for Low Cost Private Schools
(LCPS), based on evidence of the
increasing financing demands
of this rapidly expanding
sector. According to a study
commissioned by the United
Kingdom’s Department for
International Development (DFID),
the sector’s funding appetite
exceeds PKR 77 billion for over
70,000 low cost private schools
currently operating in the country.
The amount and sources of initial
investment for these existing
schools are typical of the SME
sector, with a substantial number
of low cost private schools having
initial investments of less than
PKR 300. This initial investment
amount falls within the revised
guidelines for enterprise lending
set up by the State Bank of
Pakistan (SBP), which allow
MFBs to lend up to PKR 500K
(previously PKR 150K). Returns on
investments are projected to be
fairly high given the steady growth
in enrolment rates and low-cost
strategies employed by the LCPS
sector. Moreover, the sector
represents a rapidly growing
market, with the number of
private schools having increased
10 fold in the past decade,
primarily in Punjab and Sindh.
In 2013, the Pakistan Poverty
Alleviation Fund (PPAF) supported
the provision of a microcredit
product for low cost private
schools through one of its
partner organizations - Kashf
Foundation. While this pilot was
centered in urban areas, the PPAF
plans to up-scale the product to
more rural areas, particularly in
South Punjab, through multiple
partner organizations. In Kashf
56
Foundation, loans are tied to
technical support in the form
of curriculum development,
capacity building workshops for
school-owners, teacher trainings
and other monitoring support to
ensure improvements in overall
quality of education provided
by these schools. Tameer
Microfinance Bank Ltd. (TMFB)
also piloted a specific product
for LCPS, which includes product
parameters for ‘clean’ loans as
well as collateral-backed loans of
up to PKR 150K for LCPS owners
with relevant asset ownership
(school property, gold, term
deposit certificates etc).
In 2014, several MFPs
including Kashf Foundation, First
Microfinance Bank Ltd (FMFB)
and Khushhali Bank Ltd (KBL)
began piloting a LCPS-specific
microcredit product based a
financial model proposed by the
DFID-commissioned study (see
above). The model proposes loan
amounts to be calculated on the
basis of key variables including
school fees, student teacher ratio
(STR) and status of school building
ownership; while other prevalent
product features include a loan
tenure of 12 to 24 months, a grace
period of three months to allow
the school to acquire relevant
resources (equipment, staff and
so on) for expansion and/or
improvement, and an effective
interest rate (IR) of 27 percent.
While the model features comply
with existing SBP regulations, they
also call for greater investments
from MFPs and perhaps flexibility
on SBP enterprise definitions
vis-à-vis number of employees
 particularly for experienced
enterprise owners with the
capacity and willingness to
expand.
In terms of the regulatory
framework, there have been some
important developments, such
as the revision of loan amount
ceilings, allowing MFBs to be
innovative in reaching out to
new sectors. At the same time,
guarantee schemes have been set
up to encourage MFBs for onward
lending, particularly to micro- and
small-enterprises. The burgeoning
LCPS sector in Pakistan holds
enormous opportunities in
this regard. There is potential
for donors to support a market
based approach in which school
owners are vested in improving
the quality and scale of education
provision tied to microfinance
loans.
FUNDING
Exhibit 3.4: Comparison of Subsidized Lending and
Commercial Lending
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2011
2010
2012
Subsidized Debt-to-Total Debt
2013
Commercial Debt-to-Total Debt
40%
Mobile Money Penetration
35%
30%
25%
20%
15%
10%
5%
0%
Pakistan
Uganda
However, over the past few
years, the sector has witnessed
a visible change in the funding
landscape; an increasing number
of microfinance providers are
shifting towards commercial
sources of funding rather than
relying on subsidized financing
from donors or the national apex.
On a sector level, the share of
commercial debt to total liabilities
has been continuously rising
and has surpassed the share of
subsidized lending (Exhibit 3.4).
Guarantee funds continue to
play a vital role in facilitating MFPs
to access funds from commercial
banks. Recent availability to MFBs
of Credit Guarantee Scheme for
Small and Marginalized farmers
which provides guarantee to
lenders up to 50 percent in case
of default provides an opportunity
to expand credit outreach in rural
areas. Similarly access to low
cost housing guarantee scheme
which covers up to 40 of lender’s
exposure allows for MFBs to enter
into low cost housing market.
Exhibit 3.5: Use of Mobile Accounts
One m-money user in the household
The microfinance sector of
Pakistan started off with complete
reliance on grants and subsidized
debt to meet its funding
requirements. With the growth of
the sector, the funding sources
have become diversified and the
sector is currently being funded
by a combination of commercial
debt, subsidized debt, deposits (in
case of MFBs) and debt obtained
under the guarantee facilities.
Tanzania
One registered m-money user in the household
On an institutional level, MFPs
are continuously working to
improve their credibility among
commercial financial institutions
by forming strong corporate
governance structures, enhancing
transparency and strengthening
internal controls.
57
Moving ahead, we expect the
funding landscape to further
improve as international lenders
have started to take interest in
Pakistan and are seeing Pakistan
as an attractive debt market. In
the current year, representatives
of BlueOrchard Microfinance
Fund and ResponsAbility Global
Microfinance Fund explored the
Pakistan microfinance sector and
showed keen interest in future
ventures. Similarly, ECO Trade
And Development Bank has
successfully invested USD 7.5
million (debt financing) in NRSP
Bank and is currently finalizing a
similar deal with another leading
institution.
Box 3.2: Enterprise and Asset Growth Programme (EAGR)
Department for International Development (DFID) UK has launched an initiative
Enterprise and Asset Growth (EAGR) for Pakistan which will help unlock the potential of
small entrepreneurs and businesses to drive growth, employment and trade; and address the
particular needs of women and young people as entrepreneurs and job seekers.
DFID will provide a grant of up to £75.7 million from 2013/14 to 2023/24 to the
Enterprise and Asset Growth Programme (EAGR), through a newly established Special
Purpose Vehicle (SPV). EAGR will comprise of two primary components; Recyclable Capital
and Capacity Building. The bulk of funding (£40 million) will support a range of financial
institutions through ‘recyclable capital’ instruments to finance small and growing businesses
(SGBs). This will enable them to grow and, in doing so, create jobs for the poor who then can
build their assets.
The remaining funds (£35.7 million) will be used to build the capacity of financial and
non-financial service providers; provide funding to commercial and financial intermediaries to
develop innovative products, services and delivery channels; and develop a robust mechanist
for monitoring, evaluation and impact assessment, as well as, research and knowledge
management.
The biggest challenge
international investors come
across while investing in Pakistan
is the hedging cost; foreign loans
need to be converted into local
currency (PKR) and are hence
exposed to foreign exchange rate
risk. Hedging solutions exist but
due to high country risk premium
lead to increase the borrowing
costs for MFPs.
Deposit mobilization is the
main source of financing for
microfinance banks and at an
average, more than 70percent of
MFBs funding requirements are
met through deposits. Deposit
growth in the current year did
not lose pace and hovered
around 50percent as depicted in
Exhibit 3.5. It is important to note
that the increase is deposits is
primarily driven by two to three
large MFBs which constitute more
than 70 percent of the sectors
deposit base. The growth in MFB
deposits comes at a cost of high
interest rates; MFBs pay a higher
interest rate on their deposits as
compared to commercial banks,
whereas, deposit concentration
is skewed towards institutional
deposits within large firms which
demand high returns.
58
In addition, other international and Pakistani partners are expected to invest approximately
£200m in grant and commercial funds. In particular, the Bill and Melinda Gates Foundation
(BMGF) will provide US$15m (equivalent £9.3m) to support a Digital Financial Inclusion
Centre, bringing the total value of the programme to £85m. Contingent on a successful
startup and robust reviews of demand, DFID may consider up scaling its current level of
funding from £75.7m to £200m. The additional funding is likely to be on returnable basis to
DFID.
In order to bring down the
cost of deposits, MFBs need
focus on current and saving
accounts (CASA), which in turn
would require clearing house
memberships, access to ATMs and
innovative products relevant to
micro-depositors.
Going forward, the sector is
expected to see a rise in debt
financing with very less or no
growth in equity financing. Equity
financing has not been successful
in the Pakistan microfinance
sector, especially among MFI’s
who do not fall under any
regulatory framework. However,
only a handful of MFBs have
been subject to equity financing
transactions, with the most recent
taking place in 2013 - Kashf
Microfinance Bank had been
acquired by FINCA to form FINCA
Microfinance Bank.
Due to the high costs of
deposits, MFBs will be exploring
other cheaper financing options
to fund their portfolio’s which will
include debt financing (local and
international), issuance of bonds
and term finance certificates.
The industry will continue
to get donor assistance in
obtaining financing from financial
institutions similar to previous
programs like Financial Inclusion
Program (FIP) and IFAD’s PRISM.
One such program is being
launched is Enterprise and Asset
Growth Program (EAGR) which is
being funded by DFID (see Box
3.2).
PPAF SPINOFF
The microfinance sector in Pakistan has evolved
significantly over the past decade. The early stage growth
phase is over and the industry has matured. Expanding
financial inclusion requires more sophisticated approaches
and strategies than those used in the past, and many
microfinance providers (MFPs) now have the operational
and managerial strength to achieve this. Given the
needs of the Microfinance sector, keeping in mind the
evolving nature of the industry, PPAF decided to spin-off
the Financial Services Group into a new independent
Microfinance Apex entity that will spur a resurgence of high
quality growth of the microfinance sector, and substantially
increase financial sector penetration for poor households
and microenterprises. This decision has been endorsed
by many stakeholders including the Donors, GoP and SBP.
PPAF’s partner organizations (POs) have also expressed
their support and heralded the decision as a necessary
step to remove bottlenecks and constraints of the sector
while increasing its robustness.
To achieve this, PPAF commissioned a consultancy
to guide the management through the process. An
international firm of high repute was hired to undertake
this assignment. After conducting a rigorous analysis of
Pakistan’s microfinance market, the firm has suggested
spin-off of PPAF’s microfinance department into an
independent for profit entity in order to support the next
phase of growth. PPAF is prepared to brave all challenges
and ensure the provision of holistic and inclusive financial
services to the needful across the nation. Going forward,
there is little question that the microfinance wholesaling
unit of PPAF will retain its role as the lead sector developer,
acting as a guide and driver to the entire industry,
propagating growth and strengthening product quality and
the governance of MFPs.
59
DISASTER RISK MANAGEMENT
Since 2005, Pakistan has faced multiple
disasters. These include earthquake in 2005,
IDP crisis in 2009 and floods in 2010 & 2011.
The impact of these events on the microfinance
sector is summarized in the Exhibit 3.6 below.
The hardest hit by these disasters are the
lower income strata. This segment of population
is the same as the one targeted by microfinance
industry resulting in large losses to MFPs. With
small capital base, MFPs have little capacity to
absorb these losses leading to liquidity issues.
Moreover, as microfinance is a double bottom
line industry which tries to balance the social
and financial bottom lines, pursuing recoveries
from calamity stricken borrowers can create
political and reputation risk.
In order to mitigate disaster risk effectively,
multifaceted efforts are needed. It requires
efforts on client, MFP and industry level.
Clients can be secured by extending microinsurance products coupled with micro-saving
options. At meso level, MFPs need to diversify
geographically and product wise. In addition,
there is a need to increase their equity to have
cushion to absorb losses. MFPs located in
disaster prone areas need to be better prepared
for disasters by having necessary contingency
plans in place (see Exhibit 3.7).
At sector level, the SBP through its Micro
Finance Consultative Group and its subcommittees is already exploring options for the
sector. These include setting up a dedicated
disaster fund for the sector and amending
existing government backed insurance schemes
for agriculture and livestock to meet needs of
MFPs. However, there is a need to expand the
government schemes like Crop Life Insurance
Scheme (CLIS) and Livestock Insurance to cover
entire sector and just not MFBs. However, issues
remain in their implementation. In addition,
instead of insuring borrowers these schemes
should be targeted towards insuring the
portfolios of the MFPs.
60
Exhibit 3.6: Losses due to Natural Disasters
Earthquake
2005
IDP Crisis
2009
Floods
2010
Sindh Rains
2011
Struck AJK and KPK the hardest; 3 districts affected
73,000 people killed
Caused damages amounting to PKR 265 billion (US$5.2
billion)
Microfinance portfolio worth PKR38 million affected
5 district s & 2 agencies affected
PKR 97 billion (US $1.1 billion) in damages
Microfinance portfolio worth PKR 200 million affected
60 districts affected
20 million people affected, with over 1,980 reported deaths
and nearly 2,946 injured and 1.6 million rendered homeless
Microfinance portfolio worth PKR 2.6 billion affected
PKR 34 million worth of microfinance infrastructure damaged
60 districts affected
20 million people affected, with over 1,980 reported deaths
and nearly 2,946 injured and 1.6 million rendered homeless
Microfinance portfolio worth PKR 2.6 billion affected
PKR 34 million worth of microfinance infrastructure damaged
Exhibit 3.7: Meso Level
Disaster Risk Mitigation
Product
Diversification
Disaster
Preparedness
Geographical
Spread
High
Equity
61
ANNEXURES
ANNEXURE A-1
PERFORMANCE INDICATORS
INDUSTRY AGGREGATE (2007-12)
INFRASTRUCTURE
2008*
Total assets (PKR 000)
2009**
2010**
2011**
33,193,784
30,473,198
35,826,211
48,569,411
61,928,036
81,557,894
1,277
1,221
1,405
1,550
1,630
1,606
11,499
11,557
12,005
14,202
15,153
17,456
45.2%
-8.2%
17.6%
35.6%
27.5%
31.7%
9.6%
-4.4%
15.1%
10.3%
5.2%
-1.5%
20.7%
0.5%
3.9%
18.3%
6.7%
15.2%
Branches (including Head Office)
Total staff
2012
2013
GROWTH RATE
Total assets
Total staff
* Includes KF data, ** Without KF data
FINANCING STRUCTURE
2008*
2009**
2010**
2011**
2012
2013
33,193,784
30,473,198
35,826,211
48,569,411
61,928,036
81,557,894
Total equity (PKR 000)
8,018,344
7,297,847
8,359,260
10,314,307
11,679,373
17,049,706
Total debt (PKR 000)
25,175,440
23,175,352
27,466,951
38,255,104
25,876,598
26,913,359
Commercial liabilities (PKR 000)
6,252,075
2,577,741
4,910,265
12,332,456
19,361,179
21,662,200
Deposits (PKR 000)***
4,111,730
7,161,634
10,132,332
13,908,759
20,840,990
32,925,558
20,001,190
16,757,846
20,295,915
24,854,747
33,877,284
46,613,582
Equity-to-asset ratio
24.2%
23.9%
23.3%
21.2%
18.9%
20.9%
Commercial liabilities-to-total debt
24.8%
11.1%
17.9%
32.2%
74.8%
80.5%
3.14
3.18
3.29
3.41
2.22
1.58
Deposits-to-gross loan portfolio
20.6%
42.7%
49.9%
56.0%
61.5%
70.6%
Deposits-to-total assets
12.4%
23.5%
28.3%
28.6%
33.7%
40.4%
Gross loan portfolio-to-total
assets
60.3%
55.0%
56.7%
51.2%
54.7%
57.2%
Gross loan portfolio (PKR 000)
RATIOS
Debt-to-equity ratio
Includes KF data, * Without KF data, ** Only MFB deposits included
64
OUTREACH
2008*
Active borrowers
Active women borrowers
Annual per capita income (PKR)***
Number of loans outstanding
1,695,421
2009**
1,409,657
2010**
1,567,355
2011**
1,661,902
2012
2013
2,040,518
2,392,874
803,795
643,392
811,520
917,058
1,275,387
1,442,197
20,001,190
16,757,846
20,295,915
24,854,747
33,877,284
46,613,582
81,000
86,000
105,300
107,505
118,085
143,808
1,791,688
1,409,657
1,547,197
1,661,902
2,040,518
2,401,849
Depositors****
248,842
463,361
764,271
1,332,705
1,730,823
2,150,675
Number of deposit accounts
248,842
463,361
764,271
1,332,705
1,730,823
2,998,641
Number of women depositors
44,081
78,427
64,159
259,104
334,994
837,144
4,111,730
7,161,634
10,132,332
13,908,759
20,840,990
32,925,559
47.4%
45.6%
51.8%
55.2%
62.5%
60.3%
Average loan balance per active
borrower (PKR)
11,797
11,888
12,949
14,956
16,602
19,480
Average loan balance per active
borrower/per capita income
13.78%
13.8%
12.3%
13.9%
14.1%
13.5%
Average outstanding loan balance
(PKR)
11,163
11,888
13,118
14,956
16,602
19,407
Average outstanding loan balance
/ per capita income
13.8%
13.8%
12.5%
13.9%
14.1%
13.5%
Proportion of active women
depositors (%)
17.7%
16.9%
8.4%
19.4%
19.4%
38.92%
Average saving balance per active
depositor (PKR)
16,523
15,456
13,258
10,436
12,041
15,309
Active deposit account balance
(PKR)
16,523
15,456
13,258
10,436
12,041
10,980
Deposits outstanding
Proportion of active women
borrowers (%)
* Includes KF data
** Without KF data
*** Source: http://www.sbp.org.pk/reports/stat_reviews/Bulletin/2012/Feb/EconomicGrowth.pdf
**** Only MFB deposits included
65
FINANCIAL PERFORMANCE
2008*
2009*
4,202,506
4,352,648
6,122,154
7,998,956
10,040,720
13,542,893
Income from investments
831,602
1,087,106
870,809
1,203,306
1,774,610
1,742,975
Income from other sources
80,552
975,335
528,457
899,713
816,461
2,093,035
5,114,660
6,415,089
7,521,420
10,101,975
12,631,792
17,378,903
Income from loan portfolio
Total revenue
2010**
2011**
2012
2013
Less : financial expense
1,556,375
1,820,037
2,016,795
2,905,049
3,974,467
4,767,589
Gross financial margin
3,558,285
4,595,052
5,504,624
7,196,926
8,657,325
12,611,314
Less: loan loss provision
expense
1,440,324
408,684
745,660
623,988
643,991
658,812
Net financial margin
2,117,962
4,186,368
4,758,964
6,572,938
8,013,334
11,952,503
1,828,726
2,186,177
2,819,891
3,345,284
3,784,676
5,032,342
Personnel expense
Admin expense
1,507,667
1,719,283
1,961,816
2,446,750
2,886,025
3,880,920
Other expense
3,336,393
3,905,460
4,781,707
5,792,035
1,342,633
8,913,262
257,651
380,993
1,084,982
2,658,248
Less: operating expense
Net income before tax
(1,218,432)
Provision for tax
280,908
(22,742)
780,903
(1,001)
5,353
(7,047)
116,314
152,380
503,118
(1,217,431)
275,555
(15,696)
664,589
932,602
2,155,130
Adjusted Financial Expense on
Borrowings
242,377
87,767
-
372,524
205,943
181,422
Inflation Adjustment Expense
669,689
1,318,219
-
(3,073)
870
1,152
Adjusted Loan Loss Provision
Expense
11,699
-
-
357,688
49,456
18,743
Adjusted Operating Expense
923,765
1,405,987
-
727,138
256,270
201,317
Total Adjustment Expense
(2,141,195)
(1,889,736)
(15,696)
(62,549)
676,332
1,953,814
Net Income/(Loss) After
Adjustments
27,996,183
29,363,269
30,399,088
42,282,393
57,182,714
70,192,281
Average total assets
7,177,338
7,006,506
7,854,713
8,719,204
11,594,943
14,513,187
Average total equity
6,115,580
7,177,338
7,006,506
7,854,713
8,719,204
11,206,319
Adjusted return-on-assets
(7.6%+)
(3.3%)
(0.1%)
(0.1%)
1.2%
2.8%
Adjusted return-on-equity
Net income/(loss)
RATIOS
(29.8%)
(14%)
(0.2%)
(0.7%)
5.8%
13.5%
Operational self sufficiency (OSS)
80.8%
104.6%
99.7%
108.4%
109.4%
118.1%
Financial self sufficiency (FSS)
70.5%
86.8%
81.7%
100.5%
107.0%
116.5%
* Includes KF data, ** Without KF data
66
OPERATING INCOME
2008*
Revenue from loan portfolio
Total revenue
2009**
2010**
2011**
2012
2013
4,202,506
4,352,648
6,122,154
7,998,956
10,040,720
13,542,893
5,114,660
5,804,616
7,521,420
10,101,975
12,631,792
17,378,903
Adjusted net operating income
/ (loss)
(2,113,788)
(887,558)
(22,742)
5,252
828,712
2,456,931
27,996,183
29,363,269
30,399,088
42,282,393
57,182,714
70,192,281
Gross loan portfolio (opening
balance)
12,698,918
16,780,162
16,948,466
20,576,342
25,743,757
34,668,730
Gross loan portfolio (closing
balance)
20,001,190
16,757,846
20,295,915
24,854,747
33,877,284
46,105,712
Average gross loan portfolio
16,350,054
16,769,004
18,622,190
22,715,544
29,810,520
40,387,221
Inflation rate ***
12.0%
20.8%
15.0%
11.2%
10.4%
9.2%
Total revenue ratio (total revenueto-average total assets)
18.3%
19.8%
24.7%
23.9%
22.3%
24.8%
Adjusted profit margin (adjusted
profit/(loss)-to-total revenue)
(41.3%)
(24.6%)
(0.3%)
0.1%
7.0%
14.1%
Yield on gross portfolio (nominal)
25.7%
26.0%
32.9%
35.2%
34.2%
33.5%
Yield on gross portfolio (real)
12.2%
4.3%
15.5%
21.6%
21.6%
22.3%
* Includes KF data
** Without KF data
*** Source: http://www.sbp.org.pk/reports/stat_reviews/Bulletin/2012/Feb/IND.pdf
67
OPERATING EXPENSE
2008*
2009*
2010**
2011**
2012
2013
Adjusted total expense
7,228,448
7,454,381
7,544,162
10,096,723
11,803,080
14,540,979
Adjusted financial expense
2,440,032
3,140,237
2,016,795
3,304,504
4,181,281
4,950,162
Adjusted loan loss provision
expense
1,452,023
408,684
745,660
1,000,184
693,447
677,555
Adjusted operating expense
3,336,393
3,905,460
4,781,707
5,792,035
6,928,352
8,913,262
Adjustment expense
895,356
1,320,200
-
775,651
256,270
201,317
27,996,183
29,363,269
30,399,088
42,282,393
57,182,714
70,192,281
25.8%
25.4%
24.8%
23.9%
20.6%
20.7%
Adjusted financial expense-toaverage total assets
8.7%
10.7%
6.6%
7.8%
7.3%
7.1%
expense-to-average total assets
5.2%
1.4%
2.5%
2.4%
1.2%
1.0%
Adjusted operating expense-toaverage total assets
11.9%
13.3%
15.7%
13.7%
12.1%
12.7%
Adjusted personnel expense
6.5%
6.5%
9.3%
7.9%
6.6%
7.2%
Adjusted admin expense
5.4%
5.8%
6.5%
5.8%
5.0%
5.5%
Adjustment expense-to-average
total assets
3.2%
4.5%
0.0%
1.8%
0.4%
0.3%
RATIOS
Adjusted total expense-toaverage total assets
* Includes KF data
** Without KF data
68
OPERATING EFFICIENCY
2008*
2009**
2010**
2011**
2012
2013
Adjusted operating expense (PKR
000)
3,336,393
3,905,460
4,781,707
5,792,035
6,928,352
8,913,262
Adjusted personnel expense (PKR
000)
1,828,726
2,186,177
2,819,891
3,345,284
3,784,676
5,032,342
Average gross loan portfolio (PKR
000)
16,350,054
16,769,004
18,622,190
22,715,544
29,810,520
40,387,221
Average number of active
borrowers
1,685,382
1,387,670
1,567,355
1,661,902
2,040,518
2,350,650
Average number of active loans
1,635,342
1,423,467
1,567,355
1,661,902
2,040,518
2,359,625
Adjusted operating expense-toaverage gross loan portfolio
20.4%
23.3%
25.7%
25.5%
23.2%
22.1%
Adjusted personnel expense-toaverage gross loan portfolio
11.2%
13.0%
15.1%
14.7%
12.7%
12.5%
2.0
2.20
2.23
2.19
2.12
2.0
Adjusted cost per borrower (PKR)
2,000
2,814
3,051
3,485
3,395
3,792
Adjusted cost per loan (PKR)
2,000
2,744
3,051
3,485
3,395
3,777
Average salary/gross domestic
product per capita
* Includes KF data
** Without KF data
69
Figures in PKR ‘000
PRODUCTIVITY
2008*
2009*
2010**
Number of active borrowers
1,695,421
1,399,239
1,567,355
Number of active loans
2011**
2012
2013
1,661,902
2,040,518
2,255,126
1,791,688
1,399,239
1,567,355
1,661,902
2,040,518
2,263,432
Number of active depositors
248,842
463,361
764,271
1,332,705
1,730,823
1,897,872
248,842
463,361
764,271
1,332,705
1,730,823
2,707,872
11,499
11,441
12,005
14,202
15,153
15,673
6,916
6,619
5,148
7,165
7,541
6,892
Borrowers per staff
147
122
131
117
135
144
Loans per staff
156
122
131
117
135
144
Borrowers per loan officer
245
211
304
232
271
327
Loans per loan officer
Total staff
Total loan officers
259
211
304
232
271
328
22
41
64
94
114
121
Deposit accounts per staff
22
41
64
94
114
173
60.1%
57.9%
42.9%
50.5%
49.8%
44.0%
* Includes KF data
** Without KF data
70
RISK
2008*
Portfolio at risk > 30 days
2009*
2010**
2011**
2012
2013
426,693
578,032
829,314
793,966
1,232,842
1,157,297
190,350
318,824
577,972
516,623
1,020,316
932,166
Adjusted loan loss reserve
1,680,846
477,785
733,338
623,988
759,621
708,355
299,986
602,421
335,463
592,429
675,835
615,293
Gross loan portfolio
20,001,190
16,757,846
20,295,915
24,854,747
33,877,284
46,105,712
16,350,054
16,769,004
18,622,190
22,715,544
29,810,520
40,387,221
Portfolio at risk (>30)-to-gross
loan portfolio
2.1%
3.4%
4.1%
3.2%
3.6%
2.5%
Portfolio at risk(>90)-to-gross
loan portfolio
1.0%
1.9%
2.8%
2.1%
3.0%
2.0%
Write off-to-average gross loan
portfolio
1.8%
3.6%
1.8%
2.6%
2.3%
1.5%
393.9%
82.7%
88.4%
78.6%
61.6%
61.2%
Loan written off during year
Risk coverage ratio (adjusted loan
loss reserve-to-portfolio at risk
>30days)
* Includes KF data
** Without KF data
71
ANNEXURE A-2
PERFORMANCE INDICATORS
INDUSTRY AGGREGATE (2008-13)
INFRASTRUCTURE
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
AMFB
U-Bank
Sub
MFB
879,096
9,514,042
9,804,015
3,978,864
1,313,383
1,381,510
55,351,266
Total equity (PKR
000)
2,752,488
2,209,425
818,771
1,102,062
1,390,741
1,104,539
517,041
1,038,817
10,933,884
10,537,169
12,981,274
60,325
8,411,980
8,413,274
2,874,325
796,341
342,693
44,417,381
110
49
16
87
54
34
11
17
378
2,293
2,198
182
1,122
1,247
797
209
250
8,298
Branches
(including Head
Office)
OPP
Personnel
19
760,569
549,945
22
248
210,624
21
256,247
212,962
8
55
43,285
14
95,835
25,620
5
51
70,215
22
530,418
313,823
15
168
216,596
6
1,344,310
1,370,566
86
996
(26,256)
5
1,965,726
1,155,419
150
918
810,308
10
220,108
203,135
15
118
16,972
18
342,579
39,160
10
72
303,419
13
599,456
416,710
16
155
182,746
17
1,052,178
847,369
20
193
204,809
19
547,480
401,397
22
254
146,083
17
4,580,527
4,479,533
174
Personnel
72
1,858
289,778
97
Total liabilities (PKR 000)
21
100,994
394,805
Age
684,583
29
MFI
Continued in next table...
Total liabilities
(PKR 000)
RCDS
15,190,699
ORIX
13,289,657
Sungi
Total assets (PKR
000)
JWS
1
BRAC-P
9
ASA-P
6
FFO
12
GBTI
12
CSC
12
DAMEN
12
SAFCO
12
KASHF
Age
Sub
VDO
SVDP
SRDO
SDS
OPD
NRDP
Naymet
Mojaz
MO
AMRDO
Agahe
INFRASTRUCTURE
NRSP
PRSP
SRSO
13,465,419
10
61,539
2,535,261
10,930,15
602
5,613
60,558
3
20
981
13
130,834
95,564
3
40
35,270
13
70,213
7,167
63,046
2
61,748
8,856
52,891
4
24
TRDP
18
10
22
105,576
14,304
91,273
4
39,101
119,394
10
107
SRSP
38
22
158,494
9
10,707
9,347
1,360
6
18
6
223,038
168,691
9
139
54,346
5
85,281
61,738
2
19
23,543
7
136,227
12
Personnel
79
63,777
4
25
20,127
178,651
83,904
Age
42,424
10
MFI
Sub
RSP
Age
20
15
22
16
10
7,326,662
2,834,223
45,445
1,312,215
1,222,664
12,741,209
1,972,609
1,112,572
28,445
253,571
213,363
3,580,560
5,354,053
1,721,651
17,000
1,058,644
1,009,301
9,160,649
Branches (including Head
Office)
470
19
6
80
51
626
2,202
617
19
389
318
3,545
Personnel
73
INFRASTRUCTURE
MFB Sub
MFI Sub
RSP Sub
Total
Age
Total assets (PKR
000)
55,351,266
13,465,419
12,741,209
81,557,894
Total equity (PKR
000)
10,933,884
2,535,261
3,580,560
17,049,706
Total liabilities
(PKR 000)
44,417,381
10,930,158
9,160,649
64,508,189
378
602
626
1,606
8,298
5,613
3,545
17,456
Branches
(including Head
Office)
Personnel
MFB Sub
MFI Sub
RSP Sub
Total
Age
55,351,266
13,465,419
12,741,209
81,557,894
10,933,884
2,535,261
3,580,560
17,049,706
44,417,381
10,930,158
9,160,649
Branches (including Head
Office)
64,508,189
378
602
626
1,606
8,298
5,613
3,545
17,456
Personnel
74
*Below market rate
Gross loan portfolio-to-total assets
Cost of funds
66.7%
6.2%
53.7%
1.0
80.5%
7.3%
20.7%
8,859,405
10,537,169
Total liabilities
7,132,919
Total deposits
200,000
- Commercial debt
2,746,106
Total debt
2,546,106
2,752,488
Total equity
- Subsidised debt*
13,289,657
Total assets
MFB
KBL
54.8%
8.5%
70.0%
127.6%
0.7
100.0%
14.5%
8,331,554
12,981,274
10,627,546
1,491,036
-
1,491,036
2,209,425
15,190,699
TMFB
13.4%
1.2%
3.3%
24.4%
0.0
0.0%
93.1%
117,931
60,325
28,730
-
-
-
818,771
879,096
POMFB
36.8%
6.4%
82.1%
223.3%
0.3
100.0%
11.6%
3,499,317
8,411,980
7,814,981
296,042
-
296,042
1,102,062
9,514,042
FMFB
49.4%
7.6%
36.9%
74.7%
3.2
100.0%
14.2%
4,845,000
8,413,274
3,618,714
4,457,250
-
4,457,250
1,390,741
9,804,015
NRSP-B
51.2%
7.8%
68.7%
134.4%
0.0
0.0%
27.8%
2,036,069
2,874,325
2,735,464
-
-
-
1,104,539
3,978,864
FINCA
26.0%
6.9%
58.0%
222.9%
0.0
0.0%
39.4%
341,838
796,341
762,026
-
-
-
517,041
1,313,383
AMFB
3.0%
0.6%
14.9%
495.8%
0.0
0.0%
75.2%
41,381
342,693
205,178
-
-
-
1,038,817
1,381,510
U-Bank
50.7%
7.3%
59.5%
117.3%
0.8
71.7%
19.8%
Weighted
Avg.
28,072,495
44,417,381
32,925,558
6,444,328
2,546,106
8,990,434
10,933,884
55,351,266
Sub
Figures in PKR ‘000
FINANCING STRUCTURE
75
Cost of funds
8.1%
11.3%
9.5%
10.9%
7.2%
5.6%
6.0%
5.3%
7.1%
9.3%
11.9%
7.3%
9.2%
74.2%
77.4%
75.6%
71.3%
49.0%
14.8%
56.9%
96.5%
65.8%
60.2%
93.5%
91.2%
58.5%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
76
2.5
4.9
0.3
1.4
-35.6
1.3
11.3
0.1
2.2
4.1
2.6
29.6%
0.0%
100.0%
13.2%
93.7%
86.4%
48.3%
0.0%
18.0%
100.0%
0.0%
27.7%
16.9%
73.3%
40.8%
-2.0%
41.2%
7.7%
88.6%
30.5%
19.5%
26.7%
2.2%
Weighted
Avg.
99.2%
444,610
233,715
89,582
319,169
884,295
1,896,801
125,333
50,763
293,493
750,530
413,875
3,543,155
Total liabilities
41.6
549,945
212,962
25,620
313,823
1,370,566
1,155,419
203,135
39,160
416,710
847,369
401,397
4,479,533
Total deposits
-
-
-
-
-
-
-
-
-
-
-
-
-
153,454
-
18,000
40,436
875,026
900,828
92,399
-
72,188
842,891
-
4,169,141
163,349
- Commercial debt
289,778
365,208
210,663
-
265,225
58,392
141,315
98,893
27,288
328,545
-
379,601
33,921
91,600
- Subsidised debt*
507,870
518,662
210,663
18,000
305,661
933,418
1,042,143
191,292
27,288
400,733
842,891
379,601
4,203,062
254,949
Total debt
57.7%
760,569
256,247
95,835
530,418
1,344,310
1,965,726
220,108
342,579
599,456
1,052,178
547,480
4,580,527
684,583
210,624
43,285
70,215
216,596
(26,256)
810,308
16,972
303,419
182,746
204,809
146,083
100,994
394,805
Total equity
64.1%
Total assets
0.6
RCDS
ORIX
Sungi
JWS
BRAC-P
ASA-P
FFO
GBTI
CSC
DAMEN
SAFCO
KASHF
OPP
FINANCING STRUCTURE
MFI
Cost of funds
9.6%
6.9%
7.3%
4.0%
0.0%
7.5%
10.2%
4.4%
5.8%
5.3%
8.1%
9.2%
52.1%
43.7%
75.1%
35.2%
88.8%
50.9%
50.6%
37.1%
64.5%
56.9%
79.9%
75.4%
*Below market rate
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3.91
51.1
2.5
8.3
5.0
6.0
2.9
0.0
2.7
2.5
2.8
75.6%
100.0%
0.0%
19.8%
21.0%
0.0%
100.0%
0.0%
11.3%
100.0%
0.0%
18.8%
1.6%
27.0%
10.2%
14.3%
13.5%
24.7%
87.3%
24.4%
27.6%
23.7%
Weighted
Avg.
10,153,084
49,194
74,448
45,264
22,907
53,404
80,606
9,511
78,601
64,083
78,150
10,930,158
60,558
95,564
63,046
52,891
91,273
119,394
1,360
168,691
61,738
136,227
-
-
-
-
-
-
-
-
-
-
-
-
7,485,545
50,145
-
11,794
9,248
-
112,891
-
16,621
58,949
-
61,533
-
2,416,753
-
88,725
47,625
34,793
86,128
-
-
130,160
-
120,272
- Subsidised debt*
-
-
-
63,777
Total liabilities
43,725
Total deposits
24.0%
- Commercial debt
100.0%
9,902,297
50,145
88,725
59,419
44,041
86,128
112,891
-
146,781
58,949
120,272
61,533
Total debt
3.1
2,535,261
981
35,270
7,167
8,856
14,304
39,101
9,347
54,346
23,543
42,424
20,127
Total equity
-
-
13,465,419
61,539
130,834
70,213
61,748
105,576
158,494
10,707
223,038
85,281
178,651
83,904
Total assets
-
-
Sub
VDO
SVDP
SRDO
SDS
OPD
NRDP
Naymet
Mojaz
MO
AMRDO
Agahe
FINANCING STRUCTURE
MFI
77
FINANCING STRUCTURE
NRSP
PRSP
SRSP
TRDP
SRSO
Total assets
7,326,662
2,834,223
Total equity
1,972,609
Total debt
5,017,919
- Subsidised debt*
- Commercial debt
Sub
45,445
1,312,215
1,222,664
12,741,209
1,112,572
28,445
253,571
213,363
3,580,560
1,023,375
15,000
976,033
988,300
8,020,628
-
-
-
-
288,300
288,300
7,732,328
RSP
5,017,919
1,023,375
15,000
976,033
700,000
Total deposits
-
-
-
-
-
-
Total liabilities
5,696,084
1,338,216
10,096
522,172
969,263
9,160,649
5,584,405
903,664
32,174
789,789
1,077,973
8,388,003
Weighted
Avg.
26.9%
39.3%
62.6%
19.3%
17.5%
28.1%
100.0%
100.0%
100.0%
100.0%
70.8%
96.4%
2.5
0.9
0.5
3.8
4.6
2.24
-
-
-
-
-
-
-
-
-
-
-
-
Cost of funds
10.6%
7.1%
14.0%
11.2%
11.1%
10.0%
76.2%
31.9%
70.8%
60.2%
88.2%
65.8%
*Below market rate
MFB Sub
MFI Sub
RSP Sub
Total
Total assets
55,351,266
13,465,419
12,741,209
81,557,894
Total equity
10,933,884
2,535,261
3,580,560
17,049,706
8,990,434
9,902,297
8,020,628
26,913,359
2,546,106
2,416,753
288,300
5,251,159
Total debt
- Subsidised debt*
6,444,328
7,485,545
7,732,328
21,662,200
Total deposits
- Commercial debt
32,925,558
-
-
32,925,558
Total liabilities
44,417,381
10,930,158
9,160,649
64,508,189
28,072,495
10,153,084
8,388,003
46,613,582
Weighted Avg.
Weighted Avg.
Weighted Avg.
Weighted Avg.
19.8%
18.8%
28.1%
20.9%
71.7%
75.6%
96.4%
80.5%
Cost of funds
78
0.8
3.91
2.24
1.58
117.3%
-
-
70.6%
59.5%
-
-
40.4%
7.3%
9.2%
10.0%
8.0%
50.7%
75.4%
65.8%
57.2%
OUTREACH
KBL
TMFB
POMFB
FMFB
Active borrowers
409,230
197,811
4,803
130,397
110,492
67,729
1,174
44,521
8,859,405
8,331,554
117,931
3,499,317
Annual per capita income (PKR)*
143,808
143,808
143,808
143,808
409,230
197,811
4,803
130,397
Depositors
674,061
833,313
18,735
263,437
674,061
1,643,313
18,735
263,437
166,787
568,429
5,103
72,672
7,132,919
10,627,547
28,730
7,814,981
Continued in next table..
MFB
Weighted
Avg.
Proportion of active women borrowers (%)
Average loan balance per active borrower (PKR)
Average loan balance per active borrower/per capita
income
Average outstanding loan balance (PKR)
27.0%
34.2%
24.4%
34.1%
21,649
42,119
24,554
26,836
15.1%
29.3%
17.1%
18.7%
21,649
42,119
24,554
26,836
Average outstanding loan balance / per capita income
15.1%
29.3%
17.1%
18.7%
Proportion of active women depositors (%)
24.7%
68.2%
27.2%
27.6%
Average saving balance per active depositor (PKR)
10,582
12,753
1,533
29,665
Active deposit account balance (PKR)
10,582
6,467
1,533
29,665
* http://www.sbp.org.pk/reports/stat_reviews/Bulletin/2012/Feb/EconomicGrowth.pdf
79
OUTREACH
NRSP-B
FINCA
AMFB
U-Bank
Sub
MFB
Active borrowers
171,718
39,078
8,606
1,220
962,863
23,291
1,922
2,941
80
252,150
4,845,000
2,036,069
341,838
41,381
28,072,495
143,808
143,808
143,808
143,808
143,808
171,718
39,692
8,606
1,220
963,477
Depositors
108,326
200,489
31,812
20,502
2,150,675
108,326
238,345
31,812
20,612
2,998,641
11,767
10,648
1,738
-
837,144
3,618,714
2,735,464
762,026
205,178
32,925,559
Weighted
Avg.
income
13.6%
4.9%
34.2%
6.6%
26.2%
28,215
52,103
39,721
33,919
29,155
19.6%
36.2%
27.6%
23.6%
20.3%
28,215
51,297
39,721
33,919
29,137
19.6%
35.7%
27.6%
23.6%
20.3%
10.9%
5.3%
5.5%
0.0%
38.9%
33,406
13,644
23,954
10,008
15,309
33,406
11,477
23,954
9,954
10,980
80
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9.7%
10.0%
5.8%
10.4%
10.9%
7.3%
8.1%
2.7%
11.0%
14.8%
7.4%
7.9%
14,019
14,319
8,396
14,968
15,690
10,562
11,656
3,862
15,798
21,331
10,677
11,350
income
-
9.7%
10.0%
5.8%
10.4%
10.9%
7.3%
8.1%
7.3%
11.0%
14.8%
7.4%
7.9%
-
14,019
14,319
8,396
14,968
15,690
10,562
11,656
10,495
15,798
21,331
10,677
11,350
-
91.8%
95.2%
100.0%
97.0%
96.7%
99.2%
98.8%
92.8%
100.0%
100.0%
48.0%
100.0%
Weighted
Avg.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25.0%
-
-
-
-
-
-
-
-
-
-
-
-
-
12,028
-
-
-
-
-
-
-
-
-
-
-
-
-
Depositors
8.4%
31,715
16,322
10,670
21,323
56,359
179,588
10,753
13,143
18,578
35,185
38,762
312,182
42,224
12,028
143,808
143,808
143,808
143,808
143,808
143,808
143,808
143,808
143,808
143,808
143,808
143,808
143,808
8.4%
444,610
233,715
89,582
319,169
884,295
1,896,801
125,333
50,763
293,493
750,530
413,875
3,543,155
507,870
-
31,715
16,322
10,670
21,323
56,359
179,588
10,753
4,837
18,578
35,185
38,762
312,182
42,224
29,101
15,546
10,670
20,686
54,497
178,121
10,619
4,489
18,578
35,185
18,606
312,182
10,556
-
Active borrowers
-
RCDS
ORIX
Sungi
JWS
BRAC-P
ASA-P
FFO
GBTI
CSC
DAMEN
SAFCO
KASHF
OPP
OUTREACH
MFI
81
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
82
8.5%
8.5%
14.6%
15.4%
4.4%
8.6%
11.7%
2.6%
11.9%
12,182
12,198
20,959
22,134
6,344
12,385
16,762
3,804
17,065
18,011
income
12.5%
9%
8.5%
14.6%
15.7%
4.4%
8.6%
11.7%
2.6%
11.9%
12.5%
5.5%
12,305
12,198
20,959
22,632
6,344
12,385
16,797
3,804
17,065
18,011
7,957
7,957
90.2%
52.3%
37.1%
31.5%
43.3%
65.7%
58.2%
52.0%
56.9%
45.4%
48.9%
Weighted
Avg.
5.5%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Depositors
-
833,479
4,033
3,552
2,045
3,611
4,312
4,809
2,500
4,606
3,558
9,821
3,828
98.3%
143,808
143,808
143,808
143,808
143,808
143,808
143,808
143,808
143,808
143,808
143,808
143,808
11,423
10,153,084
49,194
74,448
45,264
22,907
53,404
80,606
9,511
78,601
64,083
78,150
43,725
7.9%
744,181
2,108
1,318
629
1,562
2,832
2,791
1,300
2,620
1,617
4,806
3,762
11,423
825,118
4,033
3,552
2,000
3,611
4,312
4,799
2,500
4,606
3,558
9,821
3,828
Active borrowers
7.9%
Sub
VDO
SVDP
SRDO
SDS
OPD
NRDP
Naymet
Mojaz
MO
AMRDO
Agahe
OUTREACH
MFI
OUTREACH
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
RSP
Activeborrowers
Activewomenborrowers
390,995
72,631
3,838
71,114
66,315
604,893
307,681
34,816
3,406
42,666
57,297
445,866
5,584,405
903,664
32,174
789,789
1,077,973
8,388,003
Annualpercapitaincome(PKR)*
143,808
143,808
143,808
143,808
143,808
143,808
Numberofloansoutstanding
Grossloanportfolio(PKR000)
390,995
72,631
3,838
71,114
66,315
604,893
Depositors
-
-
-
-
-
-
Numberofdepositaccounts
-
-
-
-
-
-
Numberofwomendepositors
-
-
-
-
-
-
Depositsoutstanding
-
-
-
-
-
-
Weighted
Avg.
Proportionofactivewomenborrowers(%)
Averageloanbalanceperactiveborrower(PKR)
Averageloanbalanceperactiveborrower/
percapitaincome
Averageoutstandingloanbalance(PKR)
Averageoutstandingloanbalance/percapitaincome
78.7%
47.9%
88.7%
60.0%
86.4%
73.7%
14,283
12,442
8,383
11,106
16,255
13,867
10%
9%
6%
8%
11%
10%
14,283
12,442
8,383
11,106
16,255
13,867
9.9%
8.7%
6%
8%
11.3%
9.6%
Proportionofactivewomendepositors(%)
-
-
-
-
-
-
Averagesavingbalanceperactivedepositor(PKR)
-
-
-
-
-
-
Activedepositaccountbalance(PKR)
-
-
-
-
-
-
83
OUTREACH
MFB Sub
Active borrowers
MFI Sub
962,863
RSPSub
825,118
Total
604,893
2,392,874
252,150
744,181
445,866
1,442,197
28,072,495
10,153,084
8,388,003
46,613,582
143,808
143,808
143,808
143,808
963,477
833,479
604,893
2,401,849
Depositors
2,150,675
-
-
2,150,675
2,998,641
-
-
2,998,641
837,144
-
-
837,144
32,925,559
-
-
32,925,559
Weighted Avg.
Weighted Avg.
Weighted Avg.
Weighted Avg.
26.2%
90.2%
73.7%
60.3%
29,155
12,305
13,867
19,480
20.3%
9%
10%
13.5%
29,137
12,182
13,867
19,407
20.3%
8.5%
9.6%
13.5%
38.9%
-
-
38.92%
15,309
-
-
15,309
10,980
-
-
10,980
income
84
KBL
TMFB
POMFB
FMFB
NRSP-B
2,455,172
2,308,861
36,415
1,116,445
1,517,624
139,485
352,037
66,078
331,189
190,609
267,508
804,483
4,986
58,510
69,755
2,862,166
3,465,381
107,479
1,506,144
1,777,989
Total revenue
Less: loan loss provision expense
615,348
1,035,159
332
518,283
617,778
2,246,818
2,430,222
107,148
987,861
1,160,211
169,123
11,390
20,986
124,759
65,522
2,077,695
2,418,832
86,162
863,102
1,094,690
Personnel expense
859,682
906,836
74,977
430,869
360,870
Admin expense
663,152
851,700
45,709
407,229
396,149
1,522,834
1,758,536
120,686
838,098
757,019
16,910
44,864
9,987
-
-
537,951
615,432
(44,511)
25,004
337,671
Provision for tax
174,754
233,677
(16,023)
(31,322)
93,423
Net income/(loss)
363,197
381,755
(28,489)
56,326
244,248
90,036
-
-
23,585
-
205
139
63
78
95
-
-
-
-
-
90,241
139
63
23,663
95
Other Non operating expense
Adjusted Financial Expense on Borrowings
Adjusted Loan Loss Provision Expense
Net Income/(Loss) After Adjustments
272,956
381,616
(28,552)
32,663
244,153
11,621,636
14,270,282
812,947
6,287,955
8,068,764
2,612,782
2,024,341
759,513
551,511
1,289,133
MFB
Weighted
Avg.
2.3%
2.7%
-3.5%
0.5%
3.0%
10.4%
18.9%
-3.8%
5.9%
18.9%
Financial expense ratio
8.4%
13.8%
0.3%
15.8%
15.6%
123.1%
121.6%
70.7%
101.7%
123.4%
118.5%
121.6%
70.7%
100.1%
123.4%
85
FINCA
AMFB
U-Bank
Sub
MFB
649,723
89,994
3,452
8,177,686
93,085
54,561
28,411
1,255,456
70,580
10,847
85,405
1,372,075
813,388
155,401
117,268
10,805,217
Total revenue
212,456
52,355
1,306
3,053,016
600,932
103,047
115,963
7,752,201
16,260
30,607
363
439,008
584,672
72,440
115,600
7,313,192
Personnel expense
311,737
64,830
119,265
3,129,066
Admin expense
278,066
59,730
99,123
2,800,858
589,803
124,560
218,388
5,929,924
-
-
-
71,761
(5,131)
(52,120)
(102,789)
1,311,507
Provision for tax
(6,511)
1,201
(57,727)
391,472
Net income/(loss)
1,380
(53,321)
(45,062)
920,035
-
-
-
113,621
-
24
205
809
-
-
-
-
-
24
205
114,430
1,380
(53,345)
(45,267)
805,605
2,566,064
1,064,100
1,247,296
45,939,046
552,412
413,240
1,061,348
9,264,281
Weighted
Avg.
0.1%
-5.0%
-3.6%
1.8%
0.2%
-12.9%
-4.3%
8.7%
13.3%
22.4%
6.2%
12.7%
99.4%
74.9%
53.3%
113.8%
99.4%
74.9%
53.2%
112.5%
86
OPP
KASHF
SAFCO
DAMEN
CSC
GBTI
FFO
60,052
1,072,131
115,549
259,611
115,908
13,282
31,494
12,888
4,667
88,295
6,160
28,854
10,711
26,560
1,124
63,370
14,548
4,125
1,482
39,722
19,584
77,607
1,223,797
136,257
292,590
128,101
79,564
52,202
20,682
474,183
35,964
91,522
28,887
1,539
11,542
56,926
749,614
100,293
201,068
99,214
78,026
40,660
8,085
3,858
8,379
35,521
4,870
139
3,612
48,840
745,756
91,914
165,547
94,344
77,887
37,048
Personnel expense
17,289
440,869
50,634
61,054
45,139
14,517
24,251
Admin expense
12,299
136,194
41,776
39,962
41,267
9,651
18,793
29,589
577,063
92,411
101,015
86,406
24,168
43,044
2,040
56,991
-
-
12
41,262
4,906
17,212
111,703
(497)
64,532
7,926
12,457
(10,902)
Total revenue
Provision for tax
-
-
-
-
-
-
-
Net income/(loss)
17,212
111,703
(497)
64,532
7,926
12,457
(10,902)
321
-
1,622
-
6,109
375
3,839
31
(31)
12
14
4
27
-
48,865
-
18,743
-
-
-
-
49,217
(31)
20,377
14
6,113
402
3,839
(32,005)
111,734
(20,874)
64,518
1,813
12,055
(14,741)
761,869
4,207,499
562,146
980,172
479,524
324,314
173,076
373,015
13,827
146,331
186,543
122,784
297,191
9,443
-4.2%
2.7%
-3.7%
6.6%
0.4%
3.7%
-8.5%
8.6%
808.1%
-14.3%
34.6%
1.5%
4.1%
-156.1%
0.1%
14.6%
9.5%
12.9%
11.5%
3.5%
0.7%
128.5%
110.0%
99.6%
128.3%
106.6%
118.6%
82.7%
70.8%
110.0%
86.7%
128.3%
101.4%
117.9%
78.0%
MFI
87
ASA-P
BRAC-P
JWS
Sungi
ORIX
RCDS
Agahe
710,791
363,217
109,461
29,385
63,911
157,556
11,670
6,048
120
6,610
821
-
20,859
-
10,208
270,717
14,355
50
2,284
2,301
3,006
727,046
634,054
130,426
30,256
66,195
180,717
14,676
Total revenue
54,834
65,822
28,516
2,140
15,360
47,879
5,933
672,212
568,232
101,910
28,115
50,835
132,838
8,743
31,013
55,311
8,232
418
14,619
3,251
-
641,200
512,921
93,678
27,698
36,216
129,586
8,743
Personnel expense
175,181
244,536
46,693
5,060
17,637
44,320
4,920
74,194
263,273
30,410
9,431
18,033
25,713
3,026
249,375
507,809
77,103
14,491
35,670
70,033
7,946
74,878
-
-
-
-
3,211
-
316,947
5,113
16,574
13,206
545
56,342
797
Provision for tax
108,624
2,716
-
-
-
-
-
Net income/(loss)
208,323
2,397
16,574
13,206
545
56,342
797
-
20,231
2,982
-
9,479
-
-
57
(15)
8
2
4
14
-
-
-
-
-
-
-
-
57
20,216
2,990
2
9,483
14
-
Admin expense
208,266
(17,819)
13,584
13,204
(8,938)
56,328
797
1,770,292
1,233,658
501,331
86,160
295,513
685,542
58,801
719,384
(80,852)
158,308
45,643
44,960
191,204
12,828
11.8%
-1.4%
2.7%
15.3%
-3.0%
8.2%
1.4%
29.0%
-22.0%
8.6%
-28.9%
-19.9%
29.5%
6.2%
3.2%
7.7%
9.1%
1.0%
7.2%
12.3%
16.6%
177.3%
100.8%
114.6%
177.5%
100.8%
145.3%
105.7%
177.3%
97.7%
111.6%
177.4%
88.1%
145.3%
105.7%
88
MFI
AMRDO
MO
Mojaz
Naymet
NRDP
OPD
SDS
Total revenue
22,948
10,389
25,140
1,676
26,925
18,184
7,857
-
-
-
-
-
1,443
-
7,815
3,831
121,699
6,522
3,414
5,189
969
30,763
14,220
146,839
8,198
30,339
24,815
8,826
8,323
4,291
5,798
-
8,445
8,749
1,952
22,440
9,929
141,041
8,198
21,894
16,066
6,875
2,554
636
2,605
346
1,485
664
865
19,886
9,293
138,435
7,852
20,409
15,402
6,009
Personnel expense
12,200
5,267
8,264
2,952
5,244
7,664
1,883
6,642
3,689
7,091
4,280
9,119
6,367
2,454
18,842
8,956
15,355
7,233
14,363
14,032
4,337
-
-
120,966
-
-
-
-
1,044
337
2,115
619
6,047
1,370
1,673
Admin expense
Provision for tax
-
-
-
-
-
306
-
Net income/(loss)
1,044
337
2,115
619
6,047
1,065
1,673
1,003
236
4,091
-
-
-
2,857
2
-
1
1
(2)
(3)
-
-
-
-
-
-
-
-
1,005
236
4,092
1
(2)
(3)
2,857
39
101
(1,977)
618
6,049
1,067
(1,184)
139,731
70,455
155,396
10,724
106,477
79,936
65,564
29,402
14,938
40,789
9,038
24,400
5,702
8,543
0.0%
0.1%
-1.3%
5.8%
5.7%
1.3%
-1.8%
0.1%
0.7%
-4.8%
6.8%
24.8%
18.7%
-13.9%
12.4%
7.4%
9.4%
0.0%
15.6%
19.3%
7.1%
103.5%
102.4%
101.5%
108.2%
124.9%
105.8%
123.4%
100.1%
100.7%
98.7%
108.2%
124.9%
105.9%
88.2%
MFI
89
SRDO
SVDP
VDO
Sub
MFI
5,732
17,070
7,420
3,197,307
197,605
-
-
-
4,100
8,130
4,251
611,672
Total revenue
9,832
25,200
11,671
4,006,584
3,456
4,707
4,055
913,898
6,376
20,493
7,615
3,092,686
2,264
1,829
3,165
185,636
4,112
18,664
4,450
2,907,050
Personnel expense
2,370
8,089
3,390
1,232,133
Admin expense
3,117
9,995
2,997
767,477
5,488
18,084
6,387
1,999,610
-
-
-
302,226
(1,376)
580
(1,937)
605,214
Provision for tax
-
-
-
111,645
Net income/(loss)
(1,376)
580
(1,937)
493,569
1,128
1,837
90
55,879
-
1
-
96
-
-
-
18,743
1,128
1,838
90
74,718
(2,504)
(1,258)
(2,027)
418,851
55,706
92,110
53,404
12,187,529
6,603
22,481
1,950
2,031,439
Weighted
Avg.
-4.5%
-1.4%
-3.8%
3.4%
-37.9%
-5.6%
-104.0%
20.6%
8.9%
8.1%
10.2%
10.4%
87.7%
102.4%
85.8%
117.8%
79.7%
95.2%
85.2%
115.3%
90
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
224,420
219,084
2,167,900
289,914
MFB
1,561,271
158,137
204,115
65,800
-
-
20,000
22,617
23,553
19,356
34,436
9,326
109,288
1,788,002
247,490
24,345
258,856
248,410
2,567,102
Total revenue
4,989
532,231
72,164
2,107
84,632
109,540
800,674
1,255,771
175,326
22,238
174,224
138,870
1,766,428
17,678
9,648
-
6,841
-
34,167
1,238,093
165,678
22,238
167,383
138,870
1,732,261
Personnel expense
504,654
34,152
6,519
50,237
75,582
671,143
Admin expense
212,199
20,887
5,686
29,126
44,687
312,585
716,854
55,038
12,205
79,363
120,269
983,728
-
-
-
7,006
-
7,006
521,239
110,639
10,033
81,015
18,601
741,527
Provision for tax
-
-
-
-
-
-
Net income/(loss)
521,239
110,639
10,033
81,015
18,601
741,527
-
-
-
-
11,922
11,922
133
81
2
15
16
247
-
-
-
-
-
-
133
81
2
15
11,938
12,169
729,358
521,106
110,558
10,031
81,000
6,663
7,235,057
2,595,295
40,981
1,004,172
1,190,201
1,709,989
1,065,362
27,433
213,764
200,919
12,065,706
3,217,467
Weighted
Avg.
7.2%
4.3%
24.5%
8.1%
0.6%
6.0%
30.5%
10.4%
36.6%
37.9%
3.3%
22.7%
10.6%
8.6%
7.6%
12.7%
10.8%
10.6%
141.1%
180.8%
170.1%
145.6%
108.1%
140.6%
141.1%
180.7%
170.1%
145.5%
102.8%
139.7%
91
MFB Sub
MFI Sub
RSPSub
Total
8,177,686
3,197,307
2,167,900
13,542,893
1,255,456
197,605
289,914
1,742,975
1,372,075
611,672
109,288
2,093,035
10,805,217
4,006,584
2,567,102
17,378,903
Total revenue
3,053,016
913,898
800,674
4,767,589
7,752,201
3,092,686
1,766,428
12,611,314
439,008
185,636
34,167
658,812
7,313,192
2,907,050
1,732,261
11,952,503
Personnel expense
3,129,066
1,232,133
671,143
5,032,342
Admin expense
2,800,858
767,477
312,585
3,880,920
5,929,924
1,999,610
983,728
8,913,262
71,761
302,226
7,006
380,993
1,311,507
605,214
741,527
2,658,248
Provision for tax
391,472
111,645
-
503,118
Net income/(loss)
920,035
493,569
741,527
2,155,130
113,621
55,879
11,922
181,422
809
96
247
1,152
-
18,743
-
18,743
114,430
74,718
12,169
201,317
805,605
418,851
729,358
1,953,814
45,939,046
12,187,529
12,065,706
70,192,281
9,264,281
2,031,439
3,217,467
14,513,187
Weighted
Avg.
Weighted
Avg.
Weighted
Avg.
Weighted
Avg.
1.8%
3.4%
6.0%
2.8%
8.7%
20.6%
22.7%
13.5%
12.7%
10.4%
10.6%
11.8%
113.8%
117.8%
140.6%
118.1%
112.5%
115.3%
139.7%
116.5%
92
OPERATING INCOME
KBL
TMFB
POMFB
FMFB
NRSP-B
2,455,172
2,308,861
36,415
1,116,445
1,517,624
Total revenue
2,862,166
3,465,381
107,479
1,506,144
1,777,989
Adjusted net operating income / (loss)
447,710
615,293
(44,574)
1,341
337,576
11,621,636
14,270,282
812,947
6,287,955
8,068,764
Gross loan portfolio (opening balance)
5,805,576
6,700,230
119,165
3,056,662
3,057,045
Gross loan portfolio (closing balance)
8,859,405
8,331,554
117,931
3,499,317
4,845,000
7,332,490
7,515,892
118,548
3,277,990
3,951,023
9%
9%
9%
9%
9%
Total revenue ratio (total revenue-to-average total
assets)
24.6%
24.3%
13.2%
24.0%
22.0%
Adjusted profit margin (adjusted profit/(loss)-to-total
revenue)
15.6%
17.8%
-41.5%
0.1%
19.0%
33.5%
30.7%
30.7%
34.1%
38.4%
22.2%
19.7%
19.7%
22.8%
26.7%
Inflation rate *
FINCA
AMFB
U-Bank
MFB
Total
MFB
649,723
89,994
3,452
8,177,686
Total revenue
813,388
155,401
117,268
10,805,217
(5,131)
(52,144)
(102,994)
1,197,077
2,566,064
1,064,100
1,247,296
45,939,046
1,152,299
125,859
763
20,017,598
2,036,069
341,838
41,381
28,072,495
1,594,184
233,848
21,072
24,045,047
9%
9%
9%
9%
Inflation rate *
Weighted
Avg.
assets)
31.7%
14.6%
9.4%
23.5%
revenue)
-0.6%
-33.6%
-87.8%
11.1%
40.8%
38.5%
16.4%
34.0%
28.9%
26.8%
6.6%
22.7%
* http://www.sbp.org.pk/reports/stat_reviews/Bulletin/2013/May/IND.pdf
93
OPERATING INCOME
OPP
KASHF
SAFCO
DAMEN
CSC
GBTI
60,052
1,072,131
115,549
259,611
115,908
13,282
Total revenue
77,607
1,223,797
136,257
292,590
128,101
79,564
(32,005)
111,734
(20,874)
64,518
1,813
12,055
761,869
4,207,499
562,146
980,172
479,524
324,314
470,392
2,948,994
345,010
664,281
207,964
36,978
507,870
3,543,155
413,875
750,530
293,493
50,763
489,131
3,246,075
379,442
707,405
250,728
43,871
9%
9%
9%
9%
9%
9%
10.2%
29.1%
24.2%
29.9%
26.7%
24.5%
-41.2%
9.1%
-15.3%
22.1%
1.4%
15.2%
12.3%
33.0%
30.5%
36.7%
46.2%
30.3%
2.8%
21.8%
19.5%
25.2%
33.9%
19.3%
Inflation rate *
assets)
revenue)
FFO
ASA-P
BRAC-P
JWS
Sungi
MFI
ORIX
31,494
710,791
363,217
109,461
29,385
63,911
Total revenue
52,202
727,046
634,054
130,426
30,256
66,195
(14,741)
316,890
(15,103)
13,584
13,204
(8,938)
173,076
1,770,292
1,233,658
501,331
86,160
295,513
86,927
1,501,810
820,199
305,451
71,161
190,705
125,333
1,896,801
884,295
319,169
89,582
233,715
106,130
1,699,305
852,247
312,310
80,371
212,210
9%
9%
9%
9%
9%
9%
30.2%
41.1%
51.4%
26.0%
35.1%
22.4%
-28.2%
43.6%
-2.4%
10.4%
43.6%
-4.7%
29.7%
41.8%
42.6%
35.0%
36.6%
30.1%
18.8%
29.9%
30.6%
23.7%
25.1%
19.2%
Inflation rate *
assets)
revenue)
94
MFI
OPERATING INCOME
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
157,556
11,670
22,948
10,389
25,140
1,676
Total revenue
180,717
14,676
30,763
14,220
146,839
8,198
56,328
797
39
101
(1,977)
618
685,542
58,801
139,731
70,455
155,396
10,724
336,300
27,779
55,767
51,356
44,159
9,807
444,610
43,725
78,150
64,083
78,601
9,511
390,455
35,752
66,959
57,720
61,380
9,659
9%
9%
9%
9%
9%
9%
assets)
26.4%
25.0%
22.0%
20.2%
94.5%
76.4%
revenue)
16.7%
2.9%
0.1%
0.2%
-4.5%
6.3%
40.4%
32.6%
34.3%
18.0%
41.0%
17.4%
28.5%
21.5%
23.0%
8.1%
29.1%
7.5%
Inflation rate *
NRDP
OPD
SDS
SRDO
SVDP
VDO
MFI
Total
MFB
26,925
18,184
7,857
5,732
17,070
7,420
3,197,307
Total revenue
30,339
24,815
8,826
9,832
25,200
11,671
4,006,584
6,049
1,373
(1,184)
(2,504)
(1,258)
(2,027)
530,497
106,477
79,936
65,564
55,706
92,110
53,404
12,187,529
27,911
37,193
32,255
32,246
41,373
30,260
7,905,886
80,606
53,404
22,907
45,264
74,448
49,194
9,645,214
54,259
45,298
27,581
38,755
57,910
39,727
8,775,550
9%
9%
9%
9%
9%
9%
9%
Inflation rate *
Weighted
Avg.
assets)
28.5%
31.0%
13.5%
17.7%
27.4%
21.9%
32.9%
revenue)
21.7%
3.7%
-3.7%
-7.8%
-3.0%
-6.7%
13.2%
49.6%
40.1%
28.5%
14.8%
29.5%
18.7%
36.4%
37.0%
28.3%
17.7%
5.1%
18.6%
8.7%
24.9%
95
OPERATING INCOME
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
RSP
1,561,271
158,137
4,989
224,420
219,084
2,167,900
Total revenue
1,788,002
247,490
24,345
258,856
248,410
2,567,102
521,106
110,558
10,031
81,000
6,663
729,358
7,235,057
2,595,295
40,981
1,004,172
1,190,201
12,065,706
4,446,827
780,600
22,928
547,420
947,472
6,745,246
5,584,405
903,664
32,174
789,789
1,077,973
8,388,003
5,015,616
842,132
27,551
668,604
1,012,723
7,566,625
9%
9%
9%
9%
9%
9%
Inflation rate *
Weighted
Avg.
assets)
24.7%
9.5%
59.4%
25.8%
20.9%
21.3%
revenue)
29.1%
44.7%
41.2%
31.3%
2.7%
28.4%
31.1%
18.8%
18.1%
33.6%
21.6%
28.7%
20.1%
8.8%
8.2%
22.3%
11.4%
17.8%
MFB Sub
Total revenue
MFI Sub
RSP Sub
Total
8,177,686
3,197,307
2,167,900
13,542,893
10,805,217
4,006,584
2,567,102
17,378,903
1,197,077
530,497
729,358
2,456,931
45,939,046
12,187,529
12,065,706
70,192,281
20,017,598
7,905,886
6,745,246
34,668,730
28,072,495
9,645,214
8,388,003
46,105,712
24,045,047
8,775,550
7,566,625
40,387,221
9%
9%
9%
9%
Inflation rate *
Weighted
Avg.
Weighted
Avg.
Weighted
Avg.
Weighted
Avg.
assets)
23.5%
32.9%
21.3%
24.8%
revenue)
11.1%
13.2%
28.4%
14.1%
34.0%
36.4%
28.7%
33.5%
22.7%
24.9%
17.8%
22.3%
96
OPERATING EXPENSE
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
AMFB
U-Bank
Sub
MFB
2,397,546
2,805,224
142,067
1,504,803
1,440,413
818,519
207,545
220,262
9,536,378
705,589
1,035,298
395
541,946
617,873
212,456
52,379
1,511
3,167,446
expense
169,123
11,390
20,986
124,759
65,522
16,260
30,607
363
439,008
5,929,924
Operating expense
1,522,834
1,758,536
120,686
838,098
757,019
589,803
124,560
218,388
Adjustment expense
90,241
139
63
23,663
95
-
24
205
114,430
11,621,636
14,270,282
812,947
6,287,955
8,068,764
2,566,064
1,064,100
1,247,296
45,939,046
Weighted
Avg.
20.6%
19.7%
17.5%
23.9%
17.9%
31.9%
19.5%
17.7%
20.8%
6.1%
7.3%
0.0%
8.6%
7.7%
8.3%
4.9%
0.1%
6.9%
1.5%
0.1%
2.6%
2.0%
0.8%
0.6%
2.9%
0.0%
1.0%
13.1%
12.3%
14.8%
13.3%
9.4%
23.0%
11.7%
17.5%
12.9%
7.4%
6.4%
9.2%
6.9%
4.5%
12.1%
6.1%
9.6%
6.8%
5.7%
6.0%
5.6%
6.5%
4.9%
10.8%
5.6%
7.9%
6.1%
total assets
0.8%
0.0%
0.0%
0.4%
0.0%
0.0%
0.0%
0.0%
0.2%
OPP
KASHF
SAFCO
DAMEN
CSC
GBTI
FFO
ASA-P
107,573
1,055,072
157,131
228,073
126,276
26,247
62,038
335,278
21,034
474,152
37,598
91,536
35,000
1,941
15,381
54,891
expense
56,950
3,858
27,122
35,521
4,870
139
3,612
31,013
Operating expense
29,589
577,063
92,411
101,015
86,406
24,168
43,044
249,375
Adjustment expense
49,217
(31)
20,377
14
6,113
402
3,839
57
761,869
4,207,499
562,146
980,172
479,524
324,314
173,076
1,770,292
14.1%
25.1%
28.0%
23.3%
26.3%
8.1%
35.8%
18.9%
2.8%
11.3%
6.7%
9.3%
7.3%
0.6%
8.9%
3.1%
7.5%
0.1%
4.8%
3.6%
1.0%
0.0%
2.1%
1.8%
3.9%
13.7%
16.4%
10.3%
18.0%
7.5%
24.9%
14.1%
2.3%
10.5%
9.0%
6.2%
9.4%
4.5%
14.0%
9.9%
1.6%
3.2%
7.4%
4.1%
8.6%
3.0%
10.9%
4.2%
total assets
6.5%
0.0%
3.6%
0.0%
1.3%
0.1%
2.2%
0.0%
MFI
97
OPERATING EXPENSE
BRAC-P
JWS
Sungi
ORIX
RCDS
Agahe
AMRDO
MO
649,158
116,841
17,051
75,132
121,177
13,879
30,723
14,120
86,038
31,506
2,142
24,843
47,893
5,933
9,328
4,527
expense
55,311
8,232
418
14,619
3,251
-
2,554
636
8,956
Operating expense
507,809
77,103
14,491
35,670
70,033
7,946
18,842
Adjustment expense
20,216
2,990
2
9,483
14
-
1,005
236
1,233,658
501,331
86,160
295,513
685,542
58,801
139,731
70,455
52.6%
23.3%
19.8%
25.4%
17.7%
23.6%
22.0%
20.0%
7.0%
6.3%
2.5%
8.4%
7.0%
10.1%
6.7%
6.4%
4.5%
1.6%
0.5%
4.9%
0.5%
0.0%
1.8%
0.9%
41.2%
15.4%
17%
12.1%
10.2%
13.5%
13.5%
12.7%
19.8%
9.3%
5.9%
6.0%
6.5%
8.4%
8.7%
7.5%
21.3%
6.1%
10.9%
6.1%
3.8%
5.1%
4.8%
5.2%
1.6%
0.6%
0.0%
3.2%
0.0%
0.0%
0.7%
0.3%
total assets
Mojaz
Naymet
NRDP
OPD
SDS
SRDO
SVDP
VDO
MFI
Sub
MFB
27,850
7,580
24,290
23,442
10,011
12,336
26,458
13,698
3,173,862
9,890
1
8,442
8,746
4,809
4,584
6,545
4,145
969,873
expense
2,605
346
1,485
664
865
2,264
1,829
3,165
204,379
Operating expense
15,355
7,233
14,363
14,032
4,337
5,488
18,084
6,387
1,999,610
Adjustment expense
4,092
1
(2)
(3)
2,857
1,128
1,838
90
74,718
155,396
10,724
106,477
79,936
65,564
55,706
92,110
53,404
12,187,529
Weighted
Avg.
17.9%
70.7%
22.8%
29.3%
15.3%
22.1%
28.7%
25.7%
26.0%
6.4%
0.0%
7.9%
10.9%
7.3%
8.2%
7.1%
7.8%
8.0%
1.7%
3.2%
1.4%
0.8%
1.3%
4.1%
2.0%
5.9%
1.7%
9.9%
67.4%
13.5%
17.6%
6.6%
9.9%
19.6%
12.0%
16.4%
5.3%
27.5%
4.9%
9.6%
2.9%
4.3%
8.8%
6.3%
10.1%
4.6%
39.9%
8.6%
8.0%
3.7%
5.6%
10.9%
5.6%
6.3%
total assets
2.6%
0.0%
0.0%
0.0%
4.4%
2.0%
2.0%
0.2%
0.6%
98
OPERATING EXPENSE
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
RSP
Adjusted loan loss provision expense
Operating expense
1,266,896
136,932
14,314
170,850
241,747
1,830,739
532,364
72,245
2,109
84,647
121,478
812,843
17,678
9,648
-
6,841
-
34,167
983,728
716,854
55,038
12,205
79,363
120,269
Adjustment expense
133
81
2
15
11,938
12,169
7,235,057
2,595,295
40,981
1,004,172
1,190,201
12,065,706
17.5%
5.3%
34.9%
17.0%
20.3%
15.2%
Adjusted financial expense-to-average total
assets
7.4%
2.8%
5.1%
8.4%
10.2%
6.7%
Adjusted loan loss provision expense-toaverage total assets
0.2%
0.4%
0.0%
0.7%
0.0%
0.3%
Adjusted operating expense-to-average
total assets
9.9%
2.1%
29.8%
7.9%
10.1%
8.2%
7.0%
1.3%
15.9%
5.0%
6.4%
5.6%
2.9%
0.8%
13.9%
2.9%
3.8%
2.6%
Adjustment expense-to-average total assets
0.0%
0.0%
0.0%
0.0%
1.0%
0.1%
Weighted Avg.
Adjusted total expense-to-average total
assets
MFB Sub
MFI Sub
RSP Sub
Total
9,536,378
3,173,862
1,830,739
14,540,979
3,167,446
969,873
812,843
4,950,162
Adjusted loan loss provision expense
439,008
204,379
34,167
677,555
5,929,924
1,999,610
983,728
8,913,262
Adjustment expense
114,430
74,718
12,169
201,317
45,939,046
12,187,529
12,065,706
70,192,281
20.8%
26.0%
15.2%
20.7%
Adjusted financial expense-to-average total
assets
6.9%
8.0%
6.7%
7.1%
Adjusted loan loss provision expense-toaverage total assets
1.0%
1.7%
0.3%
1.0%
Adjusted operating expense-to-average
total assets
12.9%
16.4%
8.2%
12.7%
6.8%
10.1%
5.6%
7.2%
6.1%
6.3%
2.6%
5.5%
Adjustment expense-to-average total assets
0.2%
0.6%
0.1%
0.3%
Operating expense
Weighted Avg.
Adjusted total expense-to-average total
assets
99
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
AMFB
U-Bank
Sub
MFB
Operating expense (PKR
000)
1,522,834
1,758,536
120,686
838,098
757,019
589,803
124,560
218,388
5,929,924
Personnel expense (PKR
000)
859,682
906,836
74,977
430,869
360,870
311,737
64,830
119,265
3,129,066
7,332,490
7,515,892
118,548
3,277,990
3,951,023
1,594,184
233,848
21,072
24,045,047
borrowers
409,230
197,811
4,803
130,397
171,718
39,078
8,606
1,220
962,863
loans
409,230
197,811
4,803
130,397
171,718
39,692
8,606
1,220
963,477
Average gross loan
portfolio (PKR 000)
Weighted
Avg.
Adjusted operating
expense-to-average
gross loan portfolio
20.77%
23.4%
101.8%
25.6%
19.2%
37.0%
53.3%
1036.4%
24.7%
Adjusted personnel
expense-to-average
gross loan portfolio
11.72%
12.1%
63.2%
13.1%
9.1%
19.6%
27.7%
566.0%
13.0%
2.6
2.9
2.9
2.7
2.0
2.7
2.2
3.3
2.6
Adjusted cost per
borrower (PKR)
3,721
8,890
25,127
6,427
4,409
15,093
14,474
179,007
6,159
Adjusted cost per loan
(PKR)
3,721
8,890
25,127
6,427
4,409
14,859
14,474
179,007
6,155
Average salary/gross
domestic product per
capita
100
701
1,848
2,384
2,871
4,651
4,996
4,003
1,389
9,010
3,616
1,358
2,185
2,208
701
1,848
2,384
2,871
4,651
1,839
4,003
1,389
9,010
3,616
1,358
2,185
2,208
Average salary/gross domestic product per capita
1.2
2.2
0.7
1.9
1.7
1.3
1.4
1.4
2.0
2.2
1.4
11.4%
8.3%
6.3%
15.0%
28.7%
10.3%
22.8%
33.1%
18.0%
8.6%
13.3%
17.9%
16.8%
18.0%
24.7%
59.6%
14.7%
40.6%
55.1%
34.5%
14.3%
24.4%
17.8%
Adjusted personnel expense-to-average gross
loan portfolio
13.6%
Adjusted operating expense-to-average gross loan
portfolio
1.6
31,715
16,322
10,670
21,323
56,359
179,588
10,753
13,143
18,578
35,185
38,762
312,182
31,715
16,322
10,670
21,323
56,359
179,588
10,753
4,837
18,578
35,185
38,762
312,182
42,224
Average number of active borrowers
42,224
390,455
212,210
80,371
312,310
852,247
1,699,305
106,130
43,871
250,728
707,405
379,442
3,246,075
489,131
Average gross loan portfolio (PKR 000)
6.0%
70,033
35,670
14,491
77,103
507,809
249,375
43,044
24,168
86,406
101,015
92,411
577,063
29,589
Continued in next table.
44,320
17,637
5,060
46,693
244,536
175,181
24,251
14,517
45,139
61,054
50,634
440,869
17,289
Personnel expense (PKR 000)
3.5%
Operating expense (PKR 000)
1.2
RCDS
ORIX
Sungi
JWS
BRAC-P
ASA-P
FFO
GBTI
CSC
DAMEN
SAFCO
KASHF
OPP
MFI
101
2,076
1,918
2,517
3,334
2,893
2,993
3,254
1,201
2,744
5,091
1,584
2,554
2,076
1,918
2,517
3,334
2,893
2,987
3,254
1,201
2,684
5,091
1,584
2,527
102
1.5
1.2
1.4
0.9
0.5
1.4
0.3
1.1
0.4
1.9
Adjusted personnel expense-to-average gross
loan portfolio
14.0%
8.5%
14.0%
6.1%
6.8%
16.9%
9.7%
30.6%
13.5%
9.1%
18.2%
portfolio
1.1
22.8%
16.1%
31.2%
14.2%
15.7%
31.0%
26.5%
74.9%
25.0%
15.5%
28.1%
Weighted
Avg.
791,255
4,033
3,552
2,045
3,611
4,312
4,809
2,500
4,606
3,558
9,821
782,894
4,033
3,552
2,000
3,611
4,312
4,799
2,500
4,606
3,558
9,821
3,828
3,828
8,775,550
39,727
57,910
38,755
27,581
45,298
54,259
9,659
61,380
57,720
66,959
35,752
22.2%
1,232,133
3,390
8,089
2,370
1,883
7,664
5,244
2,952
8,264
5,267
12,200
4,920
13.8%
1,999,610
6,387
18,084
5,488
4,337
14,032
14,363
7,233
15,355
8,956
18,842
7,946
1.4
Sub
VDO
SVDP
SRDO
SDS
OPD
NRDP
Naymet
Mojaz
MO
AMRDO
Agahe
MFI
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
716,854
55,038
12,205
79,363
120,269
983,728
504,654
34,152
6,519
50,237
75,582
671,143
5,015,616
842,132
27,551
668,604
1,012,723
7,566,625
390,995
72,631
3,838
71,114
66,315
604,893
390,995
72,631
3,838
71,114
66,315
604,893
Weighted
Avg.
portfolio
14.3%
6.5%
44.3%
11.9%
11.9%
13.0%
Adjusted personnel expense-to-average gross loan
portfolio
10.1%
4.1%
23.7%
7.5%
7.5%
8.9%
1.6
0.4
2.4
0.9
1.7
1.3
1,833
758
3,180
1,116
1,814
1,626
1,833
758
3,180
1,116
1,814
1,626
MFB Sub Total
MFI Sub Total
RSP Sub Total
5,929,924
1,999,610
Total
983,728
8,913,262
3,129,066
1,232,133
671,143
5,032,342
24,045,047
8,775,550
7,566,625
40,387,221
962,863
782,894
604,893
2,350,650
963,477
791,255
604,893
2,359,625
Weighted Avg.
Weighted Avg.
Weighted Avg.
Weighted Avg.
portfolio
24.7%
22.8%
13.0%
22.1%
Adjusted personnel expense-to-average gross loan
portfolio
13.0%
14.0%
8.9%
12.5%
2.6
1.5
1.3
2.0
6,159
2,554
1,626
3,792
6,155
2,527
1,626
3,777
103
PRODUCTIVITY
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
AMFB
U-Bank
Sub
MFB
409,230
197,811
4,803
130,397
171,718
39,078
8,606
1,220
913,959
409,230
197,811
4,803
130,397
171,718
39,692
8,606
1,220
913,959
674,061
833,313
18,735
263,437
108,326
200,489
31,812
20,502
1,897,872
674,061
1,643,313
18,735
263,437
108,326
238,345
31,812
20,612
2,707,872
2,293
2,198
182
1,122
1,247
797
209
250
7,042
480
596
62
535
624
274
87
31
2,297
Total staff
Total loan officers
Weighted
Avg.
Borrowers per staff
178
90
26
116
138
Loans per staff
178
90
26
116
853
332
77
244
853
332
77
294
379
294
748
20.9%
27.1%
104
49
41
5
130
138
50
275
143
41
5
130
99
39
244
275
398
145
99
39
398
103
235
103
235
87
252
152
82
270
87
299
152
82
34.1%
47.7%
385
50.0%
34.4%
41.6%
12.4%
32.6%
56.5%
56.4%
72.5%
44.0%
32.0%
61.3%
33.9%
36.1%
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
35.5%
0
0
227
527
288
288
177
319
269
506
338
440
315
334
227
527
288
288
177
319
269
186
338
440
315
334
Loans per staff
41.5%
0
0
128
297
209
127
57
196
91
183
120
182
153
168
Borrowers per staff
128
297
209
127
57
196
91
67
120
182
153
168
435
140
31
37
74
319
563
40
26
55
80
123
935
26
Total loan officers
435
248
55
51
168
996
918
118
72
155
193
254
1,858
97
Total staff
1,624
-
-
-
-
-
-
-
-
-
-
-
-
-
1,624
-
-
-
-
-
-
-
-
-
-
-
-
-
48.4%
0
31,715
16,322
10,670
21,323
56,359
179,588
10,753
4,837
18,578
35,185
38,762
312,182
42,224
Continued in next table
31,715
16,322
10,670
21,323
56,359
179,588
10,753
13,143
18,578
35,185
38,762
312,182
42,224
50.3%
0
26.8%
RCDS
ORIX
AKHUWAT
JWS
BRAC
ASA-P
FFO
GBTI
CSC
DAMEN
SAFCO
KASHF
OPP
PRODUCTIVITY
MFI
105
106
47.6%
40.0%
37.5%
33.3%
41.7%
44.7%
10.3%
0
0
0
0
0
0
0
0
-
0
0
0
0
0
0
0
0
-
22.2%
0
0
307
504
237
341
361
254
437
625
307
445
307
304
504
237
333
361
254
436
625
307
445
307
Loans per staff
10.8%
0
0
146
202
89
114
150
113
45
139
33
187
124
Borrowers per staff
145
202
89
111
150
113
45
139
33
187
124
153
Weighted
Avg.
2,423
8
15
6
10
17
11
4
15
8
32
12
Total loan officers
153
5,086
20
40
18
24
38
107
18
139
19
79
25
Total staff
319
-
-
-
-
-
-
-
-
-
-
-
-
319
-
-
-
-
-
-
-
-
-
-
-
-
42.1%
0
744,580
4,033
3,552
2,045
3,611
4,312
4,809
2,500
4,606
3,558
9,821
3,828
40.5%
0
736,274
4,033
3,552
2,000
3,611
4,312
4,799
2,500
4,606
3,558
9,821
3,828
48.0%
Sub
VDO
SVDP
SRDO
SDS
OPD
NRDP
Naymet
Mojaz
MO
AMRDO
Agahe
PRODUCTIVITY
MFI
PRODUCTIVITY
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
RSP
390,995
72,631
3,838
71,114
66,315
604,893
390,995
72,631
3,838
71,114
66,315
604,893
-
-
-
-
-
-
-
-
-
-
-
-
Total staff
2,202
617
19
389
318
3,545
Total loan officers
1,842
64
6
230
30
2,172
Weighted
Avg.
Borrowers per staff
178
118
202
183
Loans per staff
178
118
202
212
1,135
640
212
1,135
-
83.7%
MFB Sub Total
209
171
183
209
171
309
2,211
278
640
309
2,211
278
-
-
-
-
-
-
-
-
-
-
10.4%
31.6%
59.1%
9.4%
61.3%
MFI Sub Total
RSP Sub Total
Total
913,959
736,274
604,893
2,255,126
913,959
744,580
604,893
2,263,432
1,897,872
-
-
1,897,872
2,707,872
-
-
2,707,872
Total staff
7,042
5,086
3,545
15,673
Total loan officers
2,297
2,423
2,172
6,892
Weighted Avg.
Weighted Avg.
Weighted Avg.
Weighted Avg.
Borrowers per staff
130
145
171
144
Loans per staff
130
146
171
144
398
304
278
327
398
307
278
328
270
-
-
121
385
-
-
173
32.6%
47.6%
61.3%
44.0%
107
RISK
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
AMFB
U-Bank
Sub
MFB
69,651
49,489
5,587
31,361
15,149
13,200
94,687
22
279,146
24,883
3,602
2,149
10,716
13,046
1,195
27,286
22
82,900
102,510
20,426
2,801
48,899
54,644
16,260
22,821
342
268,703
Loan Portfolio written off
during year
155,157
22,466
20,805
160,792
46,868
10,739
11,857
341
429,025
8,859,405
8,331,554
117,931
3,499,317
4,845,000
2,036,069
341,838
41,381
28,072,495
7,332,490
7,515,892
118,548
3,277,990
3,951,023
1,594,184
233,848
21,072
24,045,047
Weighted
Avg.
Portfolio at risk (>30)-to-gross
loan portfolio
0.8%
0.6%
4.7%
0.9%
0.3%
0.6%
27.7%
0.1%
1.0%
Portfolio at risk(>90)-to-gross
loan portfolio
0.3%
0.0%
1.8%
0.3%
0.3%
0.1%
8.0%
0.1%
0.3%
Write off-to-average gross
loan portfolio
2.1%
0.30%
17.5%
4.9%
1.2%
0.7%
5.1%
1.6%
1.8%
147.2%
41.3%
50.1%
155.9%
360.7%
123.2%
24.1%
1552.6%
96.3%
Risk coverage ratio (adjusted
loan loss reserve-to-portfolio
at risk >30days)
108
2.4%
0.3%
0.0%
0.4%
2.9%
7.1%
0.2%
0.2%
4.5%
0.6%
315.0%
1022.6%
0.0%
611.2%
264.8%
49.5%
1753.0%
100.0%
2.6%
1042.5%
Risk coverage ratio (adjusted loan loss reserve-toportfolio at risk >30days)
0.0%
Write off-to-average gross loan portfolio
86.2%
Portfolio at risk(>90)-to-gross loan portfolio
0.6%
0.2%
6.9%
0.0%
0.3%
4.8%
0.4%
0.4%
0.0%
0.0%
1.0%
3.2%
0.3%
7.2%
0.0%
0.3%
5.5%
0.5%
0.8%
0.0%
0.5%
1.6%
3.3%
17.5%
390,455
212,210
80,371
312,310
852,247
1,699,305
106,130
43,871
250,728
707,405
379,442
3,246,075
444,610
233,715
89,582
319,169
884,295
1,896,801
125,333
50,763
293,493
750,530
413,875
3,543,155
507,870
-
2,172
9,537
141
528
60,195
48,474
423
-
839
17,215
-
19,297
Loan Portfolio written off during year
17.4%
Portfolio at risk (>30)-to-gross loan portfolio
8.6%
489,131
17.6%
16,101
434
1,344
16,310
24,144
23,630
6,256
-
14,695
37,526
11,717
53,141
14,777
15.7%
1,545
16,787
-
930
48,798
8,925
1,024
-
1,437
11,913
13,586
619,556
89,210
Continued in next table
856
16,240
-
911
42,101
7,529
509
-
43
7,442
13,260
615,057
79,599
0.0%
16.6%
RCDS
ORIX
Sungi
JWS
BRAC-P
ASA-P
FFO
GBTI
CSC
DAMEN
SAFCO
KASHF
OPP
RISK
MFI
109
0.0%
1.6%
0.0%
0.0%
0.0%
0.0%
3.4%
0.4%
0.4%
0.3%
3.5%
1.9%
11505.3%
60.0%
100%
100.0%
100.0%
1001.9%
54.6%
68.3%
220.3%
318.2%
79.7%
31.3%
110
7.4%
2.8%
1.3%
2.3%
3.8%
3.1%
0.3%
0.0%
0.0%
7.7%
6.0%
1.4%
2.3%
6.6%
3.4%
0.3%
0.0%
0.0%
0.0%
Weighted
Avg.
8,775,550
39,727
57,910
38,755
27,581
45,298
54,259
9,659
61,380
57,720
66,959
9,645,214
49,194
74,448
45,264
22,907
53,404
80,606
9,511
78,601
64,083
78,150
163,336
1,380
200
171
108
1,552
-
-
-
-
1,101
8.6%
-
231,713
2,356
3,407
2,255
1,037
1,003
2,652
346
3,930
3,204
4,039
2,186
-
715,118
1,366
993
1,032
868
1,662
263
-
-
-
4,985
0.0%
43,725
19
739,920
2,955
1,071
1,024
1,519
1,838
265
-
-
-
6,729
6.4%
35,752
0.0%
0.0%
Sub
VDO
SVDP
SRDO
SDS
OPD
NRDP
Naymet
Mojaz
MO
AMRDO
Agahe
RISK
MFI
RISK
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
RSP
83,262
1,624
-
19,718
33,627
138,230.67
81,018
1,405
-
19,374
32,350
134,148.12
75,255
79,814
-
629
52,241
207,939
20,983
-
20
-
1,930
22,932.28
5,584,405
903,664
32,174
789,789
1,077,973
8,388,003
5,015,616
842,132
27,551
668,604
1,012,723
7,566,625
Weighted
Avg.
1.5%
0.2%
0.0%
2.5%
3.1%
1.6%
1.5%
0.2%
0.0%
2.5%
3.0%
1.6%
0.4%
0.0%
0.1%
0.0%
0.2%
0.3%
90.4%
4915.0%
0.0%
3.2%
155.4%
150.4%
MFB Sub Total
MFI Sub Total
RSP Sub Total
Total
279,146
739,920
138,230.67
1,157,297
82,900
715,118
134,148.12
932,166
268,703
231,713
207,939
708,355
429,025
163,336
22,932.28
615,293
28,072,495
9,645,214
8,388,003
46,105,712
24,045,047
8,775,550
7,566,625
40,387,221
Weighted Avg.
Weighted Avg.
Weighted Avg.
Weighted Avg.
1.0%
7.7%
1.6%
2.5%
0.3%
7.4%
1.6%
2.0%
1.8%
1.9%
0.3%
1.5%
96.3%
31.3%
150.4%
61.2%
111
ANNEXURE C
SOURCES OF DATA (2013)
MICROFINANCE BANKS (MFBS)
APNA Microfinance Bank Ltd (AMFB)
»» The related party transactions have been properly
disclosed in notes to the financial statements.
»» AMFB provided PMN with its audited accounts. The
numbers reported in the PMR match these reports.
Riaz Ahmad and Co. audited the annual accounts of
AMFB for the year ending at 31st December 2013.
»» The grant income has been properly disclosed in
financial statements as well as there is a proper
disclosure on grants in notes to the financial
statements.
»» The financial statements have been presented as per
the requirements of the State Bank of Pakistan.
»» The following numbers have been taken from FINCA’s
MIS: i). rural-urban clients; ii). male-female clients;
iii). Number of staff; iv). Number of credit officers;
and v). Number of branches (also available in audited
accounts).
»» All necessary adjustments to FMFBL data have been
made in order to remove subsidies. Adjustments were
not made for loan loss provisioning expense, since
FMFBL is aggressive in its policies, as required by the
SBP.
statements.
»» The following numbers have been taken from AMFB’s
accounts).
»» As per the CGAP requirements, portfolio quality,
sustainability/profitability and asset/liability
management ratios should be presented to represent
the true and fair picture to stakeholders.
FINCA Microfinance Bank Ltd (FINCA) (Formerly
Kashf Microfinance Bank Ltd)
»» FINCA provided PMN with its audited accounts. The
M. Yossuf Adil Saleem and Co. audited the annual
accounts of FINCA for the year ending at 31st
December 2013.
»» Adjustments were not made for loan loss provisioning
expense, since FINCA is aggressive in its policies as
required by the SBP. Adjustment for cost of borrowing
was not made since it was entirely commercial
borrowing. FINCA prepares accounts on historical cost
basis using the accrual system of accounting.
112
Khushhali Bank Ltd (KBL)
»» KBL provided PMN with its audited accounts. The
A.F. Ferguson audited the annual accounts of KBL for
the year ending at 31st December 2013.
»» All necessary adjustments to the KBL data have been
made in order to remove subsidies. Adjustments
were not made for loan loss provisioning expense,
since KBL is aggressive in its policies, as required by
the SBP.
»» KBL prepares its accounts on historical cost basis
using the accrual system of accounting.
statements.
»» The following numbers have been taken from KBL’s
iii). Portfolio aging; iv). Number of staff; v). Number
of credit officers; and vi). Number of branches (also
available in audited accounts).
The First Microfinance Bank Ltd (FMFBL)
»» FMFB provided PMN with its audited accounts. The
KPMG audited the annual accounts of FMFBL for the
year ending at 31st December 2013.
»» All necessary adjustments to FMFBL data have been
made in order to remove subsidies. Adjustments were
not made for loan loss provisioning expense, since
FMFBL is aggressive in its policies, as required by the
SBP.
»» FMFBL prepares accounts on historical cost basis
financial statements and there is proper disclosure on
grants in notes to the financial statements.
»» There is a proper disclosure regarding the loan
portfolio and write-offs.
»» The following numbers have been taken from FMFB’s
MIS: i). rural-urban clients; ii). male-female clients; iii).
Portfolio Aging and Write-offs (verified from audited
accounts); iv). Number of staff; v). Number of credit
officers; and vi). Number of branches (also available in
audited accounts).
the true and fair picture to stake holders.
National Rural Support Programme
Microfinance Bank (NRSP-B)
»» NRSP-B provided PMN with its audited accounts. The
accounts of NRSP-B for the year ending at 31st
December 2013.
expense, since NRSP-B is aggressive in its policies as
borrowing. NRSP-B prepares accounts on historical
cost basis using the accrual system of accounting.
statements.
»» The following numbers have been taken from NRSPB’s MIS: i). rural-urban clients; ii). male-female clients;
accounts).
Pak Oman Microfinance Bank Ltd (POMFB)
»» POMFB reported its audited accounts in newspapers,
from whence the accounts were obtained. The
accounts of POMFB for the year ending at 31st
December 2013.
»» All necessary adjustments to the POMFB data
have been made in order to remove subsidies. No
adjustments were made to financial cost since
POMFB was not using any concessional or commercial
borrowing during the reported period. POMFB is
aggressive in its policies, as required by the SBP.
»» POMFB prepares accounts on historical cost basis
statements.
»» The following numbers have been taken from
POMFB’s MIS: i). rural-urban clients; ii). male-female
clients; iii). Portfolio Aging and Write-Offs (verified
from audited accounts); iv). Number of staff; v).
Number of credit officers; and vi). Number of
branches (also available in audited accounts).
»» As per the CGAP requirements portfolio quality,
113
Tameer Microfinance Bank Ltd (TMFB)
»» TMFB provided PMN with its audited accounts. The
Ernst and Young Ford Rhodes Sidat Hyder and Co.
audited the annual accounts of TMFB for the year
ending at 31st December 2013.
»» All necessary adjustments to TMFB data have been
made in order to remove subsidies. Adjustment for
cost of borrowing was not made since it was entirely
commercial borrowing. TMFB prepares accounts
on historical cost basis using the accrual system of
accounting.
statements.
»» The following numbers have been taken from TMFB’s
accounts).
U Microfinance Bank Ltd (U-bank)
»» FINCA provided PMN with its audited accounts. The
A.F. Ferguson. audited the annual accounts of FINCA
for the year ending at 31st December 2013.
expense, since FINCA is aggressive in its policies as
borrowing. FINCA prepares accounts on historical cost
basis using the accrual system of accounting.
statements.
»» The following numbers have been taken from FINCA’s
accounts).
MICROFINANCE INSTITUTION (MFI)
ASA Pakistan limited
»» ASA provided PMN with its audited accounts. The
Ernst and Young Ford Rhodes Sidat Hyder and Co has
audited the annual accounts of ASA-P for the year
»» ASA prepares its financial statements under the
historical cost convention and in conformity with
accepted accounting practices.
»» Adjustments were not made to loan loss provisioning
expense as ASA is aggressive in its policies.
»» The following numbers have been taken from the
organization’s MIS: i). rural-urban clients; and ii). malefemale clients;
»» There is proper disclosure on the balance sheet
of loan portfolio, and loan loss provision; expense
114
charged during the year is disclosed on the income
statement.
Agahe
»» Agahe provided PMN with its audited accounts. The
Uzair Hammad Faisal & Co. has audited the annual
accounts of Agahe for the year ending at 31st
December 2013.
»» Agahe prepares its financial statements under
the historical cost convention, in conformity with
»» All necessary adjustments to Agahe data have been
made in order to remove subsidies. No adjustment
was made to loan loss provisioning expense as Agahe
is aggressive in its policies.
financial statements. Additionally, there is proper
statements.
Al-Mehran Rural Development Organization
(AMRDO)
»» AMRDO provided PMN with its audited accounts. The
Hafizullah & Co. has audited the annual accounts of
AMRDO for the year ending at 30th June 2013.
»» AMRDO prepares its financial statements under
»» All necessary adjustments to data have been made in
order to remove subsidies. No adjustment was made
to loan loss provisioning expense as the institute is
aggressive in its policies.
statements.
BRAC-Pakistan
»» BRAC-Pakistan provided PMN with its audited
accounts. The numbers reported in the PMR match
these reports. KPMG (Taseer Hadi and Co) has audited
the annual accounts of BRAC-Pakistan for the year
»» BRAC prepares its financial statements under the
accepted accounting policies.
»» BRAC is an integrated program and, therefore,
prepares separate financial accounts for all its
programs. The audit is done and a consolidated
audit report is prepared with clear differentiations of
both revenue and costs for each program in light of
accounting standards.
Community Support Concern (CSC)
»» CSC provided PMN with its audited accounts. The
Riaz Ahmad & Co. audited the annual accounts of CSC
for the year ending at 30th June 2013.
»» All necessary adjustments to CSC data have been
made in order to remove subsidies. No adjustment
was made to loan loss provisioning expense as CSC is
»» CSC prepares its financial statements under the
organization’s MIS: i). rural-urban clients; ii). malefemale clients; iii). Aging on number of loans and
value of portfolio (verifiable from audited accounts);
iv). Number of staff; v). Number of credit officers; and
vi). Number of offices.
financial statements and there is proper disclosure on
grants in notes to the financial statements.
Farmers Friend Organization (FFO)
»» FFO provided PMN with its audited accounts. The
Tariq Abdul Ghani Maqbool & Co audited the annual
accounts for FFO for the year ending at 30th June
2013.
»» 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
value of portfolio iv). Number of staff; v). Number of
115
credit officers; and vi). Number of offices.
statements.
Development Action for Mobilization and
Emancipation (DAMEN)
»» DAMEN provided PMN with its audited accounts. The
Grant Thornton (Anjum Asim Shahid Rehman) audited
the annual accounts for DAMEN for the year ending at
31st December 2013.
»» As DAMEN is a multi-dimensional development
organization accounts for its microfinance function
are kept separate.
»» There is no adjustment on cost of borrowing since
DAMEN’s actual cost is higher than the adjusted
cost. Similarly, no adjustment was made to loan loss
provisioning expense; DAMEN is aggressive in its
policies.
»» DAMEN prepares its financial statements under the
statements.
value of portfolio (verifiable from audited accounts);
iv). Breakup for the number of loans doubtful; v).
Number of staff; vi). Number of credit officers
Kashf Foundation (KF)
»» KF provided PMN with its audited accounts. The
KPMG (Taseer Hadi and Co) audited the annual
accounts for KF for the year ending at 30th June
2013.
116
»» All necessary adjustments to KF data have been made
in order to remove subsidies. Adjustments were not
made for loan loss provisioning expense, since KF
is aggressive in its policies as required by the SBP.
Adjustment for cost of borrowing was not made since
it was entirely commercial borrowing. KF prepares
accounts on historical cost basis using the accrual
system of accounting.
statements.
»» The following numbers have been taken from KF’s
accounts).
Ghazi Barotha Taraqiati Idara (GBTI)
»» GBTI provided PMN with its audited accounts. The
KPMG (Taseer Hadi and Co) audited the annual
accounts for GBTI for the year ending at 30th June
2013.
»» GBTI prepares its financial statements under the
accepted accounting practices. Revenue is recognized
on receipt basis.
»» GBTI prepares its financial statements under the
value of portfolio (not verifiable from audited
accounts); iv). Number of staff; v). Number of credit
officers; and vi). Number of offices.
»» There is proper disclosure on the balance sheet
of loan portfolio, and loan loss provision; expense
charged during the year is disclosed on the income
statement.
statements.
»» The related party transactions should be presented in
notes to the financial statements.
Jinnah Welfare Society (JWS)
»» JWS provided PMN with its audited accounts. The
Tariq Abdul Ghani Maqbool & Co. audited the annual
accounts for JWS for the year ending at 30th June
2013.
Mojaz Foundation (Mojaz)
»» Mojaz provided PMN with its audited accounts. The
Ibmhim, Shaikh & Co has audited the annual accounts
of Mojaz for the year ending at 30th June 2013.
»» Mojaz prepares its financial statements under
»» JWS prepares its financial statements under the
on receipt basis.
value of portfolio (verified from audited accounts);
vi). Number of branches (also available in audited
accounts).
disclosed in notes to financial statements.
the true and fair picture to stake holders.
Micro Options (MO)
»» MO provided PMN with its audited accounts. The
Baker Tilly Mehmood Idrees Qamar has audited the
annual accounts of MO for the year ending at 31st
December 2013.
»» MO prepares its financial statements under the
historical cost convention, in conformity with
statements.
statements.
»» • As per the CGAP requirements, portfolio
quality, sustainability/profitability and asset/liability
Naymet Trust (Naymet)
»» Naymet provided PMN with its audited accounts. The
Izhar & Co has audited the annual accounts of
Naymet for the year ending at 30th June 2013.
»» Naymet prepares its financial statements under
statements.
117
National Rural Development Program (NRDP)
Orangi Charitable Trust (OCT)
»» NRDP provided PMN with its audited accounts. The
Izhar & Co has audited the annual accounts of NRDP
»» OCT provided PMN with its audited accounts. The
Tanzeem & Co. has audited the annual accounts of
OCT for the year ending at 30th June 2013.
»» NRDP prepares its financial statements under
»» OCT prepares its financial statements under the
statements.
statements.
Organization for Participatory Development
(OPD)
»» OPD provided PMN with its audited accounts. The
Izhar & Co has audited the annual accounts of OPD
»» OPD prepares its financial statements under the
statements.
118
Orix Leasing Pakistan Ltd. (OLP)
»» OLP has provided its audited accounts for the
reporting period to PMN.
»» However, given that OLP’s audited accounts do not
disclose figures related to its Microfinance Division
(MFD), the data reported in the PMR is not verifiable
with audited accounts.
»» OLP has separate staff and offices for microfinance.
OLP’s MFD has provided data specific to its
microfinance operations.
»» OLP prepares its financial statements under the
historical cost convention in using accrual system of
accounting.
»» Adjustments to the data have been made as per the
PMN’s adjustment policies. These adjustments are in
line with international practices being followed by
The MIX.
Rural Community Development Society (RCDS)
»» RCDS provided PMN with its audited accounts. The
Ijaz Tabassum & Co. audited the annual accounts for
RCDS for the year ending at 30th June 2013.
»» RCDS prepares its financial statements under the
on receipt basis.
value of portfolio (verified from audited accounts);
vi). Number of branches (also available in audited
accounts).
»» There should be proper disclosure on movement in
portfolio, loan loss provisioning, and write-offs.
SAFCO Support Fund (SAFCO)
»» SAFCO provided PMN with its audited accounts. The
Grant Thornton (Anjum Asim Shahid Rehman) audited
the annual accounts for SAFCO for the year ending at
30th June 2013.
»» Income and expense are booked on an accrual basis.
»» All necessary adjustments to SAFCO data have been
made in order to remove subsidies.
»» SAFCO prepares its financial statements under the
accepted accounting practices using the principles of
fund accounting.
organization’s MIS: i). rural-urban clients; ii). malefemale clients; iii). Aging on number of loans and value
of portfolio (not verifiable from audited accounts); iv).
Number of staff; and v). Number of credit officers.
statements.
Saath Development Society (SDS)
»» SDS provided PMN with its audited accounts. The
Tanwir Arif & Co. has audited the annual accounts of
OCT for the year ending at 30th June 2013.
»» SDS prepares its financial statements under the
historical cost convention, in conformity with accepted
accounting practices.
statements.
Shadab Rural Development Organization (SRDO)
»» SRDO provided PMN with its audited accounts. The
SRDO for the year ending at 30th June 2013.
»» SRDO prepares its financial statements under the
statements.
Soon Valley Development Program (SVDP)
»» SVDP provided PMN with its audited accounts. The
Zahid Jamil & Co. has audited the annual accounts of
SVDP for the year ending at 30th June 2013.
»» SVDP prepares its financial statements under the
119
statements.
Villagers Development Organization (VDO)
»» VDO provided PMN with its audited accounts. The
VDO for the year ending at 30th June 2013.
»» VDO prepares its financial statements under the
statements.
RURAL SUPPORT PROGRAMME (RSP)
National Rural Support Programme (NRSP)
»» NRSP has provided its audited accounts for the
reporting period to PMN and the figures tally with
the reported data. Ernst & Young Ford Rhodes Sidat
Hyder and Co. audited the annual accounts for NRSP
»» All necessary adjustments to NRSP data have been
made in order to remove subsidies. Adjustment
for cost of borrowing was not made since it was
entirely commercial borrowing. Similarly, there is no
adjustment on loan loss provisioning expense, since
NRSP is aggressive in its policies and all loans > 90
days past due are 100% provisioned for.
»» NRSP prepares its financial statements under the
»» Data on distribution of clients in terms of the
urban-rural mix is not provided in the disclosures.
However, given that NRSP has a separate program for
urban areas and rural areas and their information is
available separately, the disaggregation can be made
quite accurately. The data on gender segregation was
taken from the MIS and is not available in notes to
the accounts.
»» Data on the number of total staff, loan officers and
branches has been drawn from audited accounts.
120
management ratios are presented in the notes to
financial statements.
Punjab Rural Support Programme (PRSP)
»» PRSP has provided its audited accounts for the
reporting period to PMN. Ernst & Young Ford Rhodes
Sidat Hyder and Co. audited the annual accounts for
PRSP for the year ending at 30th June 2013.
»» Since PRSP is an integrated programme, the following
resource allocation process was followed:
i) The identified accounts for credit and noncredit functions were directly transferred to the
respective programs.
ii) All other accounts that were common to the
institution were transferred in the ratio of 60% to
credit and 40% to non-credit functions.
iii) 60% of PRSP’s investment income was credited to
its credit operations
»» All necessary adjustments to PRSP data have been
made in order to remove subsidies. Adjustment
for cost of borrowing was not made since it was
entirely commercial borrowing. Similarly, there is no
PRSP is aggressive in its provisioning policies.
»» PRSP prepares its financial statements under the
»» Data on distribution of clients in terms of the urbanrural mix is not provided in the disclosures. However,
given that PRSP only works in rural Punjab the
information can be accurately deduced. The data on
gender segregation was taken from the MIS and is not
available in notes to the accounts.
»» Data on number of staff for PRSP as a whole is
available. These numbers have been allocated
between credit and non-credit functions of PRSP on
the basis mentioned above. Data for credit officers
has been obtained from the organization’s MIS.
statements.
sustainability / profitability and asset/liability
Thardeep Rural Development Programme
(TRDP)
»» TRDP has provided its audited accounts for the
microfinance program (inclusive of credit and noncredit functions). Grant Thornton (Anjum Asim Shahid
Rehman) audited the annual accounts for TRDP for
the year ending at 30th June 2013.
»» All necessary adjustments to TRDP data have been
made in order to remove subsidies.
»» TRDP prepares its financial statements under
the historical cost convention in conformity with
organization’s MIS: i). rural-urban clients; ii). malefemale clients; iii). Number of staff; and iv). Number of
credit officers.
»» The ageing of portfolio (in rupee value and number of
loans) is taken from audited accounts.
Sindh Rural Support Organization (SRSO)
Sarhad Rural Support Programme (SRSP)
»» SRSP has provided its audited accounts for the
reporting period to PMN. KPMG (Taseer Hadi and Co)
audited the annual accounts for SRSP for the year
ending at 30th June 2013.
»» SRSP is a multi-dimensional development
organization. It has provided its integrated audited
accounts for the reporting period to PMN and has also
extracted accounts for its microfinance operations
from the consolidated audited statements.
»» All necessary adjustments to SRSP data have been
SRSP is aggressive in its policies and all loans > 90
days past due are 100% provisioned for.
»» SRSP prepares its financial statements under
»» SRSO has provided its audited accounts for the
microfinance program (inclusive of credit and noncredit functions). Ernst & Young Ford Rhodes Sidat
Hyder and Co. audited the annual accounts for SRSO
»» All necessary adjustments to PRSP data have been
PRSP is aggressive in its provisioning policies.
»» SRSO prepares its financial statements under
organization’s MIS: i). rural-urban clients; ii). malefemale clients; iii). Number of staff; and iv). Number of
credit officers.
»» The ageing of portfolio (in rupee value and number of
loans) is taken from audited accounts.
»» The ageing of portfolio in rupee value is not verifiable
from audited accounts. Both ageing on number of
loans and value of portfolio was obtained from
the MIS. However, there is proper disclosure on
the movement in portfolio and write-offs. It will be
valuable if SRSP could provide separate disclosure on
movement in provisioning of portfolio as suggested
previously.
»» Data on the number of total staff, loan officers and
branches has been drawn from audited accounts.
121
ANNEXURE D
ADJUSTMENTS TO
FINANCIAL DATA
RATIONALE
Adjustments to financial statements are made when
doing benchmark analysis. Adjustments 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-marketrate funding sources. Such factors distort an MFP’s
on-going performance.
»» To make the data of various MFPs comparable. Thus,
adjustments are made in order to bring organizations
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
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. Fixed
assets are capable of tracking the increase in price levels;
their monetary value is increased. 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 adjustment revenue
Multiply the prior year’s Net Fixed Assets by the current
year’s average annual inflation rate (Average Core CPI for
current financial year)
Formula:
NET FIXED ASSETS (PRIOR YEAR) X AVERAGE ANNUAL
INFLATION RATE (CURRENT FINANCIAL YEAR)
Inflation adjustment expense
Multiply the prior year’s Equity by the current year’s
average annual inflation rate, (Average Core CPI for current
year)
Formula:
EQUITY (PRIOR YEAR) X AVERAGE ANNUAL INFLATION RATE
(CURRENT YEAR)
122
Net inflation adjustment expense
Subtract the Inflation Adjustment Revenue from the
Formula:
INFLATION ADJUSTED REVENUE – INFLATION ADJUSTED
EXPENSE
B. Subsidies adjustment
Adjustments for three types of subsidies are made:
»» A cost-of-funds subsidy from loans at below-market
rates
»» Current year cash donations to fund portfolio and
cover expenses
»» 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.
Additionally, for multipurpose MFPs, an attempt to isolate
the performance of the financial services program is made
by removing the effect of any cross-subsidization. Cash
donations flowing through the income statement are
accounted for by reclassifying them below net operating
income on the income statement. Thus, adjustments for
cash donations are not made since these are handled
through a direct reclassification on the income statement.
This year no MFP has disclosed receipt of 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 subsidized 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
need to be adjusted. Client deposits are not adjusted.
Only loans that have a finite (1-5 years) term length are
adjusted. Subordinated debt and other quasi-equity
accounts are reclassified as ‘other equity’ on the balance
sheet.
The analyst must be careful 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 (12.5%) to make this adjustment.
Calculation of cost-of-funds subsidy
1. Calculate average balance for all 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
average from last year’s ending balance.
2. Multiply the average balance by the shadow market
rate
3. Compare with the amount actually paid in interest
and fees. If less “market” rate, impute the difference
(market price minus Financial Expense paid on
Borrowings) to the Subsidized 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 cost (book value) of donated/loaned-out
vehicles, machinery and buildings need to be included in
operating expenses. Expatriate staff salaries paid by 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 work-load/
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 on-going 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 program expense. The percentage may be selected on
the basis of sales proportion, management input, etc.
Calculation of in-kind subsidy
Sum of in-kind subsidies by operating expense account,
added to unadjusted numbers for each account.
C. Loan loss provisioning
PMN standardizes 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.
Calculation of loan loss provisioning
Step 1:
Multiply the PAR age categories by the following reserve
factors:
PAR up to 89 days no provisioning
PAR 91 – 180 x 0.50
PAR 181 – 360 x 1.00
Renegotiated loans x 0.50
Step 2:
Sum above reserve calculations. If sum is more than
current reserves make calculated reserve new Loan Loss
Reserve. If not, keep current reserves.
Step 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.
123
ANNEXURE E
TERMS AND DEFINITIONS
Age
Adjusted Portfolio at Risk > (30, 60, 90 Days)
Number of years an organization has been functioning as
a microfinance provider (MFP).
Indicates the credit risk of a borrower above the specified
number of days (30, 60, 90) past his/her due date for
installment payment.
Active Saving Account Balance
It is the average balance of savings per account (not per
depositor).
Formula:
Outstanding balance,
loans overdue > (30 or 60 or 90) Days
Adjusted Gross Loan Portfolio
Adjustment Expense
Total adjustment cost related to inflation, subsidized cost
of borrowing, loan loss provisioning and in-kind subsidies.
Adjusted Financial Expense Ratio
It is calculated by using standardized ageing-of-portfolio
technique. The principle of conservatism is used which is
why loan loss provision in audited accounts is greater than
the amount computed by the analyst.
Adjusted Cost per Borrower
In case of loan size differentials, generally 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:
Average Number of Active Borrowers
Adjusted Loan Loss Reserve
Formula:
Adjusted Financial Expense
Adjusted Average Total Assets
Adjusted Cost per Loan
Formula:
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
»» Other technical assistance paid for with donations
Average Number of Active Loans
Adjustment Expense Ratio
Formula:
Net inflation, in kind, loan loss provision and
subsidized cost-of-funds adjustment expense
NOTE: Imputed salaries should be used instead of salaries
actually received by such persons. For imputation, the
salary range that a local hire would get for the same level
of work-load/position should be used. Judgment is used
to decide whether or not the in-kind donation represents
a key input to the on-going operations of the MFP
Adjusted Financial Expense
Formula:
Adjusted Financial Expense on Borrowing
Personnel Expense + Administrative Expense
Adjusted Operating Expense Ratio
Formula:
124
It includes actual cost of borrowing and shadow cost of
subsidized funding.
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 subsidized 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
Adjusted Return on Equity
Formula:
Formula:
Adjusted Net Loan Loss Provision Expense
Adjusted Net Operating Income, net of taxes
Average Total Equity
Adjusted Total Expense
Loan loss provision expense calculated with standardized
ageing-of-portfolio technique. It is however ensured that
if the actual loan loss provision expense is higher than the
adjusted then the conservatism principle is followed.
Includes all actual and adjusted expenses related to
operations, cost of borrowings, loan losses and inflation
adjustment.
It includes actual operational expenses and in-kind
subsidy adjustments.
Adjusted Operating Expense Ratio
It indicates efficiency of an MFP’s loan portfolio.
Formula:
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
Adjusted Profit Margin
Adjusted Total Expense Ratio
Formula:
Adjusted (Financial Expense + Net Loan Loss Provision
Expense + Operating Expense) Cost
Average Total Assets
Average of opening and closing balance of Gross Loan
Portfolio (GLP).
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
It is average of opening and closing balance of active
borrowers.
Formula:
Formula:
[Active Borrowers (Opening Balance)
+ Active Borrowers (Closing Balance)]
2
Adjusted Net Operating Income
Adjusted Financial Revenue
Adjusted Return on Assets
Formula:
Adjusted Net Operating Income, net of taxes
Average Number of Active Loans
Average of opening and closing balance of active loans
Average Outstanding Balance
It indicates the average balance of loans outstanding.
Formula:
Adjusted Gross Loan Portfolio
Adjusted Number of Loans Outstanding
125
Average Outstanding Balance to Per Capita Income
Deposit-to-Gross Loan Portfolio Ratio
It measure of depth of outreach. The lower the ratio the
more poverty-focused the MFP.
It is inverse of the advance-to-deposit ratio.
Formula:
Formula:
Deposits
Average Outstanding Balance
Per Capita Income
Average Saving Balance per Saver
It indicates average amount of saving balance per saver.
Deposit-to-Total Asset Ratio
Indicates the percentage of assets financed through
deposits.
Formula:
Deposits
Total Assets
It is average of opening and closing balance of total assets.
Average Total Equity
It is average of opening and closing balance of total
equity.
Borrowers per Loan Officer
It measure of loan officer productivity. It indicates the
number of borrowers managed by a loan officer.
Equity-to-Asset Ratio
This is a simple version of the capital adequacy ratio as
it does not take in to 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
Formula:
Number of Active Borrowers
Number of Loan Officers
Borrowers per Staff
It measure of staff productivity. It indicates the number of
borrowers managed by the staff on average.
Formula:
Number of Total Personnel
Commercial Liabilities
It is principal balance of all borrowings, including overdraft
accounts, for which the organization pays a nominal rate
of interest that may be greater than or equal to the local
commercial interest rate.
Financial Expense
It is total of financial expense on liabilities and deposits.
Financial Revenue
It is total of revenue from loan portfolio and other
financial assets, as well as other financial revenue from
financial services.
Financial Revenue from Other Financial Assets
It is net gains on other financial assets.
Financial Revenue from Loan Portfolio
It is total interest, fees and commission on loan portfolio.
Financial Revenue Ratio
Commercial Liabilities-to-Gross Loan Portfolio Ratio
It indicates efficiency of an MFP’s loan portfolio.
Indicates the efficiency with which an MFP is utilizing its
assets to earn income from them.
Formula:
Formula:
Financial Revenue
All liabilities with “market” price
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.
126 Copyrights © 2014 · Pakistan Microfinance Network
Financial Self-Sufficiency
Formula:
Financial Revenue
Adjusted (Financial Expense + Net Loan Loss Provision
Expense + Operating Expense + Inflation Adjustment)
Net Adjusted Loan Loss Provision Expense
It is the outstanding principal for all outstanding client
loans, including current, delinquent and restructured
loans. It does not include:
»» Loans that have been written-off
It is 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.
»» Interest receivable
»» Employee loans
For accounting purposes GLP is categorized as an asset.
Gross Loan Portfolio-to-Total Asset Ratio
Indicates the efficiency of assets deployed in high yield
instruments/core business of an MFP.
Number of borrowers with loan amount outstanding.
Formula:
Total Assets
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) is treated as a cost of funds, is disclosed on the
income statement, and decreases net operating income.
Number of Active Loans
The number of loans that have been neither fully repaid
nor written off, and thus that are part of the MFP’s gross
loan portfolio.
Number of Active Women Borrowers
Number of women borrowers with loan amount
outstanding.
Inflation Rate
Number of Active Women Borrowers to total Active
Borrowers
Latest annualized consumer price index (CPI) as reported
by the State Bank of Pakistan.
It indicates percentage of women borrower to total active
borrowers.
Liabilities-to-Equity Ratio (debt-equity ratio)
Number of Loans Outstanding
Formula:
Total Liabilities
Total Equity
Loan Loss Provision Expense
on loan loss provision.
Loans per Loan Officer
Formula:
Number of Loan Officers
It is the number of loans outstanding at the end of the
reporting period. Depending upon the policy of an MFP
one borrower can have two loans outstanding; hence,
the number of loans could be more than the number of
borrowers.
Number of Savers
It is 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
Loans per Staff
It is the number of women savers with voluntary demand
deposit and time deposit accounts.
Formula:
Number of Personnel
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.
127
Operating Expense
Savers per Staff
It is total of Personnel Expense and Administrative
Expense.
Formula:
Number of Savers
Number of Personnel
Operational Self-Sufficiency
Formula:
Loan Loss Provision Expense
Financial Revenue
(Financial Expense + Net Loan Loss Provision Expense +
Operating Expense)
on loan loss provision.
Loans per Loan Officer
Per Capita Income
It is average income per person.
Formula:
PAR > 30 Days
Percentage of Women Savers to Total Savers
It indicates the percentage of women in the total saving
portfolio.
Personnel
It is 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
organization, 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 2/3 of his/
her time with the MFP is accounted for as 2/3 of a fulltime employee.
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 organization net of what
it owes (liabilities). Equity accounts are presented net of
distributions, such as dividends.
Formula:
Personnel Allocation Ratio
Total Assets – Total Liabilities
The higher the indicator the more lean the head office
structure of the organization. This indictor is used to
measure organizational efficiency.
Total Liabilities
Formula:
Loan Officers
Total Staff
Risk Coverage Ratio
Indicates the provision created by an MFP against its
credit risk.
Formula:
PAR > 30 Days
Saving Outstanding
Total value of demand deposit and time deposit accounts.
Liabilities represent the borrowings of an organization i.e.,
the amount owed. Examples of liabilities include loans,
and deposits. This number includes both interest and noninterest 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.
Loan Written Off during Year
It is the value of loans written off during the year.
128
Write-Off Rate
Formula:
Loans written off during the year
Yield on Gross Portfolio (Nominal)
Indicates the yield on an MFPs loan portfolio and is
usually used as a proxy to look at MFPs (realized) effective
interest rate.
Formula:
Financial Revenue from Loan Portfolio
Yield on Gross Portfolio (Real)
It is 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)
129
130
Target
market
Development
goals
1.0
2.0
Indicators
Type of clients
Goals
Women
Poverty
reduction
Declining interest
2
Increased access
1 to financial
services
Ranking
3
1
Clients living in
rural areas
Clients living in
2
urban areas
Ranking
KBL
Social Performance Indicators
Microfinance Banks
2
Poverty
reduction
Goals
Declining interest
Growth of
existing
Gender equality
4 and women's
empowerment
3
Goals
Women
Employment
generation
Declining interest
Increased access
to financial
4
3
Poverty
reduction
2
Growth of
1 existing
businesses
Ranking
3
Women
Clients living in
rural areas
Type of clients
POMFB
Clients living in
urban areas
Clients living in
2
rural areas
1
Ranking
Clients living in
urban areas
Type of clients
TMFB
Increased access
2 to financial
services
1
Ranking
3
1
Ranking
Growth of
existing
Development of
4 start-up
enterprises
Declining interest
8 Housing
Health
improvement
Children's
schooling
6
7
Employment
generation
5
3
2
Poverty
reduction
Goals
Increased access
1 to financial
services
Ranking
Other:
4 Government
pensioners
Adolescents and
youth (below
18)
5
3
Women
Type of clients
FMFBP
Clients living in
rural areas
Clients living in
2
urban areas
1
Ranking
2
Poverty
reduction
Goals
Declining interest
Development of
start-up
Growth of
4 existing
businesses
3
Women
Clients living in
urban areas
Clients living in
rural areas
Increased access
2 to financial
services
1
Ranking
3
1
Type of clients
NRSP-B
Ranking
Type of clients
AMFB
Health
improvement
Flat interest
Children's
schooling
4
4
Youth
opportunities
Improvement of
adult education
4
4
Increased access
3 to financial
services
2 Housing
1
Employment
generation
Poverty
reduction
Goals
Development of
start-up
Growth of
1 existing
businesses
1
1
Ranking
Clients living in
rural areas
Clients living in
2
urban areas
1
Ranking
Employment
generation
Growth of
4 existing
businesses
Declining interest
Gender equality
5 and women's
empowerment
3
2
Poverty
reduction
Goals
.
Women
Increased access
1 to financial
services
Ranking
3
Clients living in
urban areas
Clients living in
2
rural areas
1
Type of clients
FINCA MFB
Ranking
Flat interest
Employment
generation
Declining interest
5
Poverty
reduction
Gender equality
4 and women's
empowerment
3
Growth of
2 existing
businesses
Goals
Increased access
1 to financial
services
Ranking
Clients living in
rural areas
Clients living in
2
urban areas
1
Type of clients
U-Bank
Ranking
2
Women
Youth
opportunities
Declining interest
3
Development of
3 start-up
enterprises
Increased access
2 to financial
services
1
Employment
generation
Poverty
reduction
Goals
Clients living in
urban areas
Clients living in
rural areas
Type of clients
PPCBL
Growth of
existing
Gender equality
1 and women's
empowerment
1
1
Ranking
3
1
Ranking
2.0 Development Goals
1.0 Target Market
Type of Clients
AKHU
Goals
8 Children's schooling
7 Health improvement
6 Housing
5 Gender equality and
women's empowerment
4 Growth of existing
businesses
3 Development of start-up
enterprises
2 Employment generation
1 Poverty reduction
Ranking
4 Clients living in rural areas
3 Adolescents and youth
(below 18)
2 Women
1 Clients living in urban
areas
Ranking
Microfinance Institutions
Indicators
2 Employment
generation
2 Poverty reduction
businesses
1 Increased access to
financial services
Ranking
Goals
Type of Clients
ASA-P
1 Women
Ranking
enterprises
women's empowerment
1 Youth opportunities
businesses
1 Poverty reduction
Goals
financial services
Ranking
Other: Clients living
1 below the national
poverty line
2 Adolescents and youth
(below 18)
1 Clients living in rural
areas
areas
Type of Clients
ASASAH
1 Women
Ranking
Increased access to
financial services
8
7
Development of start-up
enterprises
Growth of existing
businesses
4
2
Gender equality and
women's empowerment
Goals
1 Poverty reduction
Ranking
areas
areas
Type of Clients
BRAC
1 Women
Ranking
Gender equality and
women's empowerment
Development of start-up
5
enterprises
4
2
Growth of existing
businesses
Goals
1 Poverty reduction
Ranking
areas
areas
Type of Clients
CSC
1 Women
Ranking
DAMEN
Gender equality and
4 women's
empowerment
financial services
businesses
Goals
1 Poverty reduction
Ranking
areas
1 Women
Ranking Type of Clients
6 Development of startup enterprises
Capacity building of
7 community and
institutions
5 Employment
generation
businesses
Gender equality and
3 women's
empowerment
financial services
Goals
1 Poverty reduction
Ranking
Other: Minorities and
4 persons with
disabilities
areas
areas
Type of Clients
FFO
1 Women
Ranking
businesses
1 Water and sanitation
Gender equality and
1 women's
empowerment
1 Employment
generation
Goals
1 Poverty reduction
Ranking
areas
areas
Type of Clients
GBTI
1 Women
Ranking
4 Employment
generation
businesses
financial services
1 Poverty reduction
Goals
areas
areas
Ranking
KF
4 Employment
generation
Gender equality and
3 women's
empowerment
2 Poverty reduction
Goals
financial services
Ranking
areas
1 Women
OCT
3 Poverty reduction
2 Employment
generation
Goals
Ranking
areas
2 Women
areas
OLP
3 Employment
generation
businesses
2 Poverty reduction
Goals
financial services
Ranking
areas
areas
1 Women
Type of Clients Ranking Type of Clients Ranking Type of Clients Ranking Type of Clients
JWS
1 Women
Ranking
5 Improvement of adult
education
5 Housing
2 Employment
generation
Gender equality and
1 women's
empowerment
businesses
1 Poverty reduction
Goals
financial services
Ranking
3 Adolescents and
youth (below 18)
2 Other: Semi urban
areas
areas
Type of Clients
RCDS
1 Women
Ranking
SSF
Goals
businesses
3 Poverty reduction
financial services
Gender equality and
1 women's
empowerment
Ranking
areas
2 Women
areas
Ranking Type of Clients
SDF
businesses
3 Employment
generation
Gender equality and
2 women's
empowerment
Goals
1 Poverty reduction
Ranking
areas
1 Women
WASIL
Gender equality and
3 women's
empowerment
businesses
financial services
1 Employment
generation
Goals
1 Poverty reduction
Ranking
areas
1 Women
Ranking Type of Clients Ranking Type of Clients
women's empowerment
enterprises
businesses
1 Poverty reduction
Goals
financial services
Ranking
areas
Type of Clients
AGAHE
1 Women
Ranking
OPD
businesses
Gender equality and
2 women's
empowerment
Goals
1 Poverty reduction
Ranking
2 Women
areas
MICRO-OPTIONS
8 Housing
6 Employment
generation
businesses
Gender equality and
3 women's
empowerment
financial services
Goals
1 Poverty reduction
Ranking
4 Improvement of adult
education
3 Employment
generation
Gender equality and
1 women's
empowerment
businesses
1 Poverty reduction
Goals
financial services
Ranking
areas
2 Adolescents and
youth (below 18)
5 Adolescents and
youth (below 18)
areas
2 Women
1 Other: Persons with
disabilities
Type of Clients
MOJAZ FOUNDATION
Ranking
areas
areas
1 Women
Ranking Type of Clients Ranking Type of Clients
SVDP
AMRDO
businesses
Gender equality and
3 women's
empowerment
2 Employment
generation
Goals
1 Poverty reduction
Ranking
Gender equality and
5 women's
empowerment
businesses
3 Employment
generation
financial services
Goals
1 Poverty reduction
Ranking
5 Adolescents and
youth (below 18)
4 Other: Medium
enterprises
areas
2 Women
Other: Agriculture,
3 livestock, small size
business, renewable
energy
2 Women
areas
areas
NAYMET TRUST
Goals
1 Poverty reduction
Ranking
1 Other: Both men and
women
NRDP
Gender equality and
7 women's
empowerment
financial services
4 Employment
generation
businesses
Goals
1 Poverty reduction
Ranking
2 Women
areas
businesses
women's empowerment
enterprises
Goals
1 Poverty reduction
Ranking
areas
Type of Clients
BEDF
1 Women
Ranking Type of Clients Ranking Type of Clients Ranking Type of Clients Ranking Type of Clients Ranking
131
132
Compulsory
insurance
Does MFP measure
poverty
9.0
###
Transparency of
cost of services to
If yes, poverty
9.1
measurement tool
Non-financial
services offered
8.0
Other financial
7.0
services offered
If yes, type of
6.1 compulsory
insurance required
6.0
If yes, savings
5.1
products offered
5.0 If MFP takes savings
Credit
4.0 products/services
offered
3.0 Poverty target
AKHU
expenditure
USAID Poverty
Flat interest
Declining balance interest N/A
Own proxy poverty index
Poverty Scorecard
provided by Pakistan
Poverty Alleviation Fund
(PPAF)
Means test
income
Ranking (PWR)
Housing index
Food security index
expenditure
Grameen Progress out of
Poverty Index (PPI)
Yes
Health services
Women empowerment
services
None offered
No
No
Housing loans
Poverty Index (PPI)
Yes
No
Women empowerment
services
Health services
Education services
Enterprise services
Microleasing
Other
Mobile banking services
Savings facilitation
services
Remittance services
Debit/Credit Card
Other
Agricultural insurance
Credit life insurance
Yes
No
Voluntary savings
accounts
Compulsory savings
accounts (cash collateral)
Fixed term deposits
Special purpose savings
accounts
Other
Checking accounts
Yes
No
Other
Housing loans
Loans for education
Loans for agriculture
Loans for education
SME loans
Microcredit loans for
microenterprises
Microcredit for other
household
needs/consumption
microenterprises
household
needs/consumption
Very poor clients
Very poor clients
Poor clients
Poor clients
Low income clients
No specific poverty target
Microfinance Institutions
Indicators
ASA-P
ASASAH
N/A
Poverty Index (PPI)
Poverty Scorecard
(PPAF)
Flat interest
Yes
None offered
Other: Repayments
through branchless
banking
Khushhal beema in
partnership with Telenor
Yes
No
Other: Islamic products
Very poor clients
Poor clients
Yes
None offered
None offered
No
No
microenterprises
Poor clients
Low income clients
BRAC
SME loans
Flat interest
Ranking (PWR)
income
expenditure
Yes
Women empowerment
services
Health services
Education services
Enterprise services
None offered
No
No
microenterprises
household
needs/consumption
Very poor clients
Poor clients
Low income clients
CSC
Flat interest
Poverty Scorecard
(PPAF)
Yes
Women empowerment
services
Health services
Education services
Enterprise services
None offered
Yes
No
microenterprises
Poor clients
DAMEN
FFO
GBTI
microenterprises
Very poor clients
Poor clients
Low income clients
Poverty Scorecard
(PPAF)
Yes
Enterprise services
Women empowerment
services
services
Yes
No
JWS
Poverty Scorecard
(PPAF)
Yes
Health services
Enterprise services
None offered
Other: Health insurance
Yes
No
microenterprises
Low income clients
Declining balance interest Flat interest
Poverty Scorecard
(PPAF)
Yes
Women empowerment
services
Health services
Education services
Enterprise services
None offered
Other: Health insurance
Yes
No
Other: Financial support to
Other: Loans for livestock
village banks through
credit lines
microenterprises
Very poor clients
Poor clients
Low income clients
Poverty Scorecard
(PPAF)
Yes
Women empowerment
services
Health services
Education services
Enterprise services
None offered
Yes
No
microenterprises
Poor clients
Low income clients
KF
Education services
Flat interest
income
expenditure
Yes
Women empowerment
services
Enterprise services
Other: Repayments
through branchless
banking
Yes
No
microenterprises
Low income clients
OCT
Flat interest
Poverty Index (PPI)
Yes
Enterprise services
Women empowerment
services
None offered
No
No
Loans for education
microenterprises
Low income clients
OLP
Flat interest
Yes
None offered
Microleasing
Yes
No
microenterprises
SME loans
Poor clients
Low income clients
RCDS
Flat interest
Poverty Scorecard
(PPAF)
Ranking (PWR)
Poverty Index (PPI)
Yes
Women empowerment
services
Health services
Education services
Enterprise services
Other: Repayments
through branchless
banking
Other: Client death
coverage
Yes
No
microenterprises
household
needs/consumption
Poor clients
Low income clients
SSF
SDF
microenterprises
household
needs/consumption
Poor clients
Low income clients
Flat interest
Poverty Scorecard
(PPAF)
Yes
None offered
None offered
No
No
Flat interest
Ranking (PWR)
Poverty Index (PPI)
Yes
Women empowerment
services
Health services
Education services
Enterprise services
None offered
Yes
No
Loans for education
Other: Loans for livestock Loans for agriculture
microenterprises
Poor clients
Low income clients
WASIL
Flat interest
income
Yes
Women empowerment
services
Health services
Education services
Enterprise services
None offered
No
No
microenterprises
Poor clients
Low income clients
AGAHE
Education services
Flat interest
Poverty Scorecard
(PPAF)
Yes
Women empowerment
services
Enterprise services
None offered
Yes
No
microenterprises
Poor clients
Low income clients
OPD
Flat interest
Housing index
income
expenditure
Yes
None offered
None offered
No
No
microenterprises
Low income clients
MICRO-OPTIONS
Flat interest
Poverty Scorecard
(PPAF)
Yes
Women empowerment
services
None offered
No
No
Other: Loans for solar
energy
Other: Loans for biogas
Loans for education
microenterprises
Poor clients
Enterprise services
Flat interest
Poverty Scorecard
(PPAF)
Yes
Women empowerment
services
Education services
None offered
Yes
No
microenterprises
MOJAZ
FOUNDATION
Poor clients
Low income clients
SVDP
AMRDO
microenterprises
household
needs/consumption
Poor clients
Low income clients
Poverty Scorecard
(PPAF)
Housing index
Yes
Education services
Women empowerment
services
None offered
No
No
Flat interest
Poverty Scorecard
(PPAF)
expenditure
Poverty Index (PPI)
Yes
None offered
None offered
Other: Livestock valueadded insurance
Yes
No
Other: Loans for
Loans for education
handicrafts
Other: Loans for renewable
energy
Other: Loans for livestock Loans for agriculture
microenterprises
Very poor clients
Poor clients
Low income clients
NAYMET TRUST
Flat interest
Poverty Index (PPI)
Yes
Women empowerment
services
Health services
Education services
Enterprise services
None offered
Yes
No
microenterprises
Low income clients
NRDP
Flat interest
Poverty Scorecard
(PPAF)
Yes
Women empowerment
services
Health services
Education services
Enterprise services
None offered
No
No
microenterprises
Poor Clients
Low Income Clients
BEDF
Education services
Flat interest
Poverty Scorecard
(PPAF)
Yes
Women empowerment
services
Enterprise services
None offered
No
No
microenterprises
Very Poor Clients
Poor Clients
Low Income Clients
Target Market
2.0 Development Goals
1.0
Type of clients
NRSP
Goals
Clients living in
urban areas
Women
5
Other: Community
3 productive physical
infrastructure
Gender equality and
3 women's
empowerment
3
Increased access to
financial services
Growth of existing
businesses
Improvement of
8
adult education
4
Improvement of
adult education
Growth of existing
businesses
3
Employment
generation
Goals
Women
Clients living in rural
areas
Type of clients
PRSP
1 Poverty reduction
Gender equality and
2 women's
empowerment
Ranking
2
1
Ranking
Increased access to
financial services
3
3
Employment
generation
2
1 Poverty reduction
Ranking
4
3
1
areas
Other: Members of
2 community
organizations
Ranking
Rural Support Programmes
Indicators
Increased access to
financial services
5
Growth of existing
businesses
Gender equality and
3 women's
empowerment
Development of start4
up enterprises
2
Goals
Clients living in
urban areas
areas
Type of clients
Women
1 Poverty reduction
Ranking
3
2
1
Ranking
SRSP
Employment
generation
Increased access to
financial services
Development of startup enterprises
Growth of existing
businesses
7 Housing
Gender equality and
6 women's
empowerment
5
4
3
2
Goals
Clients living in
urban areas
Women
Type of clients
areas
1 Poverty reduction
Ranking
3
2
1
Ranking
TRDP
Development of startup enterprises
Employment
generation
Increased access to
financial services
4 Housing
2
Growth of existing
businesses
Gender equality and
1 women's
empowerment
1
1
1
Goals
areas
Clients living in
urban areas
Type of clients
Women
1 Poverty reduction
Ranking
3
2
1
Ranking
SRSO
133
134
Poverty Target
Credit
products/services
offered
If MFP takes savings
If yes, savings
products offered
Compulsory
insurance
3.0
4.0
5.0
5.1
6.0
Yes
No
Voluntary savings
accounts
Compulsory savings
accounts (cash collateral)
Fixed term deposits
Special purpose savings
accounts
Other
Checking accounts
Yes
No
Loans for education
Housing loans
Other
microenterprises
household
needs/consumption
SME loans
Very poor clients
Poor clients
Low income clients
Rural Support Programmes
Indicators
NRSP
PRSP
Yes
No
Other: Community
productive infrastructure
schemes (lift irrigation and
land leveling)
Yes
No
Other: Small integrated
infrastructure enterprise
microenterprises
microenterprises
Poor clients
Low income clients
SRSP
No
No
microenterprises
household
needs/consumption
Very poor clients
Poor clients
Low income clients
TRDP
Yes
No
microenterprises
household
needs/consumption
Low income clients
SRSO
Yes
Voluntary savings accounts
Yes
microenterprises
Poor clients
Low income clients
Non-financial
services offered
Does MFP measure
poverty
If yes, poverty
measurement tool
7.0
8.0
9.0
9.1
Means test
Poverty Scorecard
(PPAF)
expenditure
income
Ranking (PWR)
Housing index
Food security index
USAID Poverty
Poverty Index (PPI)
Yes
No
Women empowerment
services
Health services
Enterprise services
Education services
services
Remittance services
Microleasing
Other
Mobile banking services
Debit/Credit Card
Other
Health services
Ranking (PWR)
Yes
Women empowerment
services
Enterprise services
Education services
services
Poverty Scorecard
(PPAF)
Poverty Scorecard
(PPAF)
Flat interest
Yes
None offered
services
Yes
Education services
Health services
Women empowerment
services
None offered
Other: Life (accidental
death) and health
(hospitalization) insurance
Transparency of cost Declining balance interest Declining balance interest Declining balance interest
of services to clients Flat interest
Other financial
services offered
6.1
10.0
If yes, type of
compulsory
insurance required
Health services
Flat interest
Poverty Scorecard
(PPAF)
income
Yes
Women empowerment
services
Enterprise services
Education services
None offered
Other: Micro-health
insurance
Health services
Declining balance interest
Flat interest
Poverty Scorecard
(PPAF)
Yes
Women empowerment
services
Enterprise services
Education services
Other: Community
Investment Fund (CIF)
Other: Income Generating
Grant (IGG)
135
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Pakistan Microfinance Review 2013

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