pakistan microfinance review 2014

Transcription

PAKISTAN
MICROFINANCE REVIEW 2014
ANNUAL ASSESSMENT OF THE MICROFINANCE INDUSTRY
FINANCIAL SERVICES FOR ALL
Produced by Pakistan Microfinance Network
Design and Layout by O3 Interfaces
www.o3interfaces.com
Pakistan Microfinance
Review 2014
Annual Assessment
of the Microfinance Industry
Financial Services for all
Editorial Board
Mr. Ghalib Nishtar
Chairperson Editorial Board
President, Khushhali Bank Limited
(KBL)
Mr. Blain Stephens
COO and Director of Analysis
Microfinance Information eXchange,
Inc. (MIX)
Mr. Yasir Ashfaq
Group Head, Financial Services
Group, Pakistan Poverty Alleviation
Fund (PPAF)
Mr. Masood Safdar Gill
Pakistan Microfinance Review 2014
Director Program, Urban Poverty
Alleviation Program,
National Rural Support Programme
(NRSP)
i
Dr. Saeed Ahmed
Director, Agriculture Credit and
Microfinance Department,
State Bank of Pakistan (SBP)
Mr. Raza Khan
Statistics & Results Adviser,
Results & Evaluation TeamEconomic Growth Group,
Department for International
Development (UK)
Mr. Abrar Mir
SEVP & Group Executive Banking
Products Group,
United Bank Limited (UBL)
PMR Team
Mr. Ali Basharat
Author and Managing Editor
Mr. Ammar Arshad
Co–Author and Data Collection
Ms. Khadija Ali
Annual Assessment of the Microfinance Industry
Co–Author and Data Collection
ii
Acronyms and
Abbreviations
iii
AC &MFD
Agriculture and Microfinance Division
ADB
Asian Development Bank
AMRDO
Al-Mehran Rural Development Organization
AML
Anti-Money Laundering
BPS
Basis Points
CAR
Capital Adequacy Ratio
CIB
Credit Information Bureau
CDD
Customer Due Diligence
CGAP
Consultative Group to Assist the Poor
CNIC
Computerized National Identity Card
CPP
Client Protection Principles
CPI
Consumer Price Index
CPC
Consumer Protection Code
DFI
Development Financial Institution
DFID
Department for International Development, UK
DPF
Depositor’s Protection Fund
ECA
Eastern and Central Europe
ESM
Environment and Social Management
EUR
Euro
FATF
Financial Action Task Force
FIP
Financial Inclusion Program
FMFB
The First Microfinance Bank Ltd.
FSS
Financial Self Sufficiency
FY
Financial Year
G2P
Government to Person
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
MSME
Micro, Small and Medium Enterprises
MIV
Microfinance Investment Vehicle
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 Sufficiency
P2P
Person to Person
PAR
Portfolio at Risk
PBA
Pakistan Banks Association
PKR
Pakistan Rupee
PMN
Pakistan Microfinance Network
PO
Partner Organization
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
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
Acronyms and Abbreviations
iv
v

TMFB
Tameer Microfinance Bank Ltd
UBL
United Bank Limited
USD
United State Dollar
USSPM
Universal Standards for Social Performance Management
VDO
Village Development Organization
WPI
Wholesale Price Index
Did you know?
Pakistan Microfinance Industry has a
dedicated and robust Credit
Information Bureau (MF-CIB)
PMN VISION
Frontiers of Formal Financial Services
reach out to all
MISSION
Pakistan is ranked among the top 10
countries to have an enabling
environment for financial inclusion by
the Economist Intelligence Unit’s
Global Microscope report
Support the financial sector, especially
retail financial service providers, to
enhance their scale, quality, diversity
and sustainability in order to achieve
inclusive financial services
Did you know?
Pakistan has been called the
Laboratory of Innovation in
Branchless Banking by CGAP
Core Values
Collaboration
Innovation
Diversity
Empowerment
Transparency
Pakistan Microfinance industry now
has assets over PKR 100 billion
MACRO-ECONOMY
Number
of Active
Borrowers
14
0.6
Percentage
2014
USD
Billions of GLP
12
2.5
6 Months
KIBOR
10
Discount
Rate
Consumer
Price
Inflation
(Avergae)
08
06
2010
2011
2012
2013
03
02
1.5
Active borrowers in millions
3.5
16
2014
> 3 MILLION
active borrowers
3x
projected growth
Historical and Projected Growth of
Access to
Clearing House
Turnaround
Time
Active Borrowers
Amount in Millions
Retails
Deposits
Confidence
of Regulator
Availability of
Funds for
Mid-Sized MFPs
Microfinance Credit
Guarantee Facility
9.84
Yr 2019
Increase in
Growth
7.87
Yr 2018
Investor
Confidence
Draft NBMFI
Regulations
Mitigate External
Interference
6.30
Yr 2017
4.20
Yr 2015
Mainstreaming
Non-Bank MFPs
Policy & Regulatory
Achievements
5.04
Yr 2016
3.14
Yr 2014
2.35
Yr 2012
2.83
Yr 2013
2.05
Yr 2010
2.07
Yr 2011
CLIENT
PROTECTION
100%
Appropriate
Product Design & Delivery
Channels
100
80%
Mechanism for
Complaint Resolution
CAPITAL
STRUCTURE
5.3
Million Depositors
in 2014
Prevention of
Over-Indebtedness
60%
40%
80
20%
44%
60
Deposits
0%
Privacy of Client Data
Transparency
40
Debt
Fair & Respectful
Treatment of Clients
33%
Responsible Pricing
20
% of indicators that are not met
23%
0
Equity
% of indicators that are partially met
% of indicators that are fully met
ACTIVE BORROWERS BY URBAN/RURAL AREAS
Rural
2010
2011
2012
2013
2014
Center of
Excellence
Urban
0
10
20
30
40
50
60
Funding
58%
female borrowers
42%
Regulatory
framework for NBMFIs
male borrowers
Disaster
Risk Management
Highlights
Year
2010
2011
2012
2013
2014
1.6
1.7
2. 0
2.4
2.8
PKR 20.2
PKR 24.8
PKR 33.1
PKR 46.6
PKR 61.072
0.8
0.9
1.3
1.4
1.6
1,405
1,550
1,460
1,606
1,747
12,005
14,202
14,648
17,456
19,881
Total Assets
(PKR billions)
35.8
48.6
61.9
81.5
100.7
Deposits
(PKR billions)
10.1
13.9
20.8
32.9
42.72
Total Debt
(PKR billions)
27.5
38.3
24.9
26.9
31.1
Total Revenue
(PKR billions)
7.5
10.1
12.5
17.3
24.3
99.7
108.4
109.5
118.1
120.6
81.7
100.5
107.5
116.5
119.6
4.1
3.2
3.7
2.5
1.1
Active Borrowers
(in millions)
(PKR billions)
Active Women
Borrowers
(in millions)
Branches
Total Staff
OSS (percentage)
FSS (percentage)
PAR > 30 (percentage)
xi
Contents
01
10
THE YEAR IN REVIEW
INDUSTRY PERFORMANCE
Macro-economy and Microfinance Industry
01
Section 2A: Industry Performance
11
Policy and Regulatory Environment
02
Section 2B: Social Performance
27
Microfinance Industry Initiatives
04
Conclusion
07
THE WAY FORWARD
50
ANNEXURES
Inclusive Finance and Microfinance Industry
41
Performance indicators of industry
Towards Accelerated Growth
42
Performance indicators of individual MFPs
59
Adapting Government Credit Schemes
42
103
Impact Investment
43
Social Performance Indicators of Individual
MFPs
Diversifying Funding Sources
43
Regional Benchmarks
140
Capacity Building Program
44
Sources of Data
141
Micro, Small & Medium Enterprise (MSME)
Lending
45
Adjustment to Financial Data
152
Terms and Definitions
155
Anti-Money Laundering (AML), Customer
Due Diligence (CDD) and Terrorist Financing
46
Agriculture Value Chains
46
51
40
xii
Section 1
The Year in
Review
Section 1
The Year in
Review
The year 2014 saw the industry achieve a major milestone by crossing the 3 million active borrowers mark
for the first time. Overall, the industry witnessed
double digit growth in not only credit but also in savings and insurance.
Although the national economy grew at a modest
rate, the macroeconomic stability ensured a favorable environment for the players. Despite the persistent energy crisis and security challenges, positive economic indicators like lower inflation, falling
interest rates and uptake on private credit led to a
positive impact on the sector in terms of growth and
sustainability.
On the policy and regulatory side, the microfinance
banks (MFBs) have been allowed to become members of the national clearing house which will greatly
enhance their ability to mobilize their retail deposits. In addition, to facilitate mid-tier players to raise
funds from commercial sources, risk coverage under
the Microfinance Credit Guarantee Fund (MCGF) was
enhanced to 60 percent by the State Bank of Pakistan
(SBP). One of key challenge facing the industry has
been the lack of a regulatory umbrella for the nonbank microfinance providers (MFPs). In this regard,
the last year saw the Securities and Exchange Commission of Pakistan (SECP) sharing a draft of proposed regulations with players for comments.
Among other major developments in the sector last
year an industry risk register is being developed by
the Pakistan Microfinance Network (PMN). In addition, branchless banking continues to witness growth
and the Microfinance Credit Information Bureau (MFCIB) is fully operational with most of the MFPs generating enquiries. The PM Interest Free Loan Scheme
announced in 2013 was formally launched last
year through the Pakistan Poverty Alleviation Fund
(PPAF), with an aim of reaching out to 1 million clients
in the next three years. As part of the responsible finance initiative, client protection assessments were
carried out under the SMART campaign.
Macro-economy and the Microfinance Industry
1
The year 2014 was a better year for Pakistan’s economy as it witnessed lower than expected inflation,
reduction in fiscal deficit and improvement in private
sector credit. In addition, the overall economy grew
by 4.1 percent compared to the 3.7 percent in 2013.
However, this was less than the target of 4.4 percent
for the year 2014.
Inflation for the year clocked at 8.6 percent - higher than the previous year’s 7.4%, but lower than the
expected rate of 11-12 percent. However, despite
the lower inflation, the central bank took a cautious
approach to monetary policy with the policy rate remaining constant for the better part of the year.
The end of the year saw the policy rate cut by 50 bps
taking it from 10 percent to 9.5 percent as shown in
Exhibit 1.1. This trend which continued in early 2015,
would likely result in the lowering of borrowing costs
of Microfinance Providers (MFPs).
Another positive for the year was the uptake in private sector credit growth which registered a double
digit growth of 11.4 percent. This increase which was
the highest in the last six years came on the back of
an increased supply of loanable funds, improvement
in business confidence and lower effective cost of
borrowing. This augurs well for MFPs which are witnessing increased dependence upon commercial borrowing to meet their funding needs.
The Year in Review
Discount Rate
6 -Months KIBOR
Consumer Price Inflation (Average)
16
Percentage
14
12
10
8
6
4
2
2010
2011
2012
2013
2014
Exhibit 1.1: Policy Rate, 6-Month KIBOR and CPI
Policy and Regulatory Environment
SBP is among the pioneer regulators who rolled out
regulations for branchless banking in 2008. These
regulations spurred a growth in the branchless banking arena. Over eight branchless banking systems
are in operation in the country which are providing a
wide array of services including savings, Government
to Person and Person to Person payments leading to
Pakistan being called the ‘Laboratory for Innovation’
in Branchless Banking .
The key developments on the policy and regulatory
environment for the year 2014 are as follow:
Clearing House Membership
A key challenge faced by the MFBs in mobilizing deposits has been the absence of membership of the
national clearing house. Lack of membership of the
clearing house meant that MFBs had to rely on commercial banks for clearance of their payments which
led to increased turnaround time. This had badly affected the practitioners’ ability to mobilize retail deposits and forced them to rely on expensive and volatile fixed deposits acquired at above market rates.
Clearing house membership has been on the agenda
of policy makers for a while and early this year, MFBs
have been allowed to become part of the clearing
house under a special category by the central bank.
This will enable MFBs to reduce the processing time
for payments and be able to attract retail deposits
in an effective manner. Moreover, it would lead to
growth in deposits and reduce reliance of MFBs on
expensive fixed deposits resulting in reduction in cost
of funds.
Non-Bank MFP Regulations
A key challenge facing the microfinance industry in
Pakistan has been the absence of regulatory and legal cover for the non-bank MFPs. Though these organizations are among the pioneers of microfinance in
the country they have witnessed their market share
shrink over the years. One of the main reasons for
Pakistan’s regulatory environment for microfinance
continues to be ranked among the best in the world.
Microfinance Banks (MFBs) established under the
MFI Ordinance 2001 and regulated by the State Bank
of Pakistan (SBP) currently account for 70 percent of
the asset base of the microfinance industry and have
witnessed huge investor interest as evident from the
series of acquisitions that have taken place over the
last few years. In order to create a level playing field
for the industry, non-bank microfinance providers are
also being brought under the regulatory umbrella.
This would allow non-bank MFPs to grow, transform
into stronger institutes and attract investments for
further expansion. The details of these proposed regulations are discussed in a subsequent section.
2
Section 1
this has been lack of regulatory umbrella. Due to
this non-bank MFPs have found it difficult to attract
commercial financing. Moreover, this has resulted in
a lack of recourse mechanism for clients and practitioners and the non-bank MFPs have remained vulnerable to the risk of external interference.
Keeping in view the above, a steering committee was
formed in 2012 chaired by Chairman Securities and
Exchange Commission of Pakistan (SECP) that included all key stakeholders of the industry like SBP,
Pakistan Poverty Alleviation Fund (PPAF), PMN and
key MFPs to extend legal and regulatory cover for the
non-bank MFPs. Last year a draft of proposed regulations were shared with the players for their feedback. A summary of the main points raised by the
players and PMN is as follows:
3
•
It is hoped that SECP shall play a stewardship
role post-regulations similar to that of SBP in
case of MFBs.
•
A liberal interest rate regime for non-bank MFPs
should be followed that focuses on market instruments of competition and full disclosures as
followed by SBP.
•
The current and proposed Non-Bank Financial
Companies (NBFC) laws do not adequately cater to the microfinance sector as they do not
provide for micro-financing as a distinct form
of business carried out by NBFCs. Certain conditions and requirements of the NBFC Laws are
not realistic when taken in the context of the
working microfinance industry in Pakistan; thus,
there is a need for microfinance to be treated as
a distinct class of NBFCs and specific regulations
applicable upon them are required.
•
With the exception of one non-bank MFP, all
others are not for profit entities and many of
them would like to continue as non-profit under
the proposed regulatory framework. Therefore
the proposed regulatory framework, in addition
to designating NBMFIs as a specific class of
NBFCs, should allow for the creation of a further
distinction in the NBFC Laws between “for profit” non-bank MFP and “not for profit” non-bank
MFPs.
•
Since the proposed regulations cater for the establishment of a consultative group with representatives of the sector to review the regulations
and restrictions, limits, requirements, criterion,
etc. it has been proposed that the consultative
group meet with SECP every six months to bring
the regulator and the industry on the same page
and to revise the regulations as the industry
evolves.
It is hoped that regulations will come into effect by
the end of 2015 with adequate time being provided
for non-bank MFPs to conform to their requirements.
These regulations will play a role of catalyst for this
segment of the microfinance industry to attract both
debt and equity capital from the private sector and
be recognized as a mainstream part of the financial
landscape in Pakistan.
Amendments in Microfinance
Credit Guarantee Facility
(MCGF)
MCGF was launched in 2009 under the auspices of
the Financial Inclusion Program (FIP) with the aim of
boosting commercial funding to the industry by offering partial risk coverage to lenders. In order for the
sector to become sustainable and grow into a viable
part of the financial industry, commercial funding is
undeniably important. Initially MFBs and later, MFIs
and RSPs were allowed to utilize the facility to obtain loans from commercial banks and also issue redeemable capital. However, the uptake of the facility
among small and mid-sized MFBs was low as many
had riskier profiles compared to their larger, more established peers.
SBP recently revised guidelines regarding the MCGF
in order to facilitate and promote lending from commercial financial institutions for small to mid-sized
MFPs. In this regard, a tiering criterion has been developed and the risk coverage for the lender has been
enhanced.
Initially under the MCGF, 25 percent first loss guarantee or 40 percent partial guarantee was provided
in case of bilateral loans or redeemable capital to the
lenders. However, now in the case of bilateral loans
to Tier 2 MFPs, 60 percent partial guarantee is now
being provided. Tier 2 MFPs are defined as those entities that have been in business for 3 years instead
of 5 years which is a criterion for Tier 1 MFPs and
have a GLP above PKR 500 million as compared to
PKR 3 billion for Tier 1. Among other conditions, the
Tier 2 MFP needs to have an improving trend in its
return on assets (ROA) for the past three years and
for last year the ROA needs to be greater than -10
percent. In addition, the Portfolio at Risk (PAR) > 30
days also needs to below 10 percent.
These amendments will likely lead to enhancement
in lending to small and mid-sized MFPs which are
largely reliant on funding from the national apex and
The Year in Review
have yet to initiate commercial borrowing relationships. This would allow them to not only enhance
but also diversify their funding sources leading to in-
crease in outreach and upscaling of loan sizes.
Microfinance Industry Initiatives
Risk taking is an inherent element of financial services, and like all financial institutions, microfinance
providers (MFPs) face risks that they must manage
effectively to achieve their financial and social objectives. Poorly managed risks can lead to losses endangering the safety and soundness of microfinance
institutions. Hence, it is imperative for microfinance
providers to have a formal risk management structure in place to counter potential threats.
As part of PMN’s long term strategy to achieve sustainable growth in the Pakistan microfinance sector,
the Network is taking constructive steps to promote
sound risk management practices among microfinance practitioners. One initiative PMN has underway is the development of a comprehensive risk register for the microfinance sector in Pakistan.
A risk register is a tool widely used by organizations
for the identification and assessment of risks. The
tool is considered a vital component of the risk management process which serves as a central source for
the organization’s risk information and acts as a risk
directory. The tool is used by organizations to list various risks, highlighting their probability and severity
of impact, along with possible risk mitigation steps
and strategies.
PMN is of the opinion that such a tool will enable
MFPs (especially those with no existing risk management structures in place) to understand the nature
of risks faced by the institutes at the departmental and strategic level. The risk register will provide
management and key stakeholders with significant
information on various threats, which can be utilized
to design risk management strategies to mitigate
potential threats.
Prime Minister Interest Free
Loan Scheme
The Government of Pakistan (GoP) launched an interest-free microloan scheme last year to address the
issues of poverty and rising unemployment in the
country. Under the scheme, PKR 3.5 billion were earmarked for the poor and destitute segments of the
population. Initially, the industry stakeholders were
apprehensive about the scheme as it could have
distorted the market for conventional microfinance.
However, in order to safeguard the interest of the
MFPs it was decided that the funds for the scheme
would be routed through the national apex, PPAF and
loans will be extended to those individual who fall below 40 on the poverty scorecard. In order to mitigate
the overlap between interest free loans and conventional microloans, the loans under this scheme would
only be extended in Union Councils that have low or
no penetration of conventional microfinance.
Currently, 24 MFPs have partnered with PPAF in extending interest free loans under this scheme. It is
hoped that the scheme would lead to over 1 million
additional active borrowers over the next three years.
Since this scheme is targeted toward those areas
where conventional microfinance has little or no penetration, it provides MFPs an opportunity to expand
outreach in newer geographic markets. Moreover, it
has the potential to allow for borrowers of interest
free loans to graduate to conventional microfinance.
This is ensured as the interest free loan would be
provided only once to an individual and after the
completion of the first cycle he/she would be eligible
only for a conventional microfinance loan. Lastly in
an industry that views funding as one of the key constraints to growth, it is felt that despite the skepticism, this scheme can be useful for the industry with
change in design and understanding that the interest
free loan program can help in graduation of clients
to the next level and mainstreaming them into the
microfinance segment.
Client Protection Assessments in
collaboration with the SMART
Campaign
Third-party client protection assessments using the
SMART Campaign’s Smart Assessment Tool were
conducted for six MFPs during the year in review. In
total, 18 assessments have been conducted since the
inception of the Client Protection Initiative (CPI), cov-
Risk Register
4
Section 1
ering over 70 percent of the market in terms of overall outreach to active borrowers. These assessments
were made possible with funding support from the
SBP through the DFID-sponsored FIP. The assessments provide a unique opportunity for PMN to observe the state of practice in client protection among
member MFPs; for some of the key findings see Box
1.1. For participating MFPs, the assessments provide
an opportunity to evaluate their practices in comparison with globally accepted standards of client protection, and seek recommendations for institutional
improvements to better comply with the standards.
They also indicate whether an institution is ready to
pursue SMART Certification, a designation recognized
across the global market that an institution successfully integrates Client Protection Principles into their
practices. After undergoing an assessment through
the CPI project and acting on its results, one MFP be-
came the first in Pakistan to achieve SMART Certification in 2014.
Microfinance–Credit
Information Bureau (MF-CIB)
The Microfinance Credit Information Bureau (MF-CIB)
was launched nation-wide in 2012, with the support
of SBP, PPAF, Department for International Development (DFID) and International Finance Corporation
(IFC). It was aimed at mitigating the various challenges faced by the microfinance sector ranging from information asymmetry, adverse selection, and moral
hazard to over-indebtedness due to multiple borrowing. The delinquency crisis in India’s Andhra Pradesh
(2009) and Pakistan’s Punjab (2008-9) also served as
stark reminders for the industry to institutionalize
Box 1.1
State of Practice in Client Protection
In 2014, PMN conducted analysis of the state of sector in client protection. It is based first 10 third-party assessments
of member MFPs, out of which 5 were for MFIs and 5 were for MFBs. To arrive at this summary, an average was taken
for scores against each client protection principle across these MFPs.
This first look at the state of the sector in client protection provides substantial evidence that clients are kept at the
center of microfinance in Pakistan. At the broad level, the results indicate that MFPs are performing well on the client
protection principles of [1] appropriate product design and delivery, [2] prevention of over-indebtedness, [3] transparency, and [4] responsible pricing (see: graph below). At the same time, the results also reflect weakness in certain
areas, particularly CP principles of privacy of client data and mechanisms for complaints resolution. There are opportunities for improvement in these principles, as well as in certain indicators within the principle of fair and respectful
treatment of clients.
Appropriate
Product Design & Delivery
Channels
100%
80%
Mechanism for
Complaint Resolution
Prevention of
Over-Indebtedness
60%
40%
20%
5
0%
Privacy of Client
Data
Transparency
Fair & Respectful
Treatment of Clients
% of indicators that are fully met
Responsible Pricing
% of indicators that are partially met
% of indicators that are not met
The Year in Review
the use of the Bureau as an integral part of the loan
approval process in order to manage credit risk and
assess credit worthiness.
it allows for provision of financial services at lower
costs than the traditional banking structures making
it an ideal channel for reaching out to the unbanked.
Over the past three years, the MF-CIB has gradually
matured into a reliable risk mitigation tool and has
been gradually integrated into the ecosystem of the
sector. The enquiry numbers in the year 2014, barring a seasonal decline, showed an upward trend as
shown in Exhibit 1.2.
Branchless banking in Pakistan continued to expand
in the year 2014 with over 60% increase in the value
of transactions which reached PKR 375.9 billion as
compared to PKR 234.6 billion in December, 2013. The
number of transactions exhibited over 23% increase
reaching to 66.8 million from 54.1 million in at the
end of 2013. A 35.6% increase was also observed in
Enquries in Thousands
160
140
120
110
80
60
40
20
Jan 14
Feb 14
Mar 14
Apr 14
May 14
Jun 14
Jul 14
Aug 14
Sep 14
Oct 14
Nov 14
Dec 14
Exhibit 1.2: Yearly trend in MF-CIB enquiries
Attention is also being paid to improve the governance structure of the Bureau and make it more
inclusive and representative. The Credit Bureau Act,
which is expected to be ratified by the Parliament this
year, will also result in increased transparency from
the service provider’s perspective. The pricing mechanism is being scrutinized and PMN is working with
the Bureau and MFPs to create a framework for determining prices in future.
PMN is also conducting a financial literacy program
aimed at raising awareness amongst the clients visà-vis the Bureau’s importance and utilization. Moreover, a grievance addressing mechanism delineating
the rights and obligations of MFPs, Bureau and Clients is also being worked out.
Branchless Banking
Branchless banking is an important tool available to
the microfinance industry to expand outreach by leveraging cellular technology infrastructure. Moreover,
the number of m-wallet accounts which reached 4.7
million from 3.4 million in the same time period.
Pakistan’s branchless banking market is still in an
evolutionary phase with eight players competing
for market share of agents, number and value of
transactions, etc. With the agent network currently
standing at 186,000 agents exhibiting a 49% increase
from 125,000 in the year, there are concerns about
the quality of agents due to a widespread sharing
phenomenon. At present, the market is focused on
Over the Counter (OTC) transactions. This fuels a
commission war to lure agents hence dictating the
process of agent acquisition and a nominal addition
of new access points which would be, in real terms,
expansion of the agent network. A few players are,
however, bringing innovation to build business cases
around mobile wallets.
The SBP has continued to facilitate efforts for a
broader vision financial inclusion through strengthening the ecosystem for digital transaction accounts.
The SBP signed an MOU with NADRA in November
2014 according to which, biometric verification cost
has been brought down to PKR 10 for each m-wallet
account opening at the industry level. The placement
of biometric verification apparatus across all telecom
operators’ offices enables account opening within a
Currently, 70% of the organizations are actively generating enquiries (35 out of 50 members) and it is expected that enquiry numbers would grow even more
after the complete rollout as some MFPs are currently in a partial rollout state.
6
Section 1
few seconds via fingerprint verification, and coupled
with PTA’s directive of mandatory biometric mobile
SIM verification, this will result in the country’s mobile clientele ready to be inducted in the branchless
banking arena. This has also proven to be a catalyst
for the explosive growth of m-wallets since the beginning of 2015.
Over 12 microfinance institutions are currently providing disbursement and recovery services to their
clients through digital channels. Some players have
also started extending insurance services to their
clients through branchless banking channels. The
industry is poised to witness accelerated growth in
future in volume and variety of financial services.
Branchless banking can serve as a growth driver owing to its capacity to increase outreach by lowering
delivery cost and aiding profitability of institutions.
Conclusion
The microfinance industry in Pakistan having witnessed continuous growth over the last few years in
not only credit but also savings, insurance and remittances, is ideally positioned to play an important role
in the inclusive finance sphere. It can offer a wide variety of financial services to the unbanked particularly
at the base of the pyramid.
The current macroeconomic stability in the country provides an ideal environment for the sector to
grow and expand. Falling interest rates on the back of
lower inflation and uptake on private credit provides
an opportunity for the microfinance sector to reduce
costs and fund their expansion by borrowing from
commercial sources.
With major policy and regulatory initiatives like clearing house membership for MFBs and enhanced risk
coverage for lenders to mid-tier MFPs being taken,
7
players are better poised to address funding challenges. Also, the launch of non-bank MFPs regulatory framework will lead to strengthening of these
institutes and provide them with an opportunity to
expand.
Branchless banking continues to gain popularity and
provides opportunities to not only expand outreach
and reduce costs but also expand the variety of financial services on offer. MF-CIB is fully operation
with enquiries being generated by MFPs and remains
a key catalyst for future growth of the industry. In
addition, significant steps towards ensuring responsible inclusive finance, by working towards global
best practices in client protection have been taken.
Establishment of an industry risk register will allow
members to identify risks and take steps to mitigate
their impact.
The Year in Review
8
9
Section 1
Industry Performance
Section 2
Industry
Performance
10
Section 2
Industry
Performance
The section is divided into two parts. Section 2A covers the financial performance of the microfinance industry
whereas Section 2B deals with the social performance of the industry.
Section 2A: Industry Performance
This section provides a detailed analysis of the financial performance of Pakistan’s microfinance industry in 2014. 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.
Detailed financial information is provided in 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 2014.
A total of 42 MFPs submitted their audited financial
statements for PMR 2014. During the period, five new
respondents provided their dataset for the first time.
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 2A.1
for detailed definitions.
Box 2A.1
Peer Groups
11
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
ASA-Pakistan.
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, ten MFBs have
been licensed under the Microfinance Institutions Ordinance, 2001. Eight of them are operating at national level, while
two at the provincial level. MFBs are legally empowered to accept and intermediate deposits from the public.
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).
The distribution of respondents (number of reporting
organizations) by peer group is given in Exhibit 2A.1.
The MFI peer group comprises of the largest number
of respondents followed by MFBs and then RSPs.
portfolio increased significantly by 31 percent from
PKR 46.6 billion to PKR 61.1 billion (Exhibit 2A.2).
Among the MFPs, growth in active borrowers was
led by National Rural Support Program (NRSP) which
RSP, 5%
MFI, 27%
MFB, 9%
Exhibit 2A.1 Distribution of Respondents by Peer Groups
Scale and Outreach: Breadth
added 101,000 borrowers to its portfolio in 2014 –
depicting an increase of 26 percent year-over-year.
Khushhali Bank (KBL) and ASA Pakistan (ASA-P)
also witnessed significant growth, with borrowers
increasing from 409,000 to 469,000 and 180,000 to
221,000 respectively. In the current year, Kashf Foundation (KF) saw a significant reduction in borrowers
(by 26 percent) from 312,000 in 2013 to 230,000 in
2014. This reduction was primarily due to write-offs
of non-performing loans.
Outreach witnessed growth in all key indicators in
The industry in terms of outreach was dominated
Scale and outreach
This section focuses on outreach indicators to provide performance analysis of the industry in terms of
credit growth and composition, deposit mobilization,
depth of outreach and gender.
Active borrowers
60
2.50
50
2.00
40
1.50
30
1.00
20
0.50
10
2009
2010
2011
2012
2013
2014
Exhibit 2A.2: Growth in Number of Active Borrowers and GLP
2014 – active borrowers grew by 15 percent from 2.4
million to touch 2.8 million, whereas, the gross loan
by nine MFPs that accounted for 79 percent of the
outreach as shown in Exhibit 2A.3. During the period,
70
GLP in PKR Billions
Active borrowers in millions
GLP
3.00
12
Section 2
2014
FINCA
TRDP
39
76
71
110
FMFB
130
149
172
194
180
NRSP Bank
ASA-P
2013
198
TMFB
KF
221
227
312
231
409
KBL
469
391
NRSP
100
200
300
492
400
500
600
Exhibit 2A.3: Active Borrowers of Nine Largest MFPs
NRSP surpassed KBL to become the largest provider
of microcredit in terms of active borrowers. NRSP’s
client base crossed 490,000 after witnessing a substantial growth of 26%. KF maintained its position as
the third largest provider of microcredit, despite a reduction in active borrowers by 81,000.
witnessed the largest increase in GLP (by PKR 8.7 billion) primarily on the back of KBL, FINCA and FMFB as
their loan portfolios increased by PKR 3.4 billion, PKR
2.0 billion and PKR 1.0 billion respectively. Moreover,
the average loan size of MFBs remained the highest
among peer group (PKR 35,699), indicating a greater
RSP
MFI
MFB
100%
90%
80%
28%
27%
25%
27%
28%
34%
35%
31%
40%
44%
39%
40%
42%
2010
2011
2012
2013
2014
35%
70%
60%
50%
25%
40%
30%
20%
10%
Exhibit 2A.4: Percentage Share in Active Borrowers by Peer Group
13
Among the peer groups, MFBs continue to dominate
the sector by holding 42 percent of the total market
share followed by RSPs (35 percent) and MFIs (31
percent) as shown in Exhibit 2A.4. The market share
of MFBs and RSPs increased by 2 percent in 2014,
whereas in the same period, the share of MFIs decreased from 35 percent to 31 percent. The increase
in share of RSPs can be attributed to the increase in
borrowers by NRSP and TRDP (both RSPs collectively
added 140,000 microcredit clients) non-inclusion of
Akhuwat in the dataset.
In terms of GLP, MFBs account for 60 percent of the
total GLP, followed by MFIs with a share of 21 percent and RSPs with a share of 19 percent. The overall
GLP of the sector has increased by PKR 14.5 billion
to touch PKR 61.1 billion in 2014 (Exhibit 2A.5). MFBs
GLP. The share of RSPs in the overall gross loan portfolio has increased from 18% to 19% - this too was on
the back of NRSP which contributed PKR 2.1 billion
worth of loan portfolio.
Furthermore, approximately 82 percent of the industry’s GLP is accounted for by nine MFPs (Exhibit 2A.6).
KBL continues to dominate the market in terms of
portfolio size by having a GLP of PKR 12.2 billion –
depicting an increase of 38 percent compared to the
previous year. This is reflective of the active borrowers of KBL (second highest in the sector) coupled with
a shift towards higher average loan size (PKR 21,600
in 2013 to PKR 26,100). During the year, FINCA Microfinance Bank saw the greatest percentage increase
in GLP (by a remarkable 98%) from PKR 2.0 billion to
PKR 4.0 billion. The growth in portfolio was mainly
RSP
MFI
MFB
70
PKR in Billions
60
11.4
50
10
5.3
5.0
6.6
3.9
9.8
28.1
18.7
14.6
2010
10.2
6.7
7.6
30
20
12.9
8.4
40
2011
2012
2013
36.8
2014
Exhibit 2A.5: GLP (PKR billions) by Peer Group 2013-14
supported by a large deposit base of the bank. TMFB,
backed by its above average loans sizes, remained
the second largest player in terms of portfolio size
with a GLP of PKR 9.0 billion.
In the year under review, the sector witnessed a staggering rise in the number of depositors (by 150 percent) from 2.2 million in 2013 to 5.7 million in 2014.
Similarly, the value of deposits grew by 30 percent
in the same year, from PKR 32.9 billion to PKR 42.7
billion (Exhibit 2A.7). Resultantly, deposits now rep-
growth in depositors can be attributed to the surge in
branchless banking activities, especially the opening
of m-wallet accounts, along with increasing government disbursements for safety net programs such as
the Benazir Income Support Program (BISP). TMFB
was followed by KBL and NRSP Bank which contributed 226,000 and 219,000 depositors respectively in
the reporting year.
In terms of growth in value of deposits, FINCA was
the largest contributor to the value of deposits; by
adding PKR 1.9 billion worth of deposits to increase
2014
ASA-P
1.1
1.2
1.9
KF
FINCA
FMFB
NRSP Bank
2.0
2.7
3.5
3.8
3.5
4.0
4.5
4.8
NRSP
5.2
5.6
TMFB
KBL
7.7
8.3
9.0
8.9
12.2
10
5
15
Exhibit 2A.6: GLP of Nine Largest MFPs
resent 78 percent of the total liabilities of the MFB
peer group – an increase from 72 percent in the previous year. Moreover, deposits continue to outgrow
the loan portfolio of MFBs, as is evident from the deposits-to-gross loan portfolio ratio which currently
stands at 116.1%.
The largest increase in the number of depositors
came from TMFB which added 2.65 million new depositors (an increase of over 300 percent). The hefty
its deposit base from PKR from PKR 2.7 billion in
2013 to PKR 4.7 billion in 2014 (Exhibit 2A.8). FINCA
was followed by TMFB whose deposits grew by PKR
1.6 billion to close its balance sheet at PKR 12.3 billion deposits.
The Deposit-to-GLP ratio for MFBs remained stagnant in the current year; the ratio decreased by 1 percent from 117 percent in 2013 to 116 percent in 2014
SRSO
2013
14
Deposits Outstanding
Depositors
50
Depositors in thousands
6,000
5,000
40
4,000
30
3,000
20
2,000
Deposits outstanding
in billions
Section 2
10
1,000
2010
2011
2012
2013
2014
Exhibit 2A.7: Growth in Deposits and Number of Depositors
2014
POMFB
Ubank
0.03
0.02
0.21
WMFB
0.70
0.65
0.76
AMFB
2013
1.29
1.19
2.74
FINCA
3.62
NRSP-B
4.66
5.16
KBL
7.13
7.81
FMFB
8.68
8.75
10.63
TMFB
12.26
10
5
15
Exhibit 2A.8: Deposit Growth by MFB
(Exhibit 2A.9). The current 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 6.7 percent as compared to an average of 8.9 percent of non-bank MFIs. The liquidity position of MFBs
can also be determined by the deposit-to-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.
Deposit-to-GLP
Deposits
45
In PKR Billions
120%
35
100%
30
25
80%
20
60%
15
40%
10
5
20%
2010
2011
2012
2013
Exhibit 2A.9: Deposit-To-GLP Relation for MFBs
Feb 2014
Deposit-to-GLP Ratio
140%
40
15
GLP
Policy Holders
70
4.20
60
3.70
50
3.20
40
2.70
30
2.20
Sum Insured in
PKR Billions
Policy Holders in millions
Sum Insured
20
1.70
10
2010
2011
2012
2013
2014
Exhibit 2A.10: Growth in Number of Policy Holders and Sum Insured
Micro-insurance indicators – number of policy holders and sum insured – both showed a significant
improvement in the year 2014. The number of policy holders grew by 23.8 percent over the year, rising
from 3.0 million to 3.8 million, while the sum insured
increased by 50.0 percent from PKR 40.3 billion to
PKR 60.4 billion (see Exhibit 2A.10).
The greatest increase in micro-insurance came from
the MFB peer group whose policy holders and sum
insured increased by 46 percent and 80 percent re-
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 below 20 percent is assumed
to mean that the MFP is poverty focused. Except for
KBL and NRSP Bank, all of the other MFBs fall above
this benchmark (Exhibit 2A.11). Comparison across
peer groups shows that the ratio of average loan balance to per capita GNI for MFBs has been on the rise
Cut-off
Industry
RSP
MFI
MFB
Average Loan Balance
Per GDP
25%
20%
15%
10%
2009
2010
2011
2012
2013
2014
Exhibit 2A.11: Depth of Outreach by Peer Groups
spectively. During the year, MFBs enhanced the coverage of their insurance products by securing more
credit clients, along with their spouses. However,
among individual institutes, NRSP remained the largest providers of micro-insurance; holding a market
share of 22 percent and 24 percent in terms of policy
holders and total sum insured, respectively. Among
the types of insurance policies, health insurance constituted almost 51 percent of total insurance policies
followed by credit life at 49 percent.
for the past four years. MFBs tend to target the upper
end of the market through relatively larger loan sizes, and hence have a ratio of 20 percent compared to
MFIs and RSPs which have a ratio of 10 percent each.
The ratio of average loan balance to per capita GNI
witnessed a modest increase for MFBs (by 2 percent)
and MFIs (by 1 percent), while the ratio for RSPs remained stagnant at 10.0 percent. This could be interpreted as the sector continuing to target the poor but
also has implications for appropriate loan sizes in the
5%
16
Section 2
were the main drivers for the increase in the share
of individual borrowing from 24 percent in 2013 to 27
percent in 2014.
context of Pakistan’s inflationary environment. Erosion in the value of money means that a loan worth
PKR 30,000 in one year would be considerably lower
in value in the following year.
Gender Distribution
Lending Methodology
The proportion of women borrowers depicted a
downward movement in the current year, decreasing from 60.3 percent in 2013 to 58.0 percent in 2014
(Exhibit 2A.13). The proportion of women borrowers
In the Pakistan microfinance sector, majority of MFPs
follow the group lending methodology – in 2014, 68
percent of the active borrowers represented group
Group Borrowing
Individual Borrowing
Active Borrowers
in Thousands
3,500
3,000
2,500
2,000
76%
1,500
1,000
78%
90%
88%
10%
12%
22%
2011
2012
500
2010
73%
24%
2013
27%
2014
Exhibit 2A.12: Lending Methodology
lending (see Exhibit 2A.12). However, over the past
four years, the share of individual lending has been
increasing gradually, as many MFPs which were following the group lending methodology, also started
focusing on Individual lending methodology. In the
for MFBs and MFIs increased slightly by 1 percent,
whereas, the proportion of women borrowers for
RSPs remained unchanged. Out of the three peer
groups, the client base of MFBs is mostly composed
of male borrowers, while MFIs and RSPs are more
Female Borrowers
Male Borrowers
100%
90%
25%
80%
70%
60%
89%
50%
40%
74%
58%
75%
30%
17
20%
10%
11%
MFB
MFI
26%
RSP
42%
Total
Exhibit 2A.13: Gender Distribution of Credit Outreach by Peer Groups
period under review, individual lending showed an
increse of 8 percent, whereas, group lending has decreased from 76 percent to 68 percent. During the
reporting year, FINCA, Kashf Foundation and TMFB
oriented towards women borrowers.
Women borrowers remain an integral part of the
Pakistan microfinance sector and lending to women
Manufacturing/Production
Services
Trade
Livestock/Poultry
Agriculture
Housing
Other
100%
90%
08%
0%
07%
08%
0%
09%
80%
11%
07%
09%
0%
09%
09%
70%
60%
15%
15%
0%
09%
0%
09%
08%
08%
36%
38%
35%
14%
15%
16%
16%
16%
23%
23%
22%
22%
23%
2010
2011
2012
2013
2014
50%
30%
29%
40%
30%
20%
10%
Exhibit 2A.14: Active borrowers by sector
agriculture sector which made up 23 percent of the
borrowers, while the livestock sector continued to be
a distant third accounting for only 16 percent of the
borrowers.
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 be women. Large
players such as NRSP, ASA Pakistan, and SRSO have
portfolios that mostly constitute of women borrowers, whereas, Kashf Foundation only lends to women
borrowers.
Rural- Urban Lending
The share of rural borrowers continued to dominate
the sector; out of total borrowers, 57 percent belong
to rural areas while 43 percent belong to urban areas
(Exhibit 2A.15). Majority of the borrowers of the two
dominant players (NRSP and KBL) belong to the rural segment of the population. However, in the year
under review, the share of urban borrowers saw a
modest increase of 1 percent. This increase can be
attributed to growth seen by FINCA, TMFB and ASA
Portfolio Distribution by Sector
The credit portfolio distribution showed insignificant
change as compared to the previous year (Exhibit 2A.14). The share of trading sector declined by 1
percent in 2014 but continued to dominate the sector-wise distribution of microcredit with an overall
Rural
Urban
100%
90%
80%
70%
52%
46%
48%
54%
56%
58%
57%
44%
42%
43%
2012
2013
2014
50%
40%
30%
20%
10%
2010
2011
Exhibit 2A.15: Active Borrowers by Urban/Rural Areas
share of 29 percent. The trade sector primarily comprises of general stores, karyana shops, stall hawkers, fruit vendors, etc. Trade was followed by the
Pakistan, as more than 50 percent borrowers of
these institutes belong to urban regions.
60%
18
Section 2
Financial Structure
Among the players, KBL is the largest MFP by asset
size with PKR 16.7 billion of assets closely followed
by TMFB with assets over PKR 16.4 billion as shown
in Exhibit 2A.17. At third place is NRSP Bank with an
asset base of PKR 11.8 billion. Among the MFIs, KF
is the largest player by asset size with assets of PKR
5.3 billion followed by ASA-P with assets of PKR 2.8
billion. In the RSP peer group, NRSP is the largest
player with an asset base of PKR 9.8 billion followed
Asset Base
The asset base for the industry stood at over PKR
100.71 billion in the year 2014, an increase from PKR
81.55 billion in the previous year showing a year on
year increase of 23 percent.
RSP
MFB
MFI
80
PKR in billions
70
60
50
40
30
20
10
2010
2011
2012
2013
2014
Exhibit 2A.16: Total Asset Base by Peer Group
MFBs accounted for 69 percent of the asset base
of the industry followed by MFIs at 16 percent and
RSPs by 15 percent. The asset size of MFB peer group
stood at PKR 69.2 billion compared to PKR 55.4 billion in the last year (see Exhibit 2A.16) showing an
by PRSP with assets of PKR 2.5 billion. Overall the
industry continued to remain concentrated with nine
large MFPs, which include five MFBs, making up 83
percent of the industry.
2014
PRSP
ASA-P
2.0
2.8
2.5
2.8
4.6
Kashf
FINCA
4.0
5.3
6.4
NRSP
7.3
FMFB
9.8
9.5
9.8
NRSP Bank
10.7
11.8
15.2
TMFB
13.3
KBL
19
2013
5
10
16.4
16.7
15
20
Exhibit 2A.17: Asset Base of Larger MFPs
increase of more than 24 percent. The MFI and RSP
peer groups witnessed an increase of 20 percent in
their asset size as compared to the previous year. Asset base for MFIs and RSPs stood at PKR 16.2 billion
and PKR 15.3 billion in 2014, respectively.
Asset Composition
The asset utilization ratio which had remained range
bound over the last few years showed notable improvement rising to 60.6 percent in 2014 as compared to 54.5 percent in 2013 as shown in Exhibit
Asset Utilization Ratio
70%
60%
50%
40%
30%
20%
10%
2010
2011
2012
2013
2014
Exhibit 2A.18: Asset Utilization Trend 2010-14
2A.18. Improvements were witnessed in the asset
utilization ratio of the MFI and RSP peer group which
stood at 79.2 percent and 74.7 percent respectively
whereas the MFBs experienced an increase from 50.7
percent in 2013 to 53.2 percent in 2014.
entire peer group. Over time, as these re-established
players grow and achieve scale, there will be further
increase in the ratio for MFBs.
100%
80%
60%
40%
20%
Africa
East Asia
and the
Pacific
Eastern Europe Latin America
and
and The
Central Asia
Caribbean
Middle East
and
North Africa
South Asia
Pakistan
Exhibit 2A.19: Regional Comparison of Asset Utilization Ratio
Asset composition remained varied across the industry. MFIs accounted for the highest advances to
total assets ratio closely followed by RSPs as shown
in Exhibit 2A.20. Improvement in the ratio for MFIs
and RSPs is largely due to increase in grace period
being offered by the national apex. MFB peer group
has lower advances to total assets as a number of
players have recently been acquired and their credit
business is in formative stages. In addition, one of
the larger players, FMFB, has only been able to deploy
half of its deposit base leading to lower value for the
Funding Profile
The capital structure of the industry continued to witness the trend of increasing deposits and decrease
in debt in 2014 as shown in Exhibit 2A.21. Deposits
now make up 44 percent of the total funding of the
sector as compared to 39 percent in 2013. Debt has
fallen to 33 percent of the funding from 39 percent
in the same time period. Equity witnessed a slight
increase to account for 23 percent of the total funding on the back of increasing profitability among the
practitioners.
The capital structure continues to be differ among
the peer groups with non-bank MFPs relying on debt
and equity for funding as they are prohibited to mobi-
Despite the improvement in the asset utilization ratio
in the year 2014, it was below its regional peers as
shown in the Exhibit 2A.19. For the industry to improve its bottom line there is a need to improve their
utilization ratio through better liquidity management.
20
Section 2
Cash and Bank Balance
Fixed Assets
Investments
100%
Proportion of
Total Assets
19%
80%
20%
20%
4%
3%
4%
0%
22%
24%
Advances
18%
16%
14%
3%
0%
5%
4%
7%
9%
60%
40%
55%
53%
2013
2014
76%
79%
2013
2014
75%
70%
20%
MFB
2013
MFI
2014
RSP
Exhibit 2A.20: Asset Composition among Peer Groups
lize deposits. Meanwhile, MFBs continue to witness
notable success in deposit mobilization which is reflected in their increasing reliance on deposits as a
deposit base larger than their GLP. In addition, two
thirds of the deposits are accounted for by three
MFBs namely, TMFB, KBL and FMFB.
Equity, 23%
Deposits, 44%
Debt, 33%
Exhibit 2A.21: Capital Structure of Microfinance Industry
21
source of funds.
Profitability and Sustainability
64 percent of the MFBs funding is made up of deposits up from 62 percent in the previous year as shown
in Exhibit 2A.22. In case of MFI peer group, debt continues to make up 80 percent of the funding whereas
in the case of RSPs debt accounts for 70 percent of
the capital, slightly up from 69 percent in the preceding year.
The total net income and total revenues for the industry stood at PKR 3.5 billion and PKR 24.3 billion in
the year 2014 respectively. The unadjusted ROA and
ROE for the industry stood at 4.2 percent and 20.7
percent for the year. Out of the total profit for the industry the MFB peer group accounted for 47 percent
of the profit whereas the MFI and RSP peer groups
made up 25 percent and 28 percent.
While MFBs are relying on deposits to meet the bulk
of their funding needs, it is pertinent to note that
out of nine MFBs reporting for PMR only six have a
The industry continues to be sustainable with Operational Self Sufficiency (OSS) and Financial Self Suffi-
Deposits
Debt
Equity
90%
80%
70%
60%
50%
40%
30%
20%
10%
2013
2014
2013
MFB
2014
2013
2014
RSP
MFI
Exhibit 2A.22: Capital Structure by Peer Group
ciency (FSS) not only above 100 percent but also show
an improving trend as seen in Exhibit 2A.23. Out of
the 41 reporting organizations 35 have an OSS above
100 percent. Improvement in OSS and FSS is fuelled
primarily by increasing GLP and growth in outreach.
This points towards the increasing maturity of the
practitioners business models. In addition, MFPs are
Compared globally, the yield on gross portfolio (nominal) continues to be on the higher side (see Exhibit
2A.25). However, the higher yield is largely as a result
of high operating costs which are a function of the
relatively smaller loan sizes offered by the industry.
As the loan sizes increase over time especially after
the start of lending to microenterprises it is antici-
Operational Self Sufficiency (OSS)
Financial self sufficiency (FSS)
140%
120%
100%
80%
60%
40%
20%
2011
2012
2013
2014
Exhibit 2A.23: OSS and FSS Trend
now ideally geared towards accelerated growth and
innovation.
The total revenue ratio for the industry increased
to 28.5 percent from 24.8 in 2013 on the back of increasing GLP and income generated from branchless
banking operations. In addition, the yield on gross
portfolio remained stable, (shown in Exhibit 2A.24) to
close at 34.6 percent.
pated that operating costs will decline resulting in
reduction of yield on loan portfolio.
2010
22
Section 2
Total Revenue Ratio
Yield on Gross Portfolio (Nominal)
Yield on Gross Portfolio (Real)
40%
35%
30%
25%
20%
15%
10%
5%
2010
2011
2012
2013
2014
Exhibit 2A.24: Total Revenue Ratio & Yield on Gross Portfolio Trend
35%
30%
25%
20%
15%
10%
5%
Africa
East Asia
and the
Pacific
and
and The
Central Asia
Caribbean
Middle East
and
North Africa
South Asia
Pakistan
Exhibit 2A.25: Regional Comparison of Yield on Gross Portfolio (Nominal)
The total revenues for the sector stood at PKR 24.3
billion up from PKR 17.3 billion in the previous year.
Out of the total revenue, 76.9 percent is made up from
earnings from loan portfolio followed by 15.5 percent
from financial services including branchless banking
and 7.6 percent from earnings on the financial assets
(see Exhibit 2A.26 ). The total income from branchless
banking stood at PKR 2.3 billion in 2014 as compared
to PKR 2.0 billion in the previous year. The increase is
partially due to the addition of Waseela MFB in the
dataset for the first time.
Financial Assets
Financial Services
Loan Portfolio
25
PKR in billions
30
20
15
10
5
2010
2011
2012
Exhibit 2A.26: Revenue Streams
23
2013
2014
Adjusted Total Expense / Total Assets
Adjusted Financial Expense/ Total Assets
Adjusted Operating Expense/ Total Assets
Adjusted Loan Loss Provision Expense/ Total Assets
30%
20%
10%
2010
2011
2012
2013
2014
Exhibit 2A.27: Expenses to Asset Ratio Trend
Operating Expense / Assets
20%
15%
10%
5%
Africa
East Asia
and the
Pacific
and
and The
Central Asia
Caribbean
Middle East
and
North Africa
South Asia
Pakistan
Exhibit 2A.28: Regional Comparison of Operating Expense
Expense to asset ratio witnessed a slight increase in
the 2014 as shown in Exhibit 2A.27. The total expense
ratio increased to 21.9 percent as compared to 20.7
percent in the previous year. The increase was driven
by the increase in the operating expenses which was
partially due to inclusion of a number of smaller and
growing organizations in the dataset and partially
due to increasing administrative expenses.
Personnel Expense/ Gross Loan Portfolio
Admin Expense/ Gross Loan Portfolio
30%
25%
20%
15%
10%
5%
2010
2011
2012
2013
2014
Operating Expense / Gross Loan Portfolio
Exhibit 2A.29: Operating Expense to GLP Trend
24
Section 2
Personnel Allocation Ratio
52%
50%
48%
46%
44%
42%
40%
2010
2011
2012
2013
2014
Exhibit 2A.30: Personnel Allocation Ratio Trend
with the lowest value at 37.8 percent.
The operating expense was on the higher end as
compared to other regions as seen in Exhibit 2A.28.
This points towards the fact that MFPs in Pakistan
have yet to achieve scale and only then costs can be
reduced. Branchless banking can play a crucial role
in bringing down the operating costs of the industry.
The productivity indicators of the industry continued
to exhibit improvement in the year 2014. Loans per
staff and loans per loan officers rose to 152 and 342
as compared to 144 and 327 in the previous year. Depositors per staff increased to 293 as compared to
269 in the same time period (see Exhibit 2A.31).
Operating expense to GLP also witnessed an increase
in 2014 after exhibiting a declining trend over the last
few years as shown in Exhibit 2A.29. Operating expense to GLP stood at 23.0 percent as compared to
22.1 percent in the previous year. The increase in the
expense was due to rise in the administrative expense.
Loan per staff officer continued to vary among the
peer groups. MFBs had the highest number of loans
per staff with 369 loans followed by RSPs with 348
and MFIs with 308.
Risk
Productivity
Credit Risk
The personnel allocation ratio for the industry saw
a modest improvement in 2014. The ratio increased
to 44.5 percent compared to 44.0 percent in the previous year (see Exhibit 2A.30). The personnel allocation ratio continued to vary among the peer groups.
RSPs continued to have the highest value with 52.2
percent, followed by MFIs with 48 percent and MFBs
Portfolio at Risk (PAR)>30 days decreased to 1.1 percent in 2014 as compared to 2.5 percent in 2013 (see
Exhibit 2A.32). However, write-offs in the same period increased to 2.3 percent from 1.1 percent. The increase in the write-offs was primarily due to increase
Loans per Loan Officers
Depositors per Staff
Loans per Staff
400
350
300
250
200
150
100
50
2010
2011
2012
Exhibit 2A.31: Productivity of MFPs
25
2013
2014
Cut off
Write Off
Portfolio at Risk >30 days
7%
6%
5%
1.8%
2.6%
4%
2.3%
1.5%
3%
2%
4.1%
1%
2.9%
3.7%
2.3%
2.5%
1.1%
2010
2011
2012
2013
2014
Exhibit 2A.32: PAR>30 Days & Write Offs Trend
Overall, the PAR > 30 days continues to remain below
the 5.0 percent cutoff point reflecting positive portfolio quality of the industry. However, it also may point
towards the fact that players are risk averse and
there is still plenty of opportunity in the market for
growth in outreach.
Risk coverage ratio for the industry stood at 180.0
percent in 2014 up from 61.2 percent in the previous
year. This high value for the risk coverage ratio was
largely due to the requirement of national apex for its
funded institutes to have loan loss provision equal to
5.0 percent of their total outstanding portfolio.
Conclusion
On the whole 2014 was a good year for the industry. It
witnessed double digit growth in outreach in all areas
including credit, deposits and insurance. The growth
in the number of depositors was more pronounced
due to the opening of a large number of m-wallet
accounts. Female borrowers continued to constitute
a majority of the borrowers and group lending re-
mained the dominant approach to lending. However,
individual lending was becoming increasingly popular
with practitioners. Majority of the lending activities
continued to target the trade and agriculture sector.
In addition, rural borrowers continued to account for
the majority of the borrowers for the industry.
The total asset base of the industry stood over PKR
100 billion with MFBs making up nearly 70 percent of
it. MFBs continued to rely on deposits as their main
funding source whereas MFIs and RSPs are dependent on debt for on-lending. The industry continues
to remain sustainable and out of 41 reporting organizations, 35 MFPs are sustainable. Operating costs
remained high for MFPs and there is room for improvement in this area. In addition, the productivity
indicators continued to exhibit an improving trend.
PAR>30 days continued to remain below the 5 percent cut-off point reflecting positive portfolio quality.
The industry continues to remain concentrated with
nine MFPs dominating the market out of which five
are MFBs.
On the whole the industry is poised for growth and
can play a crucial role in the inclusive finance sphere.
in the ratio by one player, namely KF. Write off ratio
stood at 16.5 percent for KF in 2014.
26
Section 2
Section 2B: Social Performance
Introduction
The last few years have seen a dedicated effort on
behalf of the microfinance industry, both globally
and in Pakistan, to focus on social performance (SP)
along with financial sustainability. Microfinance is a
double-bottom line industry, where sustainability is
not an end in itself; but rather a 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.
In order to better attain an institution’s intended
goals, microfinance stakeholders around the world
now believe that an MFP’s systems, activities and
outputs must be deliberately geared towards its social vision, to make the impact that the institution is
aiming for. For an MFP, therefore, social performance
management means focusing simultaneously on its
financial and social bottom lines.
The following section will outline key social performance indicators as monitored across the Pakistan
microfinance landscape. We will attempt to analyze
industry trends across various SP indicators, including social goals, poverty target, governance & HR,
diversity in financial and non-financial service provision, client protection, pricing norms and environment.
hensive set of indicators on institutions’ social goals,
target segments and other services. As self-reported
data, the MIX framework allows MFPs to select multiple categories that are applicable to their respective
institution. For example, within the ‘poverty targeting’ sub-section, an MFP may report to targeting all
or none of the ‘very poor’, ‘poor’ and ‘low income’ client
categories if those are applicable to their practices.
At the time of this publication, 27 PMN member MFPs
reported on the new MIX Social Performance framework, including 5 MFBs (out of 9 MFB members), 19
MFIs (out of 35 MFI members) and 3 RSPs (out of 6
RSP members). The number of reporting MFPs is expected to increase once the new reporting framework
has been mainstreamed; all responses will be published on the MIX market website for each successive
reporting MFP.
Target Market
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 by peer
group are highlighted in Exhibit Exhibit 2B.1. All 5 reporting MFBs cited three multiple targets, including
women, clients living in rural areas and clients living
Reporting to MIX SP framework 2014
Total PMN Membership
MFB
5
09
MFI
19
35
RSP
3
6
Total
27
50
Table 1: Number of Reporting MFPs for Social Performance
27
Analysis of the Sector’s SP
Indicators
The Microfinance Information eXchange (MIX), in collaboration with the Social Performance Task Force
(SPTF), has developed an annual social performance
reporting framework for MFPs. This framework has
recently been formatted to better suit the reporting
needs of the industry, and includes a new compre-
in urban areas. Of the 19 reporting MFIs, the majority
18 target women and clients in rural areas respectively, while one also reported targeting the youth.
Overall, clients are targeted based on gender and
location. While the focus on rural areas is relatively
greater, there is also a growing emphasis on urban
clients, particularly among MFPs providing individual
loans.
RSPs
MFIs
MFBs
30
No. of Responses
25
2
3
18
18
16
5
5
5
Women
Clients living in
rural areas
Clients living in
urban areas
2
20
15
10
5
2
Adolescents
and youth
Exhibit 2B.1: MFPs’ Target Markets
Development Goals
‘marginalized’ and expanding economic opportunities
emerged as more common amongst the non-bank
MFPs. Support to start-up businesses, which is generally considered a risky initiative for microfinance,
has also seen growing interest amongst some MFPs.
A focus on women is quite common in the sector as
well.
As indicated in the previous reporting period, all MFPs
have some social development goals built into their
mission and these rarely change on an annual basis.
These are social goals towards the accomplishment
of which the MFPs have explicitly designed products, services, and procedures. Interestingly, there
are commonalities across MFPs stated social goals
across peer groups i.e. regulated microfinance banks,
These broad themes translate into a range of development objectives for service providers. The most
RSPs
MFIs
MFBs
30
2
3
3
15
19
19
10
13
5
5
In
cr
fin ea
an se
ci d a
al cc
se es
rv s
ic to
P
es
ov
er
ty
re
du
ct
io
n
5
1
2
7
2
3
14
1
10
5
3
3
1
2
1
2
Exhibit 2B.2: Development Goals
microfinance institutions and multi-dimensional rural support programmes. For example, 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
common objectives are increased access to financial
services and poverty reduction, with all 27 reporting MFPs citing these are their objectives. The other
mostly commonly cited development goals across all
peer groups are growth of existing businesses, employment generation, and gender equality and women’s empowerment (Exhibit 2B.2).
20
Em
ge plo
ne ym
ra e
tio nt
st
n
ar D
t- ev
up e
l
en op
te me
rp n
ri t o
se f
G
s
ro
w
th
o
bu f e
si xis
ne ti
ss ng
Yo
es
ut
h
op
po
rt
un
iti
H
es
ea
lth
im
pr
ov
em
w G
en
om e
t
en nd
's er
em eq
po ua
w lity
er a
W
m n
at
en d
er
t
an
d
sa
ni
ta
tio
n
No. of Responses
25
28
Section 2
Poverty Targeting
poverty level assessments serve multiple purposes
like guide client targeting and selection for MFPs,
establish baselines of client poverty for subsequent
impact evaluations, appraisal of financial services to
better suit needs of clients and overall measurement
of the program’s effectiveness.
In terms of poverty level of targeted clients, all of the
reporting institutions target more than one segment
of the poor. Overall, the most common target market
for the sector in terms of income is low income cli-
RSPs
MFIs
MFBs
No. of MFP responses
25
2
20
2
15
16
11
10
5
1
3
5
5
Very poor clients
Poor clients
Low income clients
Exhibit 2B.3: Poverty Targets
While some MFPs employ only one method to measure poverty levels, others use multiple assessment
tools, as shown in Exhibit 2B.4. MFPs report use of
their own proxy poverty index, as well as Grameen
Progress out of Poverty Index (PPI) and per capita
household income and expenditure. While the MIX
SP framework does not cover the poverty scorecard
prescribed by the Pakistan Poverty Alleviation Fund
(PPAF) designed by The World Bank, this is predom-
ents, closely followed by poor clients. Only 3 reporting
MFIs and 1 RSP reported targeting very poor clients.
MFIs and RSPs are largely targeting both poor and
low income clients as seen in Exhibit 2B.3.
Poverty Measurement Tools
MFPs that measure client poverty collect econom-
RSPs
MFIs
MFBs
12
2
8
6
9
4
29
1
2
1
t
1
2
1
po O
ve wn
rt p
y ro
in x
de y
N
x
on
e
of
th
e
ab
ov
e
2
te
s
1
1
G
of ra
P me
ov e
er n
ty Pr
In og
de re
x ss
(P o
P
er
P ut
I)
ca
pi
ta
ex ho
pe u
nd seh
P
itu ol
er
re d
ca
pi
ta
ho
u
in seh
co o
m ld
e
w Pa
ea r
lth tic
i
ra pa
nk to
in ry
g
H
ou
si
ng
in
de
Fo
x
od
se
cu
ri
ty
in
de
x
1
ns
2
3
1
3
M
ea
No. of responses
10
Exhibit 2B.4: Poverty Assessment Tools used by MFPs
ic, social, and/or other types of wellbeing indicators
from clients for the express purpose of determining
and/or tracking these clients’ poverty levels. Client
inantly used by MFIs as partner organizations of
PPAF.
Box 2B.1
Poverty Scorecard used by PPAF Partner Organizations (POs)
The Poverty Scorecard for Pakistan developed by The World Bank is a tool to measure change in poverty in an effective
way and to support the management of development programmes that focus on alleviating poverty. It is also a useful
tool for social investors that need to measure results according to the triple bottom line objectives i.e. financial, social
and environmental results. By ranking targeted households relative poverty, it helps managers target the poor, track
changes in poverty, and manage depth of outreach.
One of the ways that the apex lender for microfinance practitioners in the country (PPAF) has ensured incorporation of
SPM into partner organizations is through the use of a standard poverty scorecard. All PPAF partner organizations are
required to complete the poverty scorecard system for new/repeat clients, and submit reports on these scorecards to
the PPAF. While analysis based on poverty research needs to be strengthened, these scorecards provide an important
foundation for the industry to work toward standardized measurement of what is perhaps the most predominant
social goal of microfinance practitioners, i.e. targeting the poor.
Governance & HR
be understood broadly as referring to any experience
or training related to managing social performance at
MFPs.
Governance and Human Resource (HR) policies related to social performance allow MFPs to gauge
commitment to their social development goals at the
institutional level. Governance refers to Board members receiving orientation on the social mission of the
MFP, the presence of a SP champion or committee at
the Board level, and Board level experience in SPM.
During orientation, Board members are provided with
an explanation of (or training on) the institution’s social mission and goals. Social performance champions are members of the Board of Directors that are
assigned to oversee integration of social performance
management practices within an institution while SP
committees are formal entities within the Board that
meet on a regular basis to discuss topics related to
institutional SP. SP-related work experience should
Exhibit 2B.5 shows all 5 of the reporting MFBs responded positively to Board members receiving SP
orientation on a routine basis and 4 of the 5 MFBs
have Board members with experience in SP management. Moreover, it is primarily MFBs with social
investors on their Board who reported to having a SP
champion or committee, with regular meetings and
updates on the bank’s progress on SP management.
RSPs
MFIs
No. of responses
25
20
2
3
15
16
15
10
1
4
5
5
4
3
Board orientation
of social mission
SPM champion/committee
at Board
Board experience
in SPM
MFBs
The strong performance of 15-16 MFIs on Board
orientation of social mission and experience in SPM
relates to a number of initiatives taken by the Pakistan Poverty Alleviation Fund. PPAF has conducted
numerous institutional level trainings for its part-
Exhibit 2B.5: Social Performance Management at the Board
30
Section 2
ner organizations (primarily MFIs) on social performance management, good governance and risk
management for different levels of the institutions’
– including Board members, senior management and
staff. The aim is to create greater awareness on social performance management, through structured
knowledge sharing and capacity building on various
SPM tools and techniques and ensure effective compliance with the double bottom lines of these institutions. Good governance workshops and corporate
Staff incentives at MFPs relate to the number of clients entertained by the field staff, the quality of interaction with clients based on client feedback mechanisms, quality of social data collected and/or the
portfolio quality maintained by field staff. Exhibit 2B.6
shows that across the Pakistan microfinance industry, portfolio quality is the most cited factor for staff
incentives, both for MFBs and non-Bank MFIs. This
means that MFPs have incentives and/or bonus systems designed to reward staff based (in whole or in
Portfolio quality
52%
Number of clients,
37%
Quality of interaction
with clients based on
client feedback
mechanism
8%
Quality of social
data collected
3%
Exhibit 2B.6: Staff Incentives related to SPM
RSPs
MFIs
MFBs
No. of responses
15
12
2
9
9
1
6
1
2
4
3
3
3
Total number
of clients
Number of new clients
3
31
Client retention
Exhibit 2B.7: Method for incentivizing number of clients
governance trainings for Board members, as well as
trainings on effective risk management have been
conducted to create greater responsibility within
these institutions’ towards their social objectives.
part) on whether staff members consistently collect
loan payments on time. The second most prevalent
factor is number of clients, which means MFPs have
incentives and/or bonus systems designed to reward
RSPs
MFIs
MFBs
30
3
No. of responses
25
20
3
2
2
19
15
15
17
1
7
10
11
5
5
4
5
4
4
Social protection
(medical insurance
and/or pension
contribution)
Safety policy
Anti-harassment
policy
Non-discrimination
policy
Grievance
resolution policy
Exhibit 2B.8: HR policies related to SP
Human resource policies related to SP include the
presence of social protection (medical insurance
and/or pension contribution), safety policy (protecting staff members from external harm while in the
field), anti-harassment policy, non-discrimination
policy (explicit policy against discrimination based on
sex or ethnicity in matters of hiring, firing, and payment of staff members) and a grievance resolution
policy (a formal channel or channels for communicating and redressing problems staff may have on the
job). Exhibit 2B.8 shows that all reporting MFPs have
strong reporting on having anti-harassment policy in
place, a grievance resolution policy for staff, a safety
policy and non-discrimination policy.
Products and Services: Financial
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
range of financial products offered by MFPs in Pakistan, based on the assumption that microfinance
clients are a heterogeneous group with varying financial needs.
Credit
All reporting organizations offer microcredit services,
including both for income generating purposes and
non-income generating purposes. According to Exhibit 2B.9a, all reporting MFPs offer income generating loans, while a few also offer non-income generating or consumption based loans.
Non-income
generating loans
5%
Income generating loans
95%
staff based (in whole or in part) on the number of clients in field officers’ portfolios. These can be based
on total number of clients, number of clients meeting specific criteria (e.g. new clients, returning clients,
etc.), or both. Exhibit 2.B.7 shows that all MFPs use a
combination of these measures for calculating staff
incentives, with the most common being total number of clients, followed by client retention.
Exhibit 2B.9a: Type of Credit Products offered by MFPs
32
Section 2
RSPs
MFIs
MFBs
30
No. of responses
25
3
3
20
15
19
14
10
5
7
5
Microenterprise
loans
SME loans
5
Agriculture/livestock
loans
2
Express loans
Exhibit 2B.9b: Credit Offerings
The number and kinds of credit products vary across
institutions. Due to the range of clients targeted, it is
important for MFPs to develop a product mix that accounts for the multi-dimensional needs of a diverse
set of clients. Increasing competition and maturing
markets require MFPs to go beyond generic product design and differentiate their products to serve
different market segments and customer demands.
Exhibit 2B.9b shows the range of activities for which
income-generating loans are available in Pakistan.
Loans for microenterprises are by far the most common, with all reporting MFPs offering these, followed
by agricultural/livestock microcredit. Other activities
for which a growing number of MFPs offer credit
products include SME loans and express loans. This
suggests that product differentiation in credit is under way and MFPs are beginning to offer products
beyond the typical microenterprise loan; with some
MFPs moving up the market to target SMEs as well
as offer timely express loans.
Deposits
Only about 37 percent of the reporting MFPs offer
savings products. 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 intermediate client deposits, and thus all reporting
MFBs take deposits. Non-bank MFPs can only mobilize deposits. It is important to note that all savings
products reported are voluntary, as none of the reporting MFBs impose compulsory savings on clients.
That is, deposit accounts are not required by MFPs as
collateral for another financial product/service and
instead offered to clients as an independent product.
All MFBs offer both demand deposit accounts and
time deposit accounts, based on the needs of their
clients; though further diversified savings products
and access to these savings products would help
boost uptake among small-holder savers.
Insurance
A majority of reporting MFPs offer insurance prodDoes not offer
savings accounts
63%
Savings accounts
37%
Exhibit 2B.10: Savings Products Offered
33
ucts to meet clients’ needs and to protect them
against risk of losses. This indicator looks both at
compulsory insurance, which is typically clubbed with
credit products, and voluntary insurance offered to
clients as a stand-alone product. Out of the reporting
MFPs offering compulsory insurance products, the
majority offer credit life insurance only, with limited
MFPs offering other types of insurance such as life/
accident and agriculture etc. (see Exhibit 2B.11a).
with insurance providers, offering life/accident, agriculture/livestock and health insurance products.
Selected partner organizations of PPAF have piloted
agriculture/crop and livestock insurance products for
their clients with explicit monitoring indexes to insure clients’ losses to crops or livestock in the event
of external risks. While a more diversified range of insurance products is welcome, there is also a need to
create greater awareness around benefits of existing
RSPs
MFIs
MFBs
No. of responses
20
3
15
10
10
2
5
2
2
1
1
1
Life/accident insurance
Agriculture insurance
5
Credit life insurance
Exhibit 2B.11a: Compulsory Insurance Provision by Peer Groups
RSPs
MFIs
MFBs
8
6
6
4
2
2
2
Credit Life Insurance
1
3
1
Health insurance
Exhibit 2.B.2.11b: Types of Voluntary Insurance by Peer Groups
Over the past few years, some MFIs have introduced
voluntary insurance products through partnerships
insurance products available to clients.
No. of responses
10
34
Section 2
Other Financial Services
neurial skills of clients or the performance of their
enterprises. This category includes education related to running a business but not financial literacy as
such. Non-financial services can be offered by the institution directly or through a partnership.
Other financial services provided by MFPs tend to
be dominated by MFBs, offering one or more other
financial services amongst the following categories:
debit/credit card, mobile banking services, savings
facilitation, remittances services/money transfer
services, payment services and scholarship/educational grants (as shown in Exhibit 2B.12). Some MFIs
are now offering clients the facility to repay loan in-
In most cases, MFPs offer non-financial services in
addition to financial products and services; these services vary according to the capacity and vision of the
institution, but the purpose is to develop client skills
RSPs
MFIs
MFBs
No. of MFP Responses
8
7
4
6
5
1
4
1
3
2
1
4
3
Debit/credit card
4
4
Remittance/money
transfer services
Payment services
3
Mobile/branchless
banking services
Savings
facilitation services
Exhibit 2B.12: Provision of other financial services
Products and Services: NonFinancial
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.
Nonfinancial enterprise services are any non-financial services aimed at improving either the entrepre-
MFIs and RSPs are actively providing all types of
non-financial services in the market; especially those
stallments through branchless banking agents, while
some have also supported clients’ families through
educational grants/scholarships.
RSPs
No. of MFP Responses
15
2
12
2
2
9
6
13
12
7
6
3
1
Enterprise services
Womens
empowerment
Education services
Exhibit 2B.13: Provision of other financial services
35
MFIs
Health services
MFBs
N/A, 5%
Declining balance
39%
Flat interest
57%
Exhibit 2B.14a: How Service Cost is Communicated
committed to a particular social mission (see Exhibit
2B.13). While MFIs and RSPs are offering at least one
(in some cases multiple) non-financial service, only
one MFB is offering education services to its clients.
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.
ized pricing methodology for easier understanding
and comparison across products and MFPs for decision-making. The Pricing Transparency Initiative conducted in Pakistan in collaboration with MFTransparency led to the publication of standardized APRs of
loan products across MFPs in Pakistan.
Transparency of Cost
The industry is making a concentrated effort to promote greater pricing transparency using a standard-
RSPs
MFIs
20
1
No. of MFP
15
10
5
2
13
6
3
2
1
Declining balance
Flat interest
N/A
MFBs
While this indicates a positive step towards increased
transparency in displaying costs, a majority of MFPs
in Pakistan continue to use the flat methodology to
communicate prices to clients – where interest rate
is communicated on the basis of the stated initial
principal amount of the loan irrespective of the payment plan. Around 57 percent of reporting MFPs are
using the flat interest rate method; this is primarily
due to the simplicity in calculation and marketing. 39
percent use the declining balance method – which
means interest is communicated on the amount of
the loan principal which the borrower has not yet repaid. One MFP reported interest rates as not being
applicable (n/a), offering only Islamic products, as
shown in Exhibit 2B.14a.
Exhibit 2B.14b: Methods of Stating Service Cost by Peer Group
36
Section 2
Client Protection
Client Protection (CP) principles refer to the minimum
‘do no harm’ standards that clients should expect to
receive when doing business with a microfinance institution. These principles help protect clients and
help institutions practice good ethics and smart
business – which is good for the industry as a whole.
There are seven all-encompassing principles of client
protection developed by the SMART Campaign, an in-
principles, particularly with all reporting MFPs having
in place strong repayment capacity analysis, internal
audit systems, full pricing terms disclosure, and defined code of conduct. However, as indicated in the
sub-section above, not all pricing is disclosed in Annual percentage rates (APR) format, particularly by
the non-Bank MFIs. Due to the regulatory framework
under which MFBs fall, all reporting Banks show full
compliance to the basic CP indicators.
RSPs
MFIs
MFBs
30
25
3
3
3
3
3
3
20
15
17
19
19
18
19
19
12
11
10
5
5
5
5
5
5
5
5
P
o
re lici
pa es
ym su
en pp
t c ort
a g
an pa oo
co
al cit d
m In
ys y
pl te
is
ia rn
nc a
l
e a
u
w d
ith it
po ve
te
lic rify
rm
ie
P
s
s ri
an c
e
di d c s, i
n
s
A
cl on st
nn
os d a
ed itio llm
ua
to ns en
of l pe
cl fu ts,
lo rc
ie lly
an e
nt
n
s
pr ta
od ge
uc ra
ts te
di s (
sc AP
lo R
se )
d
Co
cl de
ea o
rl f c
y on
de d
fin uc
ed t
V
co iola
nd ti
uc ons
Cl
ts o
ea
an f c
rr
ct od
ep
io e o
or
ne f
tin
d
fo g
s
r
cl co ys
ie m te
nt p m
s la i
at in n
br ts pla
an fr ce
ch om
C
es
da on
ta tra
pr ct
s
iv i
ac nc
y lu
cl de
au a
se
5
3
2
Exhibit 2B.15: Client Protection Indicators
ternational consortium of microfinance stakeholders,
which coordinates with the work of MFTransparency in the area of pricing transparency. The seven CP
principles include:

• Appropriate product design and delivery
• Prevention of over-indebtedness
• Transparency
• Responsible pricing
• Fair and respectful treatment of clients
• Privacy of client data
• Mechanisms for complaint resolution
37
For the purpose of self-reporting on social performance indicators, MFPs provided information regarding the presence of various institutional-level
client protection indicators, including policies supporting good repayment capacity analysis, internal
audit compliance, full pricing terms disclosure, APR
disclosure, CP code of conduct, sanctions for code of
conduct violations, clear reporting systems and data
privacy clauses.
Overall, the sector shows positive compliance to CP
Environmental Policies
For the first year, SP reporting to MIX consisted of
MFPs providing information regarding elements of
their environmental policies, often considered to be
the ‘triple bottom-line’ for microfinance. These environmental policies refer to MFPs promoting awareness on environmental impacts, having tools to evaluate environmental risks’ of clients activities and
including clauses in loan contracts to ensure mitigation of environmental risks through the clients’ businesses (see Exhibit 2B.16a).
In addition to this, a few MFPs reported on various
types of environmentally friendly products and/or
practices that they are currently piloting, including
products related to renewable energy, for example
solar panels, biogas digesters and so on. Some MFPs
are also engaged in financing environmentally friendly businesses, for example organic farming, recycling
and/or waste management (see Exhibit 2B.16b).
The strong performance of the MFI peer group in this
area reflects the efforts carried out by the PPAF, to
ensure compliance of all its partner organizations
RSPs
MFIs
MFBs
2
15
10
3
1
15
10
5
4
5
4
2
3
en
vi
ro r Cl
nm eq au
en uir ses
ta ing in
l
l
en pra clie oa
vi ct nt n c
ro ic s t on
nm es o tr
/ i
en mi mr act
ta tig ov s
l r at e
is e
ks
To
ol
s
to
e
ri val
sk u
s at
of e
cl en
ie v
nt iro
s' n
ac m
tiv en
iti tal
es
en Aw
vi ar
ro e
nm ne
en ss r
ta ai
l i sin
m g
pa o
ct n
s
1
pr en Sp
od vir ec
uc on ific
ts m lo
an en an
d/ tal s l
or ly ink
pr frie ed
ac n to
tic dly
es
20
Exhibit 2B.16a: Environmental Policies in Place
to the ‘Environment and Social Management (ESM)
Framework. As PPAF-funded institutions, these
MFIs are trained on the ESM framework and required
to provide quarterly progress update on ESM compliance. External environmental and/or social performance audits are commissioned by PPAF to monitor
and physically verify PO compliance of the ESMF. Finally, MFIs are encouraged to incorporate ESM objectives into the Terms of Partnership that they signs
with their respective community based institutions.
While the reporting is relatively new in this respect,
the industry is taking positive steps in moving towards supporting/financing more environmentally
sustainable businesses. There is still a need for more
comprehensive work in this area, specifically a natural disaster risk mitigation strategy not just to protect MFPs but also clients and their businesses.
RSPs
1
4
4
5
3
1
1
ie Pr
nd od
u
re ly p ct
cy ra s r
cl ct ela
in ic t
g, e ed
w s ( to
as e.g e
te . o nv
m rg ir
an a on
ag nic m
em fa ent
r
en m ally
t e ing
tc ,
)
1
fr
ro
du
c
en ts
er rel
g a
bi y ( ted
og e. t
as g. s o r
di ola ene
ge r w
st pa ab
er n le
s els
et ,
c)
1
1
3
P
r
im e odu
pr ffic ct
ov ie s r
ed nc ela
co y (e te
ok .g d t
in . in o e
g s n
st ul er
ov at g
e ion y
et ,
c)
2
MFBs
1
6
5
MFIs
7
P
8
Exhibit 2B.16b: Environmentally friendly Products/Services offered
38
39
Section 2
The Way Forward
Section 3
The Way
Forward
40
Section 3
The Way
Forward
With the industry growing at a double digit rate over the last few years buoyed by an enabling regulatory and policy
environment some of the key challenges and opportunities faced by the practitioners are as follow:
Inclusive Finance and Microfinance Industry
Financial exclusion has been labelled the “new apartheid”. Access to financial services plays an important
role in the development of the financial sector and
the economy at large.
Access to financial services is one of the key challenges faced by the country. Keeping this in view the
State Bank of Pakistan in collaboration with World
Bank (WB) has recently developed the National Financial Inclusion Strategy (NFIS) with an aim of improving access to financial services for the unbanked
population of the country.
41
Pakistan continues to lag behind in the World Bank’s
Financial Inclusion Index (FINDEX). Only 8.7 percent
of the adult population in the country has an account
with a formal financial institution as compared to
45.5 percent for South Asia . In addition, only 3.3 percent of the adults placed their savings with financial
institutions while only 1.5 percent borrowed from financial institutions as against 39.3 percent who borrowed from family and informal money lenders . This
shows there is a huge unmet demand which has not
yet been tapped by the formal financial sector forc-
ing large segments of population to rely on informal
sources for financial services.
The Microfinance industry can play a crucial and critical role in the inclusive finance sphere. It can offer
a wide array of financial services including not only
credit products but also savings, insurance and payments services. With its potential clientele being
those who belong to the lower income strata of the
society, the microfinance industry can bring a large
segment of population into formal financial system
as compared to other players in the financial industry. Utilizing its synergies with branchless banking
and outreach in rural areas the sector can be an effective conduit for improving access to financial services across the country. Areas like low cost housing
segments, loans to small and marginalized farmers,
value chains and health insurance can be best extended by the microfinance industry as compared
to other players in the financial sectors. It is felt that
clear demarcation is needed for the role of MFPs in
the inclusive finance sphere in the upcoming NFIS.
The Way Forward
Towards Accelerated Growth
The microfinance industry in the country despite the
enabling environment and progressive regulatory
framework, investments in industry infrastructure
and institutional strengthening, and entry of a new
range of practitioners in the market, has been growing at a rate far below its potential in the past few
years. Current penetration of 11.5 percent is inadequate showing that practitioners have to cover a lot
of ground. Despite all its achievements to date, the
industry is far from realizing its potential and contributing significantly to the financial inclusion agenda in Pakistan. Policymakers and financial industry
stakeholders are starting to analyze and question
the ability of the microfinance sector to make a significant and large scale contribution to the financial
exclusion challenge in the country: with such an enabling environment and extensive, sustained support
from the donors, why is the sector unable to grow
and achieve the scale it needs to have? Thus, in order
for microfinance to remain relevant and become an
important, integral part of the financial industry, the
sector needs to demonstrate it can scale up and grow
sustainably, and resultantly have meaningful impact
on the financial inclusion landscape within Pakistan
and globally.
According to recently authored strategy paper by
PMN on growth, setting an ambitious credit outreach
target for itself will not only allow the industry to fur-
ther its goal of inclusive finance but also make it a
permanent feature of the financial landscape. Moreover, that level of scale and growth would permanently place microfinance on the policy and growth
agenda of the State. A larger size would also increase the industry’s ability to absorb distortions and
threats emanating from external interference either
in the form of government led credit schemes or issues pertaining to pricing of loans.
MFPs can utilize government directed credit schemes
and government initiatives like credit guarantees for
small and marginalized farmers and low cost housing guarantee schemes to increase outreach in rural
areas and enter new market segments like low cost
housing. In addition, the fast growing branchless
banking segment can be utilized to expand outreach
by identifying potential clients based on cell phone usage similar what is being done by M-Shawri in Kenya.
Moreover, apprehensions regarding whether growth
at accelerated growth could lead to delinquency crisis
as witnessed globally in 2008 in Nicaragua, Bosnia,
Morocco and Pakistan have been addressed by setting up of MF-CIB, launch of responsible finance and
client protection initiatives, strengthening of corporate governance among the players and developing
regulatory umbrella for the entire sector.
Pakistan’s economy has witnessed the launch of a
number of government sponsored credit schemes by
various administrations over the years. The aim of
these schemes has largely been provision of employment coupled with poverty alleviation. The conduit
for these schemes has generally been public sector
banks and DFIs whose number has substantially
declined due to privatization over the last few decades. Moreover, the result of the schemes has been
far from satisfactory. The fault largely lies with the
structure of the scheme and the design of the products offered to clients.
The incumbent government soon after taking office
in 2013 launched two credit schemes namely the
Prime Minister (PM) Youth Loan Scheme and Prime
Minister (PM) Interest-Free Loan Scheme with an
aim of employment generation and poverty alleviation. The interest-free loan scheme was s source of
concern for the microfinance industry stakeholders
as it had the potential to distort the conventional
microfinance industry. However, the scheme was
structured and designed in such a manner that rather than overlapping with conventional microfinance
it now complements it. The funding for the scheme
has been routed through the national apex, PPAF,
and loans are extended by selected MFPs to clients
Only clients falling below 40 on the poverty scorecard
and belonging to those areas where there little or no
outreach of conventional microfinance.
This successful adaptation of a government credit scheme can work as prelude to how other similar
schemes can be structured and designed in a man-
Adapting Government Credit Schemes
42
Section 3
ner which would result in a win-win situation for
all. Similarly, PM Youth Loan Scheme under which
subsidized loans are extended to existing and new
business can be modified and adapted. In addition,
other recently announced government initiatives like
the Credit Guarantee Scheme for Small & Marginalized Farmers and Low Cost Housing Guarantee can
be utilized for expanding outreach in rural areas and
housing segments.
experience in extending non-collateralized loans to
borrowers from lower income strata. This experience, market awareness and skill set can be used to
channel government credit initiatives. Finally, for an
industry which counts funding as one of the key constraints to growth these credit schemes can prove to
be quite useful.
Moreover, the schemes can be handled efficiently
and generate the required impact if they are channelized through MFPs. Microfinance practitioners have
Impact Investment
According to Global Impact Investing Network (GIIN),
“Impact investments are investments made into
companies, organizations, and funds with the intention to generate social and environmental impact
alongside a financial return.” The impact investors
provide funds, both equity and debt, to meet the
world’s most pressing challenges in areas like agriculture, housing, education, renewable energy,
healthcare, clean technology, and access to financial
services. There are over three hundred impact funds
globally. In 2012, over USD 8 billion were committed
by impact investors as compared to USD 2.5 billion in
2010 . More than 70 percent of the impact investing
allocations is to the microfinance industry .
In its report “The Landscape for Impact Investing in
South Asia”, GIIN has stated that Pakistan has one of
the largest impact investment landscapes in the region. Impact investors have deployed over USD 2 billion so far. There are a variety of impact investors in
the country including fund managers, high net worth
43
individuals, development financial institutes (DFIs)
and other financial institutions. However, most of the
capital has been deployed by DFIs and mostly in the
form of debt. The majority of the impact investments
in the country so far have been in the energy sector.
With increasing global popularity of impact investing
and additional funds being committed by impact investors, microfinance players in Pakistan provide an
ideal channel for these investors. Moreover, both impact investors and microfinance players share similar
objectives i.e. social impact and also, to earn a near
market return on their investments. MFPs can work
with impact investors for specific interventions like
access to financial services, funding low cost private
schools, provide off-grid energy solutions and low
cost housing. This would require MFPs to develop
innovative products to tap these market segments.
Impact investments provide MFPs with an opportunity to not only grow but also enter into other market
segments.
Diversifying Funding Sources
A key challenge for the microfinance industry in
Pakistan to grow and reach scale is funding. MFPs
have been relying for funding upon the national apex,
guarantee schemes and deposits (in case of MFBs
only). To grow and expand outreach MFPs will have
to diversify their sources of funds to meet financing
needs in the future.
Deposits
MFBs have witnessed exponential growth in deposit mobilization in the last few years. The growth has
come at the back of above market rates being offered
to institutional clients and high net-worth individuals. However, opening of national clearing house
membership for MFBs will allow them to mobilize
The Way Forward
retail deposits effectively. This would lead to not only
increase in deposits but also lower cost of funds. In
addition as a result of recent biometric re-verification
of SIMs, m-wallet accounts can now be opened without even visiting an agent by customers have had
their SIM verified. This initiative is a big opportunity
for the sector to migrate the large number of overthe-counter users of branchless banking services to
m-wallets. With this step MFBs can extend financial
services to a large number of unbanked client and
enhance their deposit base.
To be able to truly extend saving products to client
at the base of pyramid innovative products need to
be developed. Currently, clients are being offered a
stereotypical product mix which is similar to the one
being offered by commercial banks. In addition, MFBs
can link up with RSPs and MFIs to attract the savings
being mobilized by them and parked at various financial institutes since non-bank MFPs are legally not
allowed to mobilize deposits. This would require creating partnerships and incentive structure between
deposit-taking and non-deposit taking institutes.
Debt
Currently, the practitioners are availing debt facilities
primarily from the national apex and funds obtained
under the two loan guarantee schemes. While the
bigger players have been successful is raising funds
from commercial banks which are partially or fully
secured by the guarantee funds but the same cannot be said for the mid and small sized practitioners.
But recent enhancement of risk coverage MFCG to 60
percent for these MFPs will better place them to tap
finances from commercial sources.
In order to meet their increasing funding needs,
MFPs would need to explore options to avail loans
from international lenders and also tap debt capital
markets. A number of international development financial institutions (DFIs) and microfinance investment vehicles (MIVs) have been exploring the market
over the years for possible debt placements. However, the high hedging costs and availability of funds
at competitive rates locally had been the inhibiting
factors. But recent growth in outreach and lowering
of hedging premiums has led to two successful debt
placements by an international lender. With continued investor interest in the sector, there is potential
for players to tap international lenders to meet their
funding needs. Debt capital markets offer microfinance practitioners another avenue to raise funds.
Although, there have been only two instances when
MFPs have issued redeemable capital but their success coupled with the extension of MCGF coverage to
debt capital markets make it an attractive option for
practitioners. In addition as large firms move globally
towards creating shared values which focuses on the
connection between societies and economic progress, microfinance practitioners can tap these shared
value initiatives to meet their funding needs.
Capacity Building Program: Laying the foundation for a
With the sector growing at a steady rate, the demand for capacity building initiatives, in terms of the
provision of consistent training opportunities, far
outstripped the supply. Since then the Microfinance
sector has made many strides through an enabling
environment created by the State Bank of Pakistan,
Pakistan Poverty Alleviation Fund, UK-Aid’s DFID,
PMN and other stakeholders, but the goal of achieving scale has yet to be realized. It is believed that one
of the major impediments to achieving growth and
sustainability is lack of staff capacities, especially
at the middle and lower management levels at the
MFPs. It is also true that trained human resource is
one of the pre-requisites for a strong, dynamic and
growing Microfinance sector, which would need to
invest in enhancing capacity by imparting the necessary knowledge and skills which will help equip staff
to shoulder their responsibilities effectively in the microfinance organizations they are employed.
Efforts to develop the capacity of the human resource
in the past were primarily focused on undertaking
one-off training programs while the demand for such
trainings has been increasing rapidly. The unavailability of adequate external training facilities has also
minimized the long-term impact of the various training programs carried out arbitrarily by different sector level institutions. With less dependable sources
to provide assistance to help meet the technical and
management training needs for microfinance and for
Training Centre of Excellence for MFPs
44
Section 3
Inclusive Finance in general, most of the MFPs are
currently grappling with issues related to growth and
cost effectiveness.
However, to reach scale will be challenging for the
sector given its current capacity and state. Human
Resource Development is a key area that needs to be
focused on to achieve such scale, as mentioned earlier. HRD is also of critical importance for the industry given the labor intensive nature of the work and
limited trained staff is considered a major barrier to
achieving scale through product diversification. With
the focus on growth, the staff in the microfinance industry is estimated to increase four fold over the next
five years.
With current staff capacity already being a major issue, a strategic approach to HRD at the sector level
needs to be undertaken. Currently PMN facilitates
the provision of opportunities to the senior management tier to enhance its capacity through exposure
visits, corporate governance and international trainings with the primary focus on strategic leadership.
It is also important to know that the industry is comprised of diverse players each having its own different set of requirements. Whereas large for-profit organizations can support in-house training programs
for their mid and lower level staff, medium sized and
smaller organizations which constitute the bulk of
the industry cannot afford similar trainings.
Keeping this in view, the establishment of a Training
Centre of Excellence for the Microfinance Providers
would be the need of the hour, where technical and
managerial trainings can be offered on consistent
basis to the increasing number of mid and operational level staff which will be employed in the coming
years as the sector moves up on the growth trajectory. Consequently, the long term objective of increasing outreach through the development of innovative
products will come to fruition.
Micro, Small & Medium Enterprise (MSME) Lending
Micro and Small enterprises in Pakistan face serious issues with access to formal finance given their
informal nature, lack of documentation and acceptable collateral. Although commercial banks have had
some success with downscaling to meet the needs of
medium sized firms in Pakistan, small entrepreneurs
remain off their radar and it seems highly unlikely
that the mainstream banks will serve this segment in
the near future. However, MFPs, especially the MFBs
and large MFIs, seem well positioned to enter this
market due to its similarities with the microfinance
clientele.
45
During the year 2012, the State Bank of Pakistan has
revised the loan limits for MFBs from PKR 150,000 to
PKR 500,000 in order to promote enterprise lending.
Furthermore, the State Bank also initiated the SME
Guarantee Fund during the same period. The purpose
of the fund was to facilitate MFBs in raising capital
from financial institutions in order to move up-market.
With the introduction of the above mentioned government initiatives, majority of the MFBs have been
successfully piloting microenterprise lending and are
continuously improving their product offerings to
fully cater the niche market. Many MFBs are in the
process of establishing dedicated departments for
MSE lending and have also trained their staff with
the necessary skills for serving the needs small enterprises.
However, this shift will represent some challenges to
MFPs lacking expertise in larger enterprise lending.
It requires significant up-scaling of loan sizes from
the present average loan of PKR 28,269 . In order to
fully capture the enterprise segment, MFBs will need
to treat micro and small enterprise clients differently from the conventional retail segment. Emphasis
should be on product development that can fulfill the
requirements of small enterprises while not burdening the resources of the microfinance banks.
Moreover, the focus of conventional microfinance
has been on household repayment capacity which
will now have to shift to the enterprise’s repayment
capacity. This will require investment into understanding the demands and needs of the market segment, building a different skill set amongst field staff,
finding sources of funds to meet the financing needs
driven by the relatively larger loan sizes, and understanding the risks.
Despite many challenges, MFPs might bring important advantages to the MSE market. Compared to
mainstream banks, MFPs may have closer relationships with their customers, maintaining a high level of trust and making it easy to understand client
The Way Forward
needs. Another advantage is that MFPs often have
faster lending procedures and require less collateral than commercial banks. Finally, MFPs can reach
customers who do not have access to banks or who
face serious obstacles, such as their own informality
or high bank fees.
Anti-Money Laundering (AML), Customer Due Diligence
(CDD) and Terrorist Financing
Over the past year, the SBP has taken comprehensive
measures to combat money laundering and terrorist financing activities. These measures were visible
in the revision of prudential regulations for MFBs
in 2014 which introduced a broad set of guidelines
covering areas such as customer identification and
verification requirements, ongoing and enhanced due
diligence, record retention, cash and suspicious transactions reporting in line with standards prescribed by
Financial Action Task Force (FATF). Moreover, SBP
has allowed MFBs to take additional measures as per
risk involved in line with the FATF recommendations.
The AML and CDD requirements may entail some
MFBs to enhance their internal controls by updating
their client in-take forms, operating procedures, and
information systems. Similarly, training staff in new
procedures is vital to the successful implementation
of the AML and CDD guidelines. In addition, these
regulations would impact branchless banking where
operators are aiming for convenience and hassle
opening of m-wallets. This would require balancing
of AML and CDD requirements with ease of opening
of accounts.
The guidelines introduced by SBP are aimed to safeguard MFBs from the threat of money laundering,
terrorist financing and other related unlawful activities which can damage the national financial system.
Illegitimate financial holdings and assets are unreliable sources of investment capital for sustainable
economic development and can destabilize the national economy.
Agriculture is the backbone of the economy for majority of the developing countries. The potential of
this segment becomes fully clear if we look at the
value chains that link farm production to rural trading
and other sectors of the economy. These chains show
that farmers do not operate in isolation, but are part
of a wider system which encompasses processors,
traders, transporters, input suppliers and retailers.
However, the lack of financing limits the growth potential of different micro-entrepreneurs at different
parts of the value chain. Private financial institutions
have tended to regard such micro-entrepreneurs as
un-bankable as they lack the kind of collateral and
guarantees banks demand before lending. For bankers it is easier and more lucrative to provide a handful
of large loans to well-established businesses, rather
than lots of small loans to such micro-entrepreneurs.
In Pakistan, the State Bank of Pakistan is taking
commendable steps to ensure the success of value
chains by facilitating various chain actors. A component of these initiatives is the ‘Value-Chain Contract
Farmer Financing’ scheme to build a link between
banks and small farmers who have no access to formal financing .
The introduction of the Value Chain Contract Farmer
Financing scheme will enable farmers to avail financing from banks backed by a processor’s guarantee
and in return buyers/processors may get assurance
of getting required quantity and quality of agricultural produce. Under the scheme, banks will be accepting guarantees from a lead firm acting as a bridge
between banks and farmers. The term ‘lead firm’ applies to the processors of agricultural produce, input
suppliers, stockist, a marketing company, trader or
exporter.
Agriculture Value Chains
Furthermore, SBP has also introduced ‘Warehouse
46
Section 3
Receipt Financing’ to reduce uncertainty and increase
efficiency in the agriculture market. The warehouse
receipts system, also known as inventory credits, can
facilitate financing for inventory or products held in
storage. Warehouse receipt financing is a collateralized commodity transaction where the goods themselves provide security for the loan. This type of financing allows lenders to immediately sell off a very
liquid asset, namely the commodities they grow, if a
47
farmer defaults on the loan. The underlying collateral is usually a soft commodity like wheat, rice, maize,
cotton and other grains .
On the whole, agriculture value chains provide an
ideal platform to extend credit in the rural areas at a
relatively lower cost and reduced risk for the MFPs.
The Way Forward
48
49
Section 3
Annexures
Annexures
Annexures
50
Annexures
AI - Performance
Indicators of Industry
2014
Infrastructure
2010
2011
2012
2013
2014
35,826,211
48,569,411
61,928,036
81,557,894
105,443,135
1,405
1,550
1,630
1,606
2,026
12,005
14,202
15,153
17,456
21,516
Total Assets
17.6%
35.6%
27.5%
31.7%
29.3%
Branches (Including
Head Office)
15.1%
10.3%
5.2%
-1.5%
26.2%
3.9%
18.3%
6.7%
15.2%
23.3%
2010
2011
2012
2013
2014
Total Assets (PKR
000)
35,826,211
48,569,411
61,928,036
81,557,894
105,443,135
Total Equity (PKR
000)
8,359,260
10,314,307
11,679,373
17,049,706
22,873,920
Total Debt (PKR 000)
27,466,951
38,255,104
25,876,598
26,913,359
34,682,369
Commercial Liabilities (PKR 000)
4,910,265
12,332,456
19,361,179
21,662,200
18,679,724
Deposits (PKR 000)*
10,132,332
13,908,759
20,840,990
32,925,558
42,715,846
(PKR 000)
20,295,915
24,854,747
33,877,284
46,613,582
63,531,465
Equity-to-Asset
Ratio
23.3%
21.2%
18.9%
20.9%
21.7%
Commercial Liabilities-to-Total Debt
17.9%
32.2%
74.8%
80.5%
53.9%
3.29
3.41
2.22
1.58
1.52
49.9%
56.0%
61.5%
70.6%
67.2%
Total Assets (PKR
000)
Branches (Including
Head Office)
Total Staff
Growth Rate
Total Staff
Financing Structure
51
Ratios
Debt-to-Equity Ratio
Deposits-to-Gross
Loan Portfolio
*Only MFB deposits included
AI - Performance Indicators of Industry 2014
2010
2011
2012
2013
2014
Deposits-to-Total
Assets
28.3%
28.6%
33.7%
40.4%
40.5%
Gross Loan Portfolio-to-Total Assets
56.7%
51.2%
54.7%
57.2%
60.3%
*Only MFB deposits included
2010
2011
2012
2013
2014
1,567,355
1,661,902
2,040,518
2,392,874
2,997,868
811,520
917,058
1,275,387
1,442,197
1,692,451
20,295,915
24,854,747
33,877,284
46,613,582
63,531,465
Annual per capita
income (PKR)*
105,300
107,505
118,085
143,808
143,808
Number of Loans
Outstanding
1,547,197
1,661,902
2,040,518
2,401,849
2,998,895
Depositors**
764,271
1,332,705
1,730,823
2,150,675
5,675,437
Number of Deposit
Accounts
764,271
1,332,705
1,730,823
2,998,641
5,675,437
Number of Women
Depositors
64,159
259,104
334,994
837,144
2,503,582
10,132,332
13,908,759
20,840,990
32,925,559
42,715,786
Weighted Avg.
Weighted Avg.
Active Borrowers
Active Women
Borrowers
(PKR 000)
Deposits Outstanding
Proportion of Active
Women Borrowers
(%)
51.8%
55.2%
62.5%
60.3%
56.5%
12,949
14,956
16,602
19,480
21,192
Average Loan
Balance per Active
Borrower/Per Capita
Income
12.3%
13.9%
14.1%
13.5%
14.7%
Average Outstanding
Loan Balance (PKR)
13,118
14,956
16,602
19,407
21,185
Average Outstanding
Loan Balance /Per
Capita Income
12.5%
13.9%
14.1%
13.5%
14.7%
Proportion of Active
Women Depositors
(%)
8.4%
19.4%
19.4%
38.9%
44.11%
Average Saving
Balance per Active
Depositor (PKR)
13,258
10,436
12,041
15,309
7,526
Active Deposit Account Balance (PKR)
13,258
10,436
12,041
10,980
7,526
Average Loan
Balance per Active
Borrower (PKR)
* Source: http://www.sbp.org.pk/reports/stat_reviews/Bulletin/2012/Feb/EconomicGrowth.pdf
** Only MFB deposits included
Outreach
52
Annexures
Financial Performance
2010
2011
2012
2013
2014
6,122,154
7,998,956
10,040,720
13,542,893
18,581,489
Income from investments
870,809
1,203,306
1,774,610
1,742,975
2,051,547
Income from other
sources
528,457
899,713
816,461
2,093,035
3,707,417
Income from loan
portfolio
Total revenue
7,521,420
10,101,975
12,631,792
17,378,903
24,340,453
Less : financial
expense
2,016,795
2,905,049
3,974,467
4,767,589
5,451,197
Gross financial
margin
5,504,624
7,196,926
8,657,325
12,611,314
18,889,256
Less: loan loss provision expense
745,660
623,988
643,991
658,812
794,500
Net financial margin
4,758,964
6,572,938
8,013,334
11,952,503
18,094,756
Personnel expense
2,819,891
3,345,284
3,784,676
5,032,342
6,557,709
Admin expense
1,961,816
2,446,750
2,886,025
3,880,920
5,951,408
Less: operating
expense
4,781,707
5,792,035
1,342,633
8,913,262
12,509,117
257,651
380,993
1,546,240
1,084,982
2,658,248
4,039,399
Other Non operating
expense
Net income before
tax
Provision for tax
(22,742)
780,903
(7,047)
116,314
152,380
503,118
614,684
(15,696)
664,589
932,602
2,155,130
3,424,715
Adjusted Financial
Expense on Borrowings
-
372,524
205,943
181,422
113,553
Inflation Adjustment
Expense
-
(3,073)
870
1,152
916
Adjusted Loan Loss
Provision Expense
-
357,688
49,456
18,743
13,625
Total Adjustment
Expense
-
727,138
256,270
201,317
128,095
(15,696)
(62,549)
676,332
1,953,814
3,296,620
Average total assets
30,399,088
42,282,393
57,182,714
70,192,281
95,494,664
Average total equity
7,854,713
8,719,204
11,594,943
14,513,187
Net income/(loss)
Net Income/(Loss)
After Adjustments
Ratios
53
20,629,780
weighted avg.
Adjusted Return-on-Assets
(0.1%)
(0.1%)
1.2%
3.3%
3.5%
Adjusted Return-on-Equity
(0.2%)
(0.7%)
5.8%
16.1%
16.0%
Operational Self
Sufficiency (OSS)
99.7%
108.4%
109.4%
118.1%
119.9%
Financial Self Sufficiency (FSS)
81.7%
100.5%
107.0%
116.5%
117.7%
Operating Income
2010
2011
2012
2013
2014
Revenue from Loan
Portfolio
6,122,154
7,998,956
10,040,720
13,542,893
18,581,489
Total Revenue
7,521,420
10,101,975
12,631,792
17,378,903
24,821,486
Adjusted Net Operating Income / (Loss)
-22,742
5,252
828,712
2,456,931
3,286,779
Average Total Assets
30,399,088
42,282,393
57,182,714
70,192,281
95,494,664
(Opening Balance)
16,948,466
20,576,342
25,743,757
34,668,730
48,423,008
(Closing Balance)
20,295,915
24,854,747
33,877,284
46,105,712
63,531,465
Average Gross Loan
Portfolio
18,622,190
22,715,544
29,810,520
40,387,221
55,977,237
15.0%
11.2%
10.4%
9.2%
8%
Inflation Rate *
weighted avg.
Total Revenue
Ratio (Total Revenue-to-Average Total
Assets)
24.7%
23.9%
22.3%
24.8%
26.0%
Adjusted Profit
Margin (Adjusted
Profit/(Loss)-to-Total Revenue)
(0.3%)
0.1%
7.0%
14.1%
13.2%
32.9%
35.2%
34.2%
33.5%
34.6%
15.5%
21.6%
21.6%
22.3%
24.4%
* Source: http://www.sbp.org.pk/reports/stat_reviews/Bulletin/2012/Feb/IND.pdf
2010
2011
2012
2013
2014
Adjusted Total
Expense
7,544,162
10,096,723
11,803,080
14,540,979
20,842,120
Adjusted Financial
Expense
2,016,795
3,304,504
4,181,281
4,950,162
5,742,091
Adjusted Loan Loss
Provision Expense
745,660
1,000,184
693,447
677,555
808,125
Adjusted Operating
Expense
4,781,707
5,792,035
6,928,352
8,913,262
14,291,904
Adjustment Expense
-
775,651
256,270
201,317
453,639
30,399,088
42,282,393
57,182,714
Ratios
70,192,281
95,494,664
Weighted avg.
Weighted avg.
Adjusted Total
Expense-to-Average
Total Assets
24.8%
23.9%
20.6%
20.7%
21.8%
Adjusted Financial
Expense-to-Average
Total Assets
6.6%
7.8%
7.3%
7.1%
6.0%
Operating Expense
54
Annexures
2010
2011
2012
2013
2014
Adjusted Loan
Loss Provision
Expense-to-Average
Total Assets
2.5%
2.4%
1.2%
1.0%
0.8%
Adjusted Operating
Expense-to-Average
Total Assets
15.7%
13.7%
12.1%
12.7%
15.0%
Adjusted Personnel
Expense
9.3%
7.9%
6.6%
7.2%
6.9%
Adjusted Admin
Expense
6.5%
5.8%
5.0%
5.5%
6.2%
Adjustment Expense-to-Average
Total Assets
0.0%
1.8%
0.4%
0.3%
0.5%
2010
2011
2012
2013
2014
Operating Expense
(PKR 000)
4,781,707
5,792,035
6,928,352
8,913,262
12,745,665
Personnel Expense
(PKR 000)
2,819,891
3,345,284
3,784,676
5,032,342
6,794,257
Average Gross Loan
Portfolio (PKR 000)
18,622,190
22,715,544
29,810,520
40,387,221
55,977,237
Average Number of
Active Borrowers
1,567,355
1,661,902
2,040,518
2,350,650
2,997,868
Average Number of
Active Loans
1,567,355
1,661,902
2,040,518
2,359,625
2,998,895
weighted avg.
weighted avg.
Operating Efficiency
55
Adjusted Operating
Expense-to-Average
25.7%
25.5%
23.2%
22.1%
22.8%
Adjusted Personnel
Expense-to-Average
15.1%
14.7%
12.7%
12.5%
12.1%
Average Salary/
Gross Domestic
Product per Capita
2.23
2.19
2.12
2.00
2.2
Adjusted Cost per
Borrower (PKR)
3,051
3,485
3,395
3,792
4,252
Adjusted Cost per
Loan (PKR)
3,051
3,485
3,395
3,777
4,250
2010
2011
2012
2013
2014
Number of Active
Borrowers
1,567,355
1,661,902
2,040,518
2,255,126
2,997,868
Number of Active
Loans
1,567,355
1,661,902
2,040,518
2,263,432
2,997,868
Number of Active
Depositors
764,271
1,332,705
1,730,823
1,897,872
5,675,437
Number of Deposit
Accounts
764,271
1,332,705
1,730,823
2,707,872
5,675,437
12,005
14,202
15,153
15,673
19,281
5,148
7,165
7,541
Total Staff
Total Loan Officers
6,892
8,838
weighted avg.
weighted avg.
Borrowers per Staff
131
117
135
144
156
Loans per Staff
131
117
135
144
156
Borrowers per Loan
Officer
304
232
271
327
328
Loans per Loan
Officer
304
232
271
328
328
Depositors per Staff
64
94
114
121
294
Deposit Accounts
per Staff
64
94
114
173
294
42.9%
50.5%
49.8%
44.0%
45.8%
Personnel Allocation
Ratio
Productivity
56
Annexures
Risk
57
2010
2011
2012
2013
2014
Portfolio at Risk >
30 days
829,314
793,966
1,232,842
1,157,297
659,418
Portfolio at Risk >
90 days
577,972
516,623
1,020,316
932,166
379,637
Adjusted Loan Loss
Reserve
733,338
623,988
759,621
708,355
1,189,884
Loan Written Off
during Year
335,463
592,429
675,835
615,293
1,222,076
20,295,915
24,854,747
33,877,284
46,105,712
63,531,465
Average Gross Loan
Portfolio
18,622,190
22,715,544
29,810,520
40,387,221
55,977,237
weighted avg.
weighted avg.
Portfolio at Risk
(>30)-to-Gross Loan
Portfolio
4.1%
3.2%
3.6%
2.5%
1.0%
Portfolio at
Risk(>90)-to-Gross
Loan Portfolio
2.8%
2.1%
3.0%
2.0%
0.6%
Write Off-to-Average
1.8%
2.6%
2.3%
1.5%
2.2%
Risk Coverage Ratio
(Adjusted Loan Loss
Reserve-to-Portfolio
at Risk > 30 days)
88.4%
78.6%
61.6%
61.2%
180.4%
58
Annexures
AII - Performance
Indicators of
Individual MFPs 2014
Infrastructure
MFB
KBL
TMFB
Total Assets (PKR 000)
16,692,434
Total Equity (PKR 000)
3,285,461
13,406,972
Total Liabilities (PKR 000)
Branches (including Head Office)
Personnel
POMFB
FMFB
NRSP-B
FINCA
16,393,293
1,114,932
10,674,730
11,797,616
6,380,471
2,843,921
1,069,234
1,237,139
2,126,104
1,263,975
13,549,372
45,698
9,437,591
9,671,512
5,116,495
118
149
16
100
58
100
2,622
2,058
206
1,169
1,429
1,268
MFB
AMFB
WASEELA
U-Bank
Sub
1,758,955
2,540,847
1,832,009
69,185,285
542,609
1,036,330
956,749
14,361,522
1,216,346
1,504,517
875,260
54,823,764
17
41
28
627
271
412
338
9,773
OCT
KASHF
SAFCO
DAMEN
CSC
GBTI
681,771
5,311,217
611,905
1,331,084
747,631
125,416
Personnel
MFI
283,345
414,033
93,172
251,241
62,629
98,135
398,426
4,897,184
518,733
1,079,843
685,003
27,281
21
178
27
30
17
13
100
2,064
245
228
180
67
FFO
ASA-P
BRAC-P
JWS
Sungi
ORIX
360,506
59
Personnel
MFI
350,324
2,810,461
1,238,183
725,716
114,187
17,024
1,140,198
113,310
236,474
90,243
65,249
333,299
1,670,263
1,124,873
489,243
23,914
295,257
AII - Performance Indicators of Individual MFPs 2014
MFI
FFO
Personnel
ASA-P
BRAC-P
JWS
Sungi
ORIX
18
171
68
25
4
10
176
1,044
610
197
54
70
MFI
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
938,441
107,524
214,795
115,388
274,208
10,295
321,592
23,072
39,750
31,039
61,005
9,452
616,849
84,452
175,044
84,349
213,203
620
35
6
15
5
11
6
297
46
119
26
158
14
BEDF
OPD
SAATH
SRDO
SVDP
DEEP
Personnel
MFI
24,429
137,221
83,441
79,728
138,089
1,300
12,048
18,587
20,213
6,260
36,606
-2,336
12,381
118,634
63,229
73,469
101,483
3,636
2
6
4
4
4
2
14
59
25
21
47
15
Personnel
MFI
BAIDARIE
Wasil
VDO
Akhuwat
Sub
120,480
205,538
56,039
4,048,211
20,963,530
20,713
-121,269
3,352
767,292
4,112,428
99,767
326,807
52,687
3,280,919
16,850,847
Personnel
3
17
2
261
965
56
82
16
1,549
7,579
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
9,777,107
2,522,339
74,496
1,557,256
1,363,123
15,294,320
2,633,849
1,272,129
26,965
387,618
79,409
4,399,970
7,143,258
1,250,210
47,559
1,169,638
1,283,714
10,894,379
161
61
9
151
52
434
2,572
643
26
589
334
4,164
Sub MFB
Sub MFI
Sub RSP
Total
105,443,135
Personnel
69,185,285
20,963,530
15,294,320
14,361,522
4,112,428
4,399,970
22,873,920
54,823,764
16,850,847
10,894,379
82,568,989
Personnel
627
965
434
2,026
9,773
7,579
4,164
21,516
RSP
60
Annexures
Financing Structure in PKR ‘000
MFB
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
16,692,434
16,393,293
1,114,932
10,674,730
11,797,616
6,380,471
Total Equity
3,285,461
2,843,921
1,069,234
1,237,139
2,126,104
1,263,975
Total Debt
3,729,877
239,211
-
289,880
4,204,216
201,100
2,182,377
-
-
-
-
-
Total Assets
- Subsidized debt*
1,547,500
239,211
-
289,880
4,204,216
201,100
Total Deposits
- Commercial debt
8,682,473
12,261,354
22,128
8,749,901
5,159,810
4,656,177
Total Liabilities
13,406,972
13,549,372
45,698
9,437,591
9,671,512
5,116,495
Gross loan portfolio
12,238,252
8,981,390
223,832
4,479,999
5,192,071
4,028,415
Weighted Avg.
Equity-to-asset ratio
19.7%
17.3%
95.9%
11.6%
18.0%
19.8%
Commercial liabilities-to-total debt
41.5%
100.0%
0.0%
100.0%
100.0%
100.0%
1.1
0.1
0.0
0.2
2.0
0.2
Deposits-to-gross loan portfolio
70.9%
136.5%
9.9%
195.3%
99.4%
115.6%
Deposits-to-total assets
52.0%
74.8%
2.0%
82.0%
43.7%
73.0%
6.5%
6.1%
1.1%
6.5%
8.5%
7.4%
73.3%
54.8%
20.1%
42.0%
44.0%
63.1%
Debt-to-equity ratio
Cost of funds
Gross loan portfolio-to-total assets
*Below market rate
MFB
AMFB
WASEELA
U-Bank
Sub
Total Assets
1,758,955
2,540,847
1,832,009
69,185,285
Total Equity
542,609
1,036,330
956,749
14,361,522
-
-
-
8,664,284
- Subsidized debt*
-
-
-
2,182,377
- Commercial debt
-
-
-
6,481,907
Total Deposits
1,193,507
1,287,919
702,579
42,715,846
Total Liabilities
1,216,346
1,504,517
875,260
54,823,764
798,673
500,402
346,493
Total Debt
36,789,528
Weighted Avg.
61
Cost of funds
*Below market rate
30.8%
40.8%
52.2%
20.8%
0.0%
0.0%
0.0%
74.8%
0.0
0.0
0.0
0.6
149.4%
257.4%
202.8%
116.1%
67.9%
50.7%
38.4%
61.7%
6.6%
2.3%
2.4%
6.7%
45.4%
19.7%
18.9%
53.2%
MFI
OPP
KASHF
SAFCO
DAMEN
CSC
GBTI
125,416
Total Assets
681,771
5,311,217
611,905
1,331,084
747,631
Total Equity
283,345
414,033
93,172
251,241
62,629
98,135
Total Debt
365,663
4,692,724
498,695
1,074,253
515,286
26,028
26,028
- Subsidized debt*
170,333
1,840,000
444,695
1,039,409
396,342
- Commercial debt
195,330
2,852,724
54,000
34,844
118,944
-
-
-
-
-
Total Deposits
-
Total Liabilities
398,426
4,897,184
518,733
1,079,843
685,003
27,281
460,538
3,752,325
422,532
1,003,160
381,000
81,252
Weighted Avg.
41.6%
7.8%
15.2%
18.9%
8.4%
78.2%
53.4%
60.8%
10.8%
3.2%
23.1%
0.0%
1.3
11.3
5.4
4.3
8.2
0.3
-
-
-
-
-
-
-
-
-
-
-
-
Cost of funds
7.5%
11.2%
6.6%
10.4%
8.3%
11.4%
67.6%
70.6%
69.1%
75.4%
51.0%
64.8%
*Below market rate
MFI
FFO
ASA-P
BRAC-P
JWS
Sungi
ORIX
Total Assets
350,324
2,810,461
1,238,183
725,716
114,187
360,506
Total Equity
17,024
1,140,198
113,310
236,474
90,243
65,249
288,353
Total Debt
295,902
1,437,120
918,868
467,359
20,001
- Subsidized debt*
148,853
382,187
584,900
-
-
-
- Commercial debt
147,048
1,054,933
333,968
467,359
20,001
288,353
-
-
-
-
-
-
Total Liabilities
Total Deposits
333,299
1,670,627
1,124,873
489,243
23,914
295,257
263,747
2,733,482
1,224,784
509,994
107,700
315,559
4.9%
40.6%
9.2%
32.6%
79.0%
18.1%
49.7%
73.4%
36.3%
100.0%
100.0%
100.0%
4.4
17.4
1.3
8.1
2.0
0.2
-
-
-
-
-
-
-
-
-
-
-
-
Cost of funds
7.6%
5.2%
7.4%
8.8%
9.3%
7.4%
75.3%
97.3%
98.9%
70.3%
94.3%
87.5%
Weighted Avg.
62
Annexures
MFI
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
Total Assets
938,441
107,524
214,795
115,388
274,208
10,295
Total Equity
321,592
23,072
39,750
31,039
61,005
9,452
Total Debt
577,572
81,467
169,016
84,070
171,352
-
- Subsidized debt*
527,921
81,467
164,077
78,115
171,302
-
- Commercial debt
49,651
-
4,939
5,955
50
-
-
-
-
-
-
-
Total Deposits
Total Liabilities
616,849
84,452
175,044
84,349
213,203
620
617,401
74,556
114,414
86,663
163,612
9,713
Weighted Avg.
34.3%
21.5%
18.5%
26.9%
22.2%
91.8%
8.6%
0.0%
2.9%
7.1%
0.0%
0.0%
1.8
3.5
4.3
2.7
2.8
0.0
-
-
-
-
-
-
-
-
-
-
-
-
Cost of funds
10.1%
7.6%
6.8%
6.3%
9.1%
0.0%
65.8%
69.3%
53.3%
75.1%
59.7%
94.3%
DEEP
*Below market rate
MFI
BEDF
OPD
SAATH
SRDO
SVDP
Total Assets
24,429
137,221
83,441
79,728
138,089
1,300
Total Equity
12,048
18,587
20,213
6,260
36,606
(2,336)
Total Debt
10,036
107,608
52,351
67,990
96,653
3,179
- Subsidized debt*
10,036
107,608
33,800
60,104
87,267
3,179
- Commercial debt
-
-
18,551
7,886
9,386
-
-
-
-
-
-
-
Total Liabilities
Total Deposits
12,381
118,634
63,229
73,469
101,483
3,636
16,264
99,648
55,936
60,477
93,443
825
49.3%
13.5%
24.2%
7.9%
26.5%
-179.7%
0.0%
0.0%
35.4%
11.6%
9.7%
0.0%
-1.4
Weighted Avg.
0.8
5.8
2.6
10.9
2.6
-
-
-
-
-
-
-
-
-
-
-
-
Cost of funds
63
*Below market rate
0.0%
8.7%
11.5%
10.0%
8.4%
274.6%
66.6%
72.6%
67.0%
75.9%
67.7%
63.5%
MFI
BAIDARIE
Wasil
VDO
Akhuwat
Sub
20,963,530
Total Assets
120,480
205,538
56,039
4,048,211
Total Equity
20,713
(121,269)
3,352
767,292
4,112,428
Total Debt
96,088
286,423
27,865
3,248,297
15,680,221
- Subsidized debt*
88,129
286,423
19,084
3,248,297
9,999,558
- Commercial debt
7,959
-
8,782
-
5,680,663
-
-
-
-
-
Total Deposits
Total Liabilities
99,767
326,807
52,687
3,280,919
16,851,211
56,105
115,659
29,047
2,465,625
15,315,461
Weighted Avg.
17.2%
-59.0%
6.0%
19.0%
19.6%
8.3%
0.0%
31.5%
0.0%
36.2%
4.6
-2.4
8.3
4.2
3.81
-
-
-
-
-
-
-
-
-
-
Cost of funds
7.0%
8.9%
19.7%
35.4%
7.3%
46.6%
56.3%
51.8%
60.9%
73.1%
*Below market rate
RSP
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
Total Assets
9,777,107
2,522,339
74,496
1,557,256
1,363,123
15,294,320
Total Equity
2,633,849
1,272,129
26,965
387,618
79,409
4,399,970
10,337,864
Total Debt
6,844,633
1,064,064
34,500
1,124,667
1,270,000
- Subsidized debt*
2,091,544
-
34,500
974,667
720,000
3,820,710
- Commercial debt
4,753,089
1,064,064
-
150,000
550,000
6,517,153
-
-
-
-
-
-
Total Liabilities
Total Deposits
7,143,258
1,250,210
47,559
1,169,638
1,283,714
10,894,351
7,653,444
1,149,283
37,519
1,376,726
1,209,504
11,426,476
26.9%
50.4%
36.2%
24.9%
5.8%
28.8%
69.4%
100.0%
0.0%
13.3%
43.3%
63.0%
2.35
2.6
0.8
1.3
2.9
16.0
-
-
-
-
-
-
-
-
-
-
-
-
Cost of funds
*Below market rate
8.3%
9.7%
7.0%
8.5%
7.5%
8.3%
78.3%
45.6%
50.4%
88.4%
88.7%
74.7%
Weighted Avg.
64
Annexures
Sub MFB
Sub MFI
Sub RSP
Total
Total Assets
69,185,285
20,963,530
15,294,320
105,443,135
Total Equity
14,361,522
4,112,428
4,399,970
22,873,920
Total Debt
8,664,284
15,680,221
10,337,864
34,682,369
- Subsidized debt*
2,182,377
9,999,558
3,820,710
16,002,646
- Commercial debt
6,481,907
5,680,663
6,517,153
18,679,724
Total Deposits
42,715,846
-
-
42,715,846
Total Liabilities
54,823,764
16,851,211
10,894,351
82,569,216
36,789,528
15,315,461
11,426,476
63,531,465
Weighted Avg.
20.8%
19.6%
28.8%
21.7%
74.8%
36.2%
63.0%
53.9%
0.6
3.81
2.35
1.52
116.1%
-
-
67.2%
61.7%
-
-
40.5%
6.7%
7.3%
8.3%
7.0%
53.2%
73.1%
74.7%
60.3%
Cost of funds
*Below market rate
65
Outreach
MFB
Active Borrowers
Active Women Borrowers
Gross Loan Portfolio (PKR 000)
Annual Per Capita Income (PKR)*
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
468,638
226,870
6,220
148,776
194,489
75,804
119,925
75,583
1,523
52,212
27,744
3,532
12,238,252
8,981,390
223,832
4,479,999
5,192,071
4,028,415
143,808
143,808
143,808
143,808
143,808
143,808
Number of Loans outstanding
468,638
226,870
6,220
148,776
194,489
76,791
Depositors
900,081
3,481,340
18,301
270,787
327,128
267,913
Number of Deposit Accounts
900,081
3,481,340
18,301
270,787
327,128
267,913
Number of Women Depositors
Deposits Outstanding (PKR 000)
223,286
2,133,294
5,160
73,872
49,281
13,341
8,682,473
12,261,354
22,128
8,749,901
5,159,810
4,656,177
Weighted Avg.
Proportion of active women borrowers (%)
25.6%
33.3%
24.5%
35.1%
14.3%
4.7%
Average loan balance per active
borrower (PKR)
26,115
39,588
35,986
30,112
26,696
53,143
borrower/per capita income
18.2%
27.5%
25.0%
20.9%
18.6%
37.0%
Average outstanding loan balance
(PKR)
26,115
39,588
35,986
30,112
26,696
52,459
/ per capita income
18.2%
27.5%
25.0%
20.9%
18.6%
36.5%
Proportion of active women
depositors (%)
24.8%
61.3%
28.2%
27.3%
15.1%
5.0%
Average saving balance per active
depositor (PKR)
9,646
3,522
1,209
32,313
15,773
17,379
Active deposit account balance
(PKR)
9,646
3,522
1,209
32,313
15,773
17,379
* http://www.sbp.org.pk/reports/stat_reviews/Bulletin/2013/Jun/EconomicGrowth.pdf
Active Borrowers
AMFB
WASEELA
U-Bank
Sub
11,930
11,402
8,786
1,152,915
4,350
1,205
822
286,896
798,673
500,402
346,493
36,789,528
143,808
143,808
143,808
143,808
11,930
11,402
8,786
1,153,902
Depositors
43,532
311,920
54,435
5,675,437
43,532
311,920
54,435
5,675,437
3,278
2,070
-
2,503,582
1,193,507
1,287,919
702,519
42,715,786
Weighted Avg.
36.5%
10.6%
9.4%
24.9%
borrower (PKR)
66,947
43,887
39,437
31,910
* http://www.sbp.org.pk/reports/stat_reviews/
Bulletin/2013/Jun/EconomicGrowth.pdf
Continued on next page
MFB
66
Annexures
MFB
AMFB
WASEELA
U-Bank
Sub
46.6%
30.5%
27.4%
22.2%
(PKR)
66,947
43,887
39,437
31,883
/ per capita income
46.6%
30.5%
27.4%
22.2%
7.5%
0.7%
0.0%
44.1%
depositor (PKR)
27,417
4,129
12,906
7,526
(PKR)
27,417
4,129
12,906
7,526
SAFCO
DAMEN
depositors (%)
* http://www.sbp.org.pk/reports/stat_reviews/
Bulletin/2013/Jun/EconomicGrowth.pdf
MFI
OCT
KASHF
CSC
GBTI
Active Borrowers
47,486
230,810
38,234
38,063
19,753
8,835
13,296
230,810
19,004
38,063
19,607
8,237
460,538
3,752,325
422,532
1,003,160
381,000
81,252
143,808
143,808
143,808
143,808
143,808
143,808
47,486
230,810
38,234
38,063
19,753
8,835
Depositors
Weighted Avg.
67
28.0%
100.0%
49.7%
100.0%
99.3%
93.2%
borrower (PKR)
9,698
16,257
11,051
26,355
19,288
9,197
6.7%
11.3%
7.7%
18.3%
13.4%
6.4%
(PKR)
9,698
16,257
11,051
26,355
19,288
9,197
/ per capita income
6.7%
11.3%
7.7%
18.3%
13.4%
6.4%
depositors (%)
-
-
-
-
-
-
depositor (PKR)
-
-
-
-
-
-
(PKR)
-
-
-
-
-
-
MFI
FFO
ASA-P
BRAC-P
JWS
Sungi
ORIX
Active Borrowers
20,861
220,606
58,389
28,239
11,559
19,140
20,741
218,097
55,385
27,342
11,599
18,095
263,747
2,733,482
1,224,784
509,994
107,700
315,559
143,808
143,808
143,808
143,808
143,808
143,808
20,861
220,606
58,389
28,239
11,599
19,140
Depositors
Weighted Avg.
99.4%
98.9%
94.9%
96.8%
100.3%
94.5%
borrower (PKR)
12,643
12,391
20,976
18,060
9,317
16,487
8.8%
8.6%
14.6%
12.6%
6.5%
11.5%
(PKR)
12,643
12,391
20,976
18,060
9,285
16,487
/ per capita income
8.8%
8.6%
14.6%
12.6%
6.5%
11.5%
depositors (%)
-
-
-
-
-
-
depositor (PKR)
-
-
-
-
-
-
(PKR)
-
-
-
-
-
-
MO
Mojaz
Naymet
Agahe
AMRDO
Active Borrowers
41,023
6,826
14,386
4,833
9,121
2,498
37,289
6,679
7,306
2,583
4,998
1,365
617,401
74,556
114,414
86,663
163,612
9,713
143,808
143,808
143,808
143,808
143,808
143,808
41,023
6,826
14,386
4,833
9,121
2,498
Depositors
Weighted Avg.
90.9%
97.8%
50.8%
53.4%
54.8%
54.6%
borrower (PKR)
15,050
10,922
7,953
17,932
17,938
3,888
10.5%
7.6%
5.5%
12.5%
12.5%
2.7%
MFI
RCDS
68
Annexures
MFI
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
(PKR)
15,050
10,922
7,953
17,932
17,938
3,888
/ per capita income
10.5%
7.6%
5.5%
12.5%
12.5%
2.7%
depositors (%)
-
-
-
-
-
-
depositor (PKR)
-
-
-
-
-
-
(PKR)
-
-
-
-
-
-
Active Borrowers
BEDF
OPD
SAATH
SRDO
SVDP
DEEP
1,480
7,319
4,309
2,452
4,244
450
1,115
4,472
2,642
874
1,527
450
16,264
99,648
55,936
60,477
93,443
825
143,808
143,808
143,808
143,808
143,808
143,808
1,480
7,319
4,309
2,452
4,244
450
Depositors
Weighted Avg.
69
75.3%
61.1%
61.3%
35.6%
36.0%
100.0%
borrower (PKR)
10,989
13,615
12,981
24,664
22,018
1,833
7.6%
9.5%
9.0%
17.2%
15.3%
1.3%
(PKR)
10,989
13,615
12,981
24,664
22,018
1,833
/ per capita income
7.6%
9.5%
9.0%
17.2%
15.3%
1.3%
depositors (%)
-
-
-
-
-
depositor (PKR)
-
-
-
-
-
(PKR)
-
-
-
-
-
MFI
BAIDRE
Wasil
VDO
Akhuwat
Sub
Active Borrowers
3,376
5,482
2,787
235,517
1,088,078
1,484
1,864
1,518
89,497
845,939
56,105
115,659
29,047
2,465,625
15,315,461
MFI
BAIDRE
Wasil
VDO
Akhuwat
Sub
143,808
143,808
143,808
143,808
143,808
3,376
5,482
2,787
235,517
1,088,118
Depositors
-
-
-
Weighted Avg.
44.0%
34.0%
54.5%
38.0%
77.7%
borrower (PKR)
16,619
21,098
10,422
10,469
14,076
11.6%
14.7%
7.2%
7.3%
10%
(PKR)
16,619
21,098
10,422
10,469
14,075
/ per capita income
11.6%
14.7%
7.2%
7.3%
9.8%
depositors (%)
-
-
-
depositor (PKR)
-
-
-
(PKR)
-
-
-
SRSP
TRDP
SRSO
RSP
PRSP
Sub
Active Borrowers
492,338
74,864
4,770
109,688
75,215
756,875
383,814
38,705
4,342
62,383
70,372
559,616
7,653,444
1,149,283
37,519
1,376,726
1,209,504
11,426,476
143,808
143,808
143,808
143,808
143,808
143,808
492,338
74,864
4,770
109,688
75,215
756,875
-
-
-
-
-
-
Depositors
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Weighted Avg.
78.0%
51.7%
91.0%
56.9%
93.6%
73.9%
borrower (PKR)
15,545
15,352
7,866
12,551
16,081
15,097
11%
11%
5%
9%
11%
10%
(PKR)
15,545
15,352
7,866
12,551
16,081
15,097
/ per capita income
10.8%
10.7%
5%
9%
11.2%
10.5%
NRSP
70
Annexures
RSP
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
depositors (%)
-
-
-
-
-
-
depositor (PKR)
-
-
-
-
-
-
(PKR)
-
-
-
-
-
-
Active Borrowers
Sub MFB
Sub MFI
Sub RSP
Total
1,152,915
1,088,078
756,875
2,997,868
286,896
845,939
559,616
1,692,451
36,789,528
15,315,461
11,426,476
63,531,465
143,808
143,808
143,808
143,808
1,153,902
1,088,118
756,875
2,998,895
Depositors
5,675,437
-
-
5,675,437
5,675,437
-
-
5,675,437
2,503,582
-
-
2,503,582
42,715,786
-
-
42,715,786
Weighted Avg.
24.9%
77.7%
73.9%
56.5%
borrower (PKR)
31,910
14,076
15,097
21,192
22.2%
10%
10%
14.7%
(PKR)
31,883
14,075
15,097
21,185
/ per capita income
22.2%
9.8%
10.5%
14.7%
depositors (%)
44.1%
-
-
44.11%
depositor (PKR)
7,526
-
-
7,526
(PKR)
7,526
-
-
7,526
71
Financial Performance in PKR ‘000
MFB
Income from loan portfolio
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
3,483,074
2,934,536
127,903
1,292,267
1,791,295
1,364,494
101,576
124,303
446,494
-
471,001
127,957
Income from other sources
216,810
967,975
5,514
16,621
140,010
16,292
3,824,187
4,349,005
133,418
1,779,889
2,059,262
1,482,362
Total revenue
Less : financial expense
809,557
766,186
250
590,199
793,087
361,258
3,014,629
3,582,819
133,167
1,189,690
1,266,174
1,121,104
157,686
115,582
1,512
109,972
62,231
47,016
2,856,943
3,467,237
131,655
1,079,718
1,203,943
1,074,089
872,220
1,155,631
64,948
479,259
472,418
537,350
Admin expense
1,017,612
1,269,769
64,010
497,463
445,795
505,943
Less: operating expense
1,889,832
2,425,400
128,958
976,722
918,213
1,043,293
24,701
21,348
1,532
2,817
10,032
-
942,410
1,020,489
1,165
100,179
275,698
30,796
Gross financial margin
Personnel expense
Other Non operating expense
Net income before tax
Provision for tax
239,198
311,996
8,437
(9,232)
88,053
(145,350)
Net income/(loss)
703,212
708,493
(7,272)
109,411
187,646
176,146
22,109
-
-
Adjusted Financial Expense on
Borrowings
42,702
Inflation Adjustment Expense
205
142
66
79
99
71
Adjusted Loan Loss Provision
Expense
-
-
-
-
-
-
42,907
142
66
22,189
99
71
660,305
708,351
(7,338)
87,222
187,547
176,075
14,991,045
15,791,681
997,014
10,094,386
10,800,815
5,179,667
3,018,975
2,526,673
944,002
1,169,601
1,758,422
1,184,257
Adjusted return-on-assets
4.4%
4.5%
-0.7%
0.9%
1.7%
3.4%
Adjusted return-on-equity
21.9%
28.0%
-0.8%
7.5%
10.7%
14.9%
Total Adjustment Expense
Net Income/(Loss) After Adjustments
7.7%
8.9%
0.1%
14.8%
15.8%
11.9%
Operational self sufficiency (OSS)
Financial expense ratio
132.7%
130.7%
100.9%
106.0%
115.5%
102.1%
130.8%
130.7%
100.8%
104.6%
115.5%
102.1%
weighted avg.
72
Annexures
MFB
AMFB
WASEELA
U-Bank
Sub
163,101
91,440
64,671
11,312,781
76,317
133,484
95,333
1,576,465
39,483
1,404,855
120,167
2,927,726
15,816,972
Total revenue
278,901
1,629,780
280,170
78,964
30,188
16,533
3,446,223
199,937
1,599,591
263,637
12,370,749
Personnel expense
Admin expense
25,550
1,583
1,358
522,490
174,387
1,598,008
262,279
11,848,259
79,992
271,058
197,901
4,130,777
85,673
303,262
201,014
4,390,540
165,665
574,320
398,915
8,521,318
-
1,172,592
-
1,233,022
8,722
(148,904)
(136,636)
2,093,920
Provision for tax
2,573
(41,850)
(39,671)
414,155
Net income/(loss)
6,148
(107,054)
(96,965)
1,679,765
-
64,811
Borrowings
36
(3)
83
778
Expense
-
-
-
-
36
(3)
83
65,590
6,112
(107,051)
(97,048)
1,614,175
1,536,169
2,227,122
1,606,760
63,224,661
529,825
1,090,188
997,783
13,219,726
weighted avg.
-4.8%
-6.0%
2.6%
12.2%
1.2%
-9.8%
-9.7%
13.8%
8.9%
8.5%
10.6%
103.2%
91.6%
67.2%
115.3%
103.2%
91.6%
67.2%
114.7%
73
0.4%
MFI
OCT
KASHF
SSF
DAMEN
CSC
GBTI
60,661
1,391,408
141,266
325,191
152,759
26,348
11,374
82,582
13,669
39,507
20,179
-
259
181,435
3,650
3,939
2,114
4,206
30,554
Total revenue
72,294
1,655,425
158,584
368,637
175,052
27,301
526,211
33,080
111,873
42,764
2,965
44,993
1,129,213
125,504
256,764
132,288
27,589
7,833
15,514
21,667
24,664
4,475
-
37,160
1,113,700
103,838
232,101
127,813
27,589
Personnel expense
18,270
535,866
57,900
80,472
52,923
8,851
Admin expense
12,458
161,031
42,860
50,561
45,008
3,163
30,728
696,897
100,760
131,033
97,931
12,014
125,486
118,478
-
-
-
1,144
(119,054)
298,324
3,078
101,068
29,882
14,431
-
-
-
-
-
-
(119,054)
298,324
3,078
101,068
29,882
14,431
Provision for tax
Net income/(loss)
Borrowings
2,178
27
3,224
1,143
(17)
5
16
1
7
-
-
-
-
-
2,205
(17)
3,230
16
1,144
7
(121,259)
298,341
(152)
101,052
28,738
14,425
608,230
4,945,872
579,693
1,191,631
673,544
118,629
141,672
257,513
89,683
228,025
47,687
Expense
90,919
-19.9%
6.0%
0.0%
85.6%
115.9%
-0.2%
0.1%
14.4%
7.9%
37.8%
122.0%
102.0%
37.4%
122.0%
FFO
8.5%
4.3%
12.2%
44.3%
60.3%
15.9%
12.8%
12.7%
4.5%
137.8%
120.6%
189.5%
99.9%
137.8%
119.6%
189.4%
ASA-P
BRAC-P
JWS
Sungi
ORIX
56,438
959,387
452,081
145,120
36,689
91,667
-
-
34
23,153
2,466
-
5,883
51,391
358,187
4,799
32
3,227
MFI
Total revenue
62,321
1,010,778
810,302
173,072
39,187
94,894
22,514
74,082
67,551
41,089
1,860
21,332
39,807
936,695
742,751
131,983
37,327
73,562
1,721
22,153
25,733
11,284
453
441
38,086
914,543
717,018
120,700
36,874
73,121
Personnel expense
19,833
224,027
279,789
66,891
6,361
19,891
Admin expense
16,797
94,213
393,717
33,758
10,485
23,437
weighted avg.
74
Annexures
MFI
Provision for tax
Net income/(loss)
FFO
ASA-P
BRAC-P
JWS
Sungi
ORIX
36,631
318,240
673,506
100,649
16,846
43,328
1,349
11,926
7,427
173
-
7,829
106
584,376
36,085
19,878
20,028
21,964
-
192,569
4,702
-
-
-
106
391,808
31,383
19,878
20,028
21,964
3,402
21,210
-
-
2,371
Borrowings
1
0
(26)
16
6
3
Expense
-
-
-
-
-
70
1
3,402
21,185
16
6
2,445
106
388,406
10,199
19,862
20,023
19,519
288,358
2,388,094
1,291,247
628,067
105,011
308,377
16,998
975,253
43,527
226,535
80,229
54,267
weighted avg.
0.0%
16.3%
0.8%
3.2%
19.1%
6.3%
0.6%
39.8%
1.0%
3.2%
-23.4%
8.8%
-25.0%
36.0%
6.4%
9.9%
0.7%
100.2%
7.8%
237.0%
104.7%
113.0%
204.5%
130.1%
100.2%
235.2%
101.9%
113.0%
204.5%
125.9%
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
213,655
21,113
36,464
27,108
41,651
472
22,253
1,278
2,333
-
-
275
MFI
Total revenue
2,024
5,863
4,449
13,083
40,821
32,971
46,100
13,830
58,368
6,168
11,508
5,325
15,616
-
186,055
19,947
29,313
27,647
30,484
13,830
22,001
1,651
4,117
2,073
4,251
224
13,606
3,725
26,116
75
8,515
244,423
164,054
18,296
25,195
25,574
26,234
Personnel expense
59,196
8,126
15,429
6,908
15,529
3,423
Admin expense
40,358
7,226
8,258
8,513
9,534
10,043
99,554
15,352
23,687
15,422
25,062
13,467
-
2,656
-
35
2,944
1,508
7,496
1,171
105
-
-
-
-
60,294
2,944
1,508
7,496
1,171
105
-
-
-
1,516
14
1
3
2
3
1
Expense
-
Provision for tax
Net income/(loss)
Borrowings
4,206
60,294
-
MFI
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
14
1
3
1,518
3
1
60,280
2,943
1,505
5,979
1,168
104
10,501
851,842
95,714
107,487
100,334
249,777
268,445
21,599
19,896
27,291
57,676
9,399
weighted avg.
7.1%
3.1%
1.4%
6.0%
0.5%
1.0%
22.5%
13.6%
7.6%
21.9%
2.0%
1.1%
11.0%
10.4%
12.0%
7.1%
12.9%
0.0%
132.7%
112.7%
103.8%
129.4%
102.6%
100.8%
132.7%
112.7%
103.8%
122.1%
102.6%
100.8%
Total revenue
BEDF
OPD
SAATH
SRDO
SVDP
DEEP
6,966
30,856
16,875
9,844
26,046
10,057
992
2,996
914
406
1,855
-
6,040
2,636
766
5,304
6,070
10,057
13,999
36,488
18,555
15,554
33,970
2,103
9,342
6,036
6,807
8,143
8,731
11,896
27,146
12,519
8,748
25,828
1,326
Personnel expense
341
1,444
1,990
1,326
1,109
-
11,555
25,702
10,529
7,422
24,718
1,326
3,826
10,582
4,348
2,850
12,231
359
Admin expense
3,633
7,490
4,609
3,127
11,149
1,300
7,459
18,071
8,957
5,976
23,380
1,659
4,106
2,054
-
-
3
-
(9)
5,577
1,572
1,446
1,336
(333)
-
2,269
-
-
-
-
(9)
3,308
1,572
1,446
1,336
(333)
188
-
663
-
1
1
3
(185)
Provision for tax
Net income/(loss)
Borrowings
Expense
58
0
-
-
188
1
58
0
666
(185)
(197)
3,307
1,514
1,445
670
(149)
60,132
121,399
72,595
73,285
138,689
1,328
41,132
16,445
14,534
5,630
35,938
(2,170)
weighted avg.
-0.3%
-0.5%
20.1%
10.4%
25.7%
1.9%
6.9%
4.0%
12.2%
15.3%
12.9%
9.7%
1103.8%
99.9%
118.0%
109.3%
110.2%
104.1%
96.8%
98.6%
118.0%
108.9%
110.2%
102.0%
98.5%
2.7%
2.1%
2.0%
0.5%
-11.2%
MFI
76
Annexures
MFI
BAIDRE
Wasil
15,886
43,644
1,333
-
-
17,936
Total revenue
VDO
Akhuwat
Sub
8,391
32,239
4,380,283
1,482
32,778
229,080
2,491
448,255
698,023
17,220
61,580
12,364
513,272
5,307,386
6,747
25,473
5,477
-
1,148,463
10,472
36,107
6,887
513,272
4,158,923
1,246
5,322
(1,008)
15,522
197,547
9,226
30,785
7,895
497,750
3,961,376
Personnel expense
4,470
18,874
2,845
236,547
1,540,071
Admin expense
3,374
13,166
2,440
113,168
1,134,877
7,844
32,040
5,284
349,715
2,674,948
677
-
240
18,792
306,580
705
(1,256)
2,371
129,242
979,849
-
991
-
-
200,530
Provision for tax
Net income/(loss)
705
(2,247)
2,371
129,242
779,319
Borrowings
713
-
-
254,283
290,893
16
(11)
-
43
(12)
Expense
-
-
12,588
-
12,658
729
(11)
12,588
254,326
303,540
(23)
(2,236)
(10,217)
(125,085)
475,779
101,356
180,945
58,789
3,414,924
18,765,849
19,421
(120,146)
2,166
702,671
3,372,239
weighted avg.
-17.4%
-3.7%
2.5%
14.1%
-0.1%
1.9%
-471.7%
-17.8%
23.7%
24.1%
14.0%
0.0%
8.5%
104.3%
98.0%
123.7%
133.7%
122.6%
99.9%
98.0%
54.8%
80.4%
114.6%
-1.2%
77
0.0%
RSP
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
2,070,895
230,464
6,901
327,582
252,585
2,888,425
129,953
71,655
-
23,022
21,371
246,002
19,900
7,616
16,317
24,923
12,912
81,668
2,220,748
309,734
23,218
375,527
286,868
3,216,095
569,281
103,164
2,402
86,526
95,137
856,511
1,651,467
206,570
20,816
289,001
191,731
2,359,584
Total revenue
Personnel expense
20,365
1,349
28
2,852
49,868
74,463
1,631,101
205,221
20,788
286,149
141,862
2,285,121
668,229
35,429
6,183
93,189
83,832
886,861
Admin expense
304,717
20,181
6,974
38,280
55,839
425,991
972,946
55,610
13,157
131,469
139,671
1,312,852
-
3,348
-
1,860
1,430
6,638
658,155
146,263
7,631
152,820
761
965,631
658,155
146,263
7,631
152,820
761
965,631
-
-
-
-
12,132
12,132
157
-
-
20
16
192
Expense
-
-
-
967
-
967
157
-
-
987
12,148
13,291
657,998
146,263
7,631
151,834
(11,386)
952,340
8,551,884
2,678,281
59,970
779,284
1,434,735
13,504,154
2,303,229
1,192,351
27,705
193,936
320,595
Provision for tax
Net income/(loss)
Borrowings
-
4,037,815
7.7%
5.5%
12.7%
19.5%
-0.8%
7.1%
28.6%
12.3%
27.5%
78.3%
-3.6%
23.6%
8.6%
10.1%
6.9%
8.0%
8.3%
8.6%
142.1%
189.5%
149.0%
168.6%
100.3%
142.9%
142.1%
189.5%
149.0%
167.9%
96.2%
142.1%
weighted avg.
78
Annexures
Sub MFB
Sub MFI
Sub RSP
Total
11,312,781
4,380,283
2,888,425
18,581,489
1,576,465
229,080
246,002
2,051,547
2,927,726
698,023
81,668
3,707,417
15,816,972
5,307,386
3,216,095
24,340,453
3,446,223
1,148,463
856,511
5,451,197
12,370,749
4,158,923
2,359,584
18,889,256
Total revenue
522,490
197,547
74,463
794,500
11,848,259
3,961,376
2,285,121
18,094,756
Personnel expense
4,130,777
1,540,071
886,861
6,557,709
Admin expense
4,390,540
1,134,877
425,991
5,951,408
8,521,318
2,674,948
1,312,852
12,509,117
1,233,022
306,580
6,638
1,546,240
2,093,920
979,849
965,631
4,039,399
414,155
200,530
-
614,684
1,679,765
779,319
965,631
3,424,715
64,811
290,893
12,132
367,837
778
(12)
192
959
Expense
-
12,658
967
13,625
65,590
303,540
13,291
382,421
1,614,175
475,779
952,340
3,042,294
63,224,661
18,765,849
13,504,154
95,494,664
13,219,726
3,372,239
4,037,815
Provision for tax
Net income/(loss)
Borrowings
20,629,780
weighted avg.
79
2.6%
2.5%
7.1%
3.2%
12.2%
14.1%
23.6%
14.7%
10.6%
8.5%
8.6%
9.7%
115.3%
122.6%
142.9%
119.9%
114.7%
114.6%
142.1%
117.7%
Operating Income in PKR ‘000
MFB
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
Revenue from loan portfolio
3,483,074
2,934,536
127,903
1,292,267
1,791,295
1,364,494
Total revenue
3,824,187
4,349,005
133,418
1,779,889
2,059,262
1,482,362
660,305
708,351
(7,338)
87,222
187,547
176,075
Adjusted net operating income /
(loss)
14,991,045
15,791,681
997,014
10,094,386
10,800,815
5,179,667
Gross loan portfolio (opening
balance)
8,859,405
8,331,554
117,931
3,499,317
4,845,000
2,036,069
Gross loan portfolio (closing
balance)
12,238,252
8,981,390
223,832
4,479,999
5,192,071
4,028,415
Average gross loan portfolio
10,548,829
8,656,472
170,882
3,989,658
5,018,536
3,032,242
8%
8%
8%
8%
8%
Inflation rate *
8%
weighted avg.
Total revenue ratio (total revenue-to-average total assets)
25.5%
27.5%
13.4%
17.6%
19.1%
28.6%
Adjusted profit margin (adjusted
profit/(loss)-to-total revenue)
17.3%
16.3%
-5.5%
4.9%
9.1%
11.9%
Yield on gross portfolio (nominal)
33.0%
33.9%
74.8%
32.4%
35.7%
45.0%
Yield on gross portfolio (real)
22.9%
23.8%
61.6%
22.4%
25.4%
34.0%
* http://www.sbp.org.pk/reports/stat_reviews/Bulletin/2013/May/IND.pdf
WASEELA
U-Bank
Sub
163,101
91,440
64,671
11,312,781
Total revenue
278,901
1,629,780
280,170
15,816,972
6,112
(107,051)
(97,048)
1,614,175
(loss)
1,536,169
2,227,122
1,606,760
63,224,661
balance)
341,838
178,328
41,381
28,250,823
balance)
798,673
500,402
346,493
36,789,528
570,256
339,365
193,937
32,520,176
8%
8%
8%
Inflation rate *
8%
weighted avg.
18.2%
73.2%
17.4%
25.0%
2.2%
-6.6%
-34.6%
10.2%
28.6%
26.9%
33.3%
34.8%
18.9%
17.5%
23.2%
24.6%
MFB
AMFB
80
Annexures
MFI
OPP
KASHF
SAFCO
DAMEN
CSC
GBTI
60,661
1,391,408
141,266
325,191
152,759
26,348
Total revenue
72,294
1,655,425
158,584
368,637
175,052
30,554
(121,259)
298,341
(152)
101,052
28,738
14,425
(loss)
608,230
4,945,872
579,693
1,191,631
673,544
118,629
balance)
470,392
3,543,155
413,875
750,530
293,493
50,763
balance)
460,538
3,752,325
422,532
1,003,160
381,000
81,252
465,465
3,647,740
418,203
876,845
337,247
66,007
8%
8%
8%
8%
8%
8%
Inflation rate *
weighted avg.
11.9%
33.5%
27.4%
30.9%
26.0%
25.8%
-167.7%
18.0%
-0.1%
27.4%
16.4%
47.2%
13.0%
38.1%
33.8%
37.1%
45.3%
39.9%
4.5%
27.7%
23.6%
26.7%
34.3%
29.3%
BRAC-P
JWS
Sungi
ORIX
MFI
FFO
ASA-P
56,438
959,387
452,081
145,120
36,689
91,667
Total revenue
62,321
1,010,778
810,302
173,072
39,187
94,894
106
388,406
10,199
19,862
20,023
19,519
(loss)
288,358
2,388,094
1,291,247
628,067
105,011
308,377
balance)
125,333
1,896,801
884,295
319,169
89,582
233,715
balance)
263,747
2,733,482
1,224,784
509,994
107,700
315,559
194,540
2,315,142
1,054,540
414,581
98,641
274,637
8%
8%
8%
8%
8%
Inflation rate *
8%
weighted avg.
81
21.6%
42.3%
62.8%
27.6%
37.3%
30.8%
0.2%
38.4%
1.3%
11.5%
51.1%
8.4%
29.0%
41.4%
42.9%
35.0%
37.2%
33.4%
19.2%
30.7%
32.0%
24.8%
26.8%
23.3%
MFI
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
213,655
21,113
36,464
27,108
41,651
472
Total revenue
244,423
26,116
40,821
32,971
46,100
13,830
60,280
2,943
1,505
5,979
1,168
104
(loss)
851,842
95,714
107,487
100,334
249,777
10,501
balance)
444,610
43,725
78,150
64,083
78,601
9,511
balance)
617,401
74,556
114,414
86,663
163,612
9,713
531,006
59,141
96,282
75,373
121,106
9,612
8%
8%
8%
8%
8%
8%
Inflation rate *
weighted avg.
28.7%
27.3%
38.0%
32.9%
18.5%
131.7%
13.6%
6.7%
1.9%
9.3%
1.5%
1.1%
40.2%
35.7%
37.9%
36.0%
34.4%
4.9%
29.6%
25.4%
27.4%
25.7%
24.2%
-3.0%
SAATH
SRDO
SVDP
DEEP
MFI
BEDF
Total revenue
(loss)
OPD
6,966
30,856
16,875
9,844
26,046
10,057
13,999
36,488
18,555
15,554
33,970
10,057
(197)
3,307
1,514
1,445
670
(149)
60,132
121,399
72,595
73,285
138,689
1,328
balance)
89,582
53,404
22,907
45,092
74,448
757
balance)
16,264
99,648
55,936
60,477
93,443
825
52,923
76,526
39,421
52,785
83,946
791
8%
8%
8%
8%
8%
Inflation rate *
8%
23.3%
30.1%
25.6%
21.2%
24.5%
757.2%
-0.2%
6.2%
6.6%
3.2%
0.9%
-19.6%
13.2%
40.3%
42.8%
18.6%
31.0%
1271.4%
4.8%
29.7%
32.0%
9.7%
21.1%
1167.5%
weighted avg.
82
Annexures
MFI
BAIDRE
Wasil
VDO
Akhuwat
Sub
15,886
43,644
8,391
32,239
4,380,283
Total revenue
17,220
61,580
12,364
513,272
5,788,419
(23)
(2,236)
(10,217)
(125,085)
720,264
101,356
180,945
58,789
3,414,924
18,765,849
825
96,080
49,194
1,562,109
11,784,181
balance)
56,105
115,659
29,047
2,465,625
15,315,461
28,465
105,869
39,120
2,013,867
13,549,821
8%
8%
8%
(loss)
balance)
Inflation rate *
8%
weighted avg.
17.0%
34.0%
21.0%
15.0%
30.8%
-2.8%
-2.3%
-20.8%
-8.0%
12.4%
55.8%
41.2%
21.4%
1.6%
32.3%
44.3%
30.8%
12.2%
1.6%
22.3%
SRSP
TRDP
SRSO
RSP
NRSP
PRSP
Sub
2,070,895
230,464
6,901
327,582
252,585
2,888,425
Total revenue
2,220,748
309,734
23,218
375,527
286,868
3,216,095
657,998
146,263
7,631
151,834
(11,386)
952,340
(loss)
8,551,884
2,678,281
59,970
779,284
1,434,735
13,504,154
balance)
5,584,405
903,664
32,174
789,789
1,077,973
8,388,005
balance)
7,653,444
1,149,283
37,519
1,376,726
1,209,504
11,426,476
6,618,924
1,026,474
34,846
1,083,258
1,143,738
9,907,240
8%
8%
8%
8%
8%
Inflation rate *
8%
weighted avg.
83
26.0%
11.6%
38.7%
48.2%
20.0%
23.8%
29.6%
47.2%
32.9%
40.4%
-4.0%
29.6%
31.3%
22.5%
19.8%
30.2%
22.1%
29.2%
21.3%
13.2%
10.7%
20.4%
12.8%
19.4%
Sub MFB
Sub MFI
Sub RSP
Total
11,312,781
4,380,283
2,888,425
18,581,489
Total revenue
15,816,972
5,788,419
3,216,095
24,821,486
1,614,175
720,264
952,340
3,286,779
63,224,661
18,765,849
13,504,154
95,494,664
balance)
28,250,823
11,784,181
8,388,005
48,423,008
balance)
36,789,528
15,315,461
11,426,476
63,531,465
32,520,176
13,549,821
9,907,240
55,977,237
8%
8%
8%
8%
(loss)
Inflation rate *
weighted avg.
25.0%
30.8%
23.8%
26.0%
10.2%
12.4%
29.6%
13.2%
34.8%
32.3%
29.2%
34.6%
24.6%
22.3%
19.4%
24.4%
84
Annexures
Operating Expense
MFB
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
2,881,777
3,328,516
132,253
1,679,710
1,783,563
1,451,566
Adjusted financial expense
809,557
766,186
250
590,199
793,087
361,258
Adjusted loan loss provision
expense
157,686
115,582
1,512
109,972
62,231
47,016
1,043,293
Adjusted total expense
1,914,533
2,446,748
130,490
979,539
928,245
Adjustment expense
Operating expense
42,907
142
66
22,189
99
71,289
14,991,045
15,791,681
997,014
10,094,386
10,800,815
5,179,667
Weighted avg.
Adjusted total expense-to-average
total assets
19.2%
21.1%
13.3%
16.6%
16.5%
28.0%
Adjusted financial expense-to-average total assets
5.4%
4.9%
0.0%
5.8%
7.3%
7.0%
Adjusted loan loss provision expense-to-average total assets
1.1%
0.7%
0.2%
1.1%
0.6%
0.9%
12.8%
15.5%
13.1%
9.7%
8.6%
20.1%
Adjusted personnel expense
5.8%
7.3%
6.5%
4.7%
4.4%
10.4%
Adjusted admin expense
6.8%
8.0%
6.4%
4.9%
4.1%
9.8%
Adjustment expense-to-average
total assets
0.3%
0.0%
0.0%
0.2%
0.0%
1.4%
Adjusted operating expense-to-average total assets
MFB
AMFB
WASEELA
U-Bank
Sub
270,179
1,778,683
416,806
13,723,052
78,964
30,188
16,533
3,446,223
expense
25,550
1,583
1,358
522,490
165,665
1,746,912
398,915
9,754,340
Operating expense
Adjustment expense
36
(3)
83
136,808
1,536,169
2,227,122
1,606,760
63,224,661
Weighted avg.
85
total assets
17.6%
79.9%
25.9%
21.7%
5.1%
1.4%
1.0%
5.5%
1.7%
0.1%
0.1%
0.8%
10.8%
78.4%
24.8%
15.4%
5.2%
12.2%
12.3%
6.5%
5.6%
13.6%
12.5%
6.9%
total assets
0.0%
0.0%
0.0%
0.2%
MFI
OPP
KASHF
SAFCO
DAMEN
CSC
GBTI
193,526
1,357,101
158,731
267,570
146,313
16,122
29,479
526,211
36,304
111,873
43,907
2,965
expense
7,833
15,514
21,667
24,664
4,475
13,158
156,214
815,376
100,760
131,033
97,931
Adjustment expense
Operating expense
2,205
(17)
3,230
16
1,144
7
608,230
4,945,872
579,693
1,191,631
673,544
118,629
Weighted avg.
total assets
31.8%
27.4%
27.4%
22.5%
21.7%
13.6%
4.8%
10.6%
6.3%
9.4%
6.5%
2.5%
1.3%
0.3%
3.7%
2.1%
0.7%
0.0%
25.7%
16.5%
17.4%
11.0%
14.5%
11.1%
3.0%
10.8%
10.0%
6.8%
7.9%
7.5%
2.0%
3.3%
7.4%
4.2%
6.7%
2.7%
total assets
0.4%
0.0%
0.6%
0.0%
0.2%
0.0%
FFO
ASA-P
BRAC-P
JWS
Sungi
ORIX
MFI
62,214
429,803
795,428
153,194
19,159
75,372
22,514
77,484
88,762
41,089
1,860
23,703
expense
1,721
22,153
25,733
11,284
453
512
51,157
37,979
330,166
680,933
100,822
16,846
Adjustment expense
Operating expense
1
3,402
21,185
16
6
2,445
288,358
2,388,094
1,291,247
628,067
105,011
308,377
total assets
21.6%
18.0%
61.6%
24.4%
18.2%
24.4%
7.8%
3.2%
6.9%
6.5%
1.8%
7.7%
0.6%
0.9%
2.0%
1.8%
0.4%
0.2%
13.2%
13.8%
52.7%
16.1%
16%
16.6%
6.9%
9.4%
21.7%
10.7%
6.1%
6.5%
5.8%
3.9%
30.5%
5.4%
10.0%
7.6%
total assets
0.0%
0.1%
1.6%
0.0%
0.0%
0.8%
Weighted avg.
86
Annexures
MFI
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
184,129
23,171
39,313
26,991
44,928
13,726
58,368
6,168
11,508
6,841
15,616
-
expense
22,001
1,651
4,117
2,073
4,251
224
13,501
103,760
15,352
23,687
18,077
25,062
Adjustment expense
Operating expense
14
1
3
1,518
3
1
851,842
95,714
107,487
100,334
249,777
10,501
Weighted avg.
total assets
21.6%
24.2%
36.6%
26.9%
18.0%
130.7%
6.9%
6.4%
10.7%
6.8%
6.3%
0.0%
2.6%
1.7%
3.8%
2.1%
1.7%
2.1%
12.2%
16.0%
22.0%
18.0%
10.0%
128.6%
6.9%
8.5%
14.4%
6.9%
6.2%
32.6%
4.7%
7.5%
7.7%
8.5%
3.8%
95.6%
total assets
0.0%
0.0%
0.0%
1.5%
0.0%
0.0%
BEDF
OPD
SAATH
SRDO
SVDP
DEEP
14,195
30,911
16,983
14,109
33,298
10,390
2,291
9,342
6,036
6,807
8,806
8,731
341
1,444
1,990
1,326
1,109
1,659
MFI
expense
11,564
20,126
8,957
5,976
23,383
Adjustment expense
Operating expense
188
1
58
0
666
(185)
60,132
121,399
72,595
73,285
138,689
1,328
Weighted avg.
87
total assets
23.6%
25.5%
23.4%
19.3%
24.0%
782.3%
3.8%
7.7%
8.3%
9.3%
6.3%
657.4%
0.6%
1.2%
2.7%
1.8%
0.8%
0.0%
19.2%
16.6%
12.3%
8.2%
16.9%
124.9%
6.4%
8.7%
6.0%
3.9%
8.8%
27.0%
6.0%
6.2%
6.3%
4.3%
8.0%
97.9%
total assets
0.3%
0.0%
0.1%
0.0%
0.5%
-13.9%
MFI
BAIDRE
Wasil
VDO
Akhuwat
Sub
17,227
62,835
22,581
638,314
4,867,637
7,460
25,473
5,477
254,283
1,439,357
expense
1,246
5,322
11,580
15,522
210,205
Operating expense
3,218,075
8,521
32,040
5,525
368,508
Adjustment expense
729
(11)
12,588
254,326
303,540
101,356
180,945
58,789
3,414,924
18,765,849
Weighted avg.
total assets
17.0%
34.7%
38.4%
18.7%
25.9%
7.4%
14.1%
9.3%
7.4%
7.7%
1.2%
2.9%
19.7%
0.5%
1.1%
8.4%
17.7%
9.4%
10.8%
17.1%
4.4%
10.4%
4.8%
6.9%
8.2%
3.3%
7.3%
4.1%
3.3%
6.0%
total assets
0.7%
0.0%
21.4%
7.4%
1.6%
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
RSP
1,562,593
163,471
15,587
223,674
286,107
2,251,431
569,281
103,164
2,402
86,526
95,137
856,511
expense
20,365
1,349
28
3,819
49,868
75,430
1,319,490
972,946
58,958
13,157
133,329
141,101
Adjustment expense
Operating expense
157
-
-
987
12,148
13,291
8,551,884
2,678,281
59,970
779,284
1,434,735
13,504,154
total assets
18.3%
6.1%
26.0%
28.7%
19.9%
16.7%
6.7%
3.9%
4.0%
11.1%
6.6%
6.3%
0.2%
0.1%
0.0%
0.5%
3.5%
0.6%
11.4%
2.2%
21.9%
17.1%
9.8%
9.8%
7.8%
1.3%
10.3%
12.0%
5.8%
6.6%
3.6%
0.8%
11.6%
4.9%
3.9%
3.2%
total assets
0.0%
0.0%
0.0%
0.1%
0.8%
0.1%
Weighted avg.
88
Annexures
expense
Operating expense
Sub MFB
Sub MFI
Sub RSP
Total
13,723,052
4,867,637
2,251,431
20,842,120
3,446,223
1,439,357
856,511
5,742,091
522,490
210,205
75,430
808,125
9,754,340
3,218,075
1,319,490
14,291,904
Adjustment expense
136,808
303,540
13,291
453,639
63,224,661
18,765,849
13,504,154
95,494,664
Weighted avg.
total assets
21.7%
25.9%
16.7%
21.8%
5.5%
7.7%
6.3%
6.0%
0.8%
1.1%
0.6%
0.8%
15.4%
17.1%
9.8%
15.0%
6.5%
8.2%
6.6%
6.9%
6.9%
6.0%
3.2%
6.2%
total assets
0.2%
1.6%
0.1%
0.5%
89
Operating Efficiency
MFB
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
Operating expense (PKR 000)
1,889,832
2,425,400
128,958
976,722
918,213
1,043,293
Personnel expense (PKR 000)
872,220
1,155,631
64,948
479,259
472,418
537,350
10,548,829
8,656,472
170,882
3,989,658
5,018,536
3,032,242
Average number of active borrowers
468,638
226,870
6,220
148,776
194,489
75,804
Average number of active loans
468,638
226,870
6,220
148,776
194,489
76,791
17.92%
28.0%
75.5%
24.5%
18.3%
34.4%
8.27%
13.3%
38.0%
12.0%
9.4%
17.7%
2.3
3.9
2.2
2.9
2.3
2.9
Average gross loan portfolio (PKR
000)
Adjusted operating expense-to-average gross loan portfolio
Adjusted personnel expense-to-average gross loan
portfolio
Average salary/gross domestic
product per capita
Adjusted cost per borrower (PKR)
4,033
10,691
20,733
6,565
4,721
13,763
Adjusted cost per loan (PKR)
4,033
10,691
20,733
6,565
4,721
13,586
AMFB
WASEELA
U-Bank
Sub
165,665
574,320
398,915
8,521,318
79,992
271,058
197,901
4,130,777
570,256
339,365
193,937
32,520,176
11,930
11,402
8,786
1,152,915
11,930
11,402
8,786
MFB
000)
1,153,902
29.1%
169.2%
205.7%
26.2%
portfolio
14.0%
79.9%
102.0%
12.7%
2.1
4.6
4.1
2.9
13,886
50,370
45,403
7,391
13,886
50,370
45,403
7,385
product per capita
weighted avg.
90
Annexures
MFI
OPP
KASHF
SAFCO
DAMEN
CSC
GBTI
30,728
696,897
100,760
131,033
97,931
12,014
18,270
535,866
57,900
80,472
52,923
8,851
465,465
3,647,740
418,203
876,845
337,247
66,007
47,486
230,810
38,234
38,063
19,753
8,835
47,486
230,810
38,234
38,063
19,753
8,835
000)
weighted avg.
6.6%
19.1%
24.1%
14.9%
29.0%
18.2%
portfolio
3.9%
14.7%
13.8%
9.2%
15.7%
13.4%
product per capita
1.3
1.8
1.6
2.5
2.0
0.9
647
3,019
2,635
3,443
4,958
1,360
647
3,019
2,635
3,443
4,958
1,360
FFO
ASA-P
BRAC-P
JWS
Sungi
ORIX
MFI
36,631
318,240
673,506
100,649
16,846
43,328
19,833
224,027
279,789
66,891
6,361
19,891
194,540
2,315,142
1,054,540
414,581
98,641
274,637
20,861
220,606
58,389
28,239
11,559
19,140
20,861
220,606
58,389
28,239
11,599
000)
19,140
weighted avg.
18.8%
13.7%
63.9%
24.3%
17.1%
15.8%
portfolio
10.2%
9.7%
26.5%
16.1%
6.4%
7.2%
0.8
1.5
3.2
2.4
0.8
2.0
product per capita
1,756
1,443
11,535
3,564
1,457
2,264
1,756
1,443
11,535
3,564
1,452
2,264
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
99,554
15,352
23,687
15,422
25,062
13,467
59,196
8,126
15,429
6,908
15,529
3,423
531,006
59,141
96,282
75,373
121,106
9,612
41,023
6,826
14,386
4,833
9,121
2,498
41,023
6,826
14,386
4,833
9,121
2,498
MFI
000)
91
MFI
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
weighted avg.
18.7%
26.0%
24.6%
20.5%
20.7%
140.1%
portfolio
11.1%
13.7%
16.0%
9.2%
12.8%
35.6%
1.4
1.2
0.9
1.8
0.7
1.7
product per capita
2,427
2,249
1,647
3,191
2,748
5,391
2,427
2,249
1,647
3,191
2,748
5,391
MFI
BEDF
OPD
SAATH
SRDO
SVDP
DEEP
7,459
18,071
8,957
5,976
23,380
1,659
3,826
10,582
4,348
2,850
12,231
359
52,923
76,526
39,421
52,785
83,946
791
1,480
7,319
4,309
2,452
4,244
450
1,480
7,319
4,309
2,452
4,244
450
000)
weighted avg.
14.1%
23.6%
22.7%
11.3%
27.9%
209.8%
7.2%
13.8%
11.0%
5.4%
14.6%
45.4%
1.9
1.2
1.2
0.9
1.8
0.2
5,040
2,469
2,079
2,437
5,509
3,687
5,040
2,469
2,079
2,437
5,509
3,687
Wasil
VDO
Akhuwat
Sub
portfolio
product per capita
7,844
32,040
5,284
349,715
2,911,495
4,470
18,874
2,845
236,547
1,776,618
28,465
105,869
39,120
2,013,867
13,549,821
3,376
5,482
2,787
235,517
1,088,078
3,376
5,482
2,787
235,517
000)
1,088,118
weighted avg.
27.6%
30.3%
13.5%
17.4%
21.5%
portfolio
15.7%
17.8%
7.3%
11.7%
13.1%
0.6
1.6
1.2
1.1
1.6
product per capita
MFI
BAIDRE
92
Annexures
MFI
BAIDRE
Wasil
VDO
Akhuwat
Sub
2,323
5,845
1,896
1,485
2,676
2,323
5,845
1,896
1,485
2,676
RSP
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
972,946
55,610
13,157
131,469
139,671
1,312,852
668,229
35,429
6,183
93,189
83,832
886,861
6,618,924
1,026,474
34,846
1,083,258
1,143,738
9,907,240
492,338
74,864
4,770
109,688
75,215
756,875
492,338
74,864
4,770
109,688
75,215
756,875
000)
weighted avg.
14.7%
5.4%
37.8%
12.1%
12.2%
13.3%
portfolio
10.1%
3.5%
17.7%
8.6%
7.3%
9.0%
1.8
0.4
1.7
1.1
1.7
1.5
1,976
743
2,758
1,199
1,857
1,735
1,976
743
2,758
1,199
1,857
1,735
Sub MFB
Sub MFI
Sub RSP
Total
8,521,318
2,911,495
1,312,852
12,745,665
4,130,777
1,776,618
886,861
6,794,257
32,520,176
13,549,821
9,907,240
55,977,237
1,152,915
1,088,078
756,875
2,997,868
1,153,902
1,088,118
756,875
2,998,895
product per capita
000)
weighted avg.
93
26.2%
21.5%
13.3%
22.8%
portfolio
12.7%
13.1%
9.0%
12.1%
2.9
1.6
1.5
2.2
7,391
2,676
1,735
4,252
7,385
2,676
1,735
4,250
product per capita
Productivity
MFB
Number of active borrowers
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
468,638
226,870
6,220
148,776
194,489
75,804
Number of active loans
468,638
226,870
6,220
148,776
194,489
76,791
Number of active depositors
900,081
3,481,340
18,301
270,787
327,128
267,913
Number of deposit accounts
900,081
3,481,340
18,301
270,787
327,128
267,913
2,622
2,058
206
1,169
1,429
1,268
480
982
92
535
743
Total staff
Total loan officers
434
weighted avg.
Borrowers per staff
179
110
30
127
136
60
Loans per staff
179
110
30
127
136
61
Borrowers per loan officer
976
231
68
279
262
175
Loans per loan officer
976
231
68
279
262
177
Depositors per staff
343
1,692
89
232
229
211
Deposit accounts per staff
343
1,692
89
232
229
211
18.3%
47.7%
44.7%
45.8%
52.0%
34.2%
AMFB
WASEELA
U-Bank
Sub
11,930
11,402
8,786
1,152,915
11,930
11,402
8,786
1,044,993
43,532
311,920
54,435
5,675,437
43,532
311,920
54,435
5,675,437
271
475
338
7,484
Total loan officers
62
74
31
2,832
Borrowers per staff
44
24
26
140
Loans per staff
44
24
26
140
192
154
283
369
192
154
283
369
161
657
161
758
161
657
161
758
22.9%
15.6%
9.2%
37.8%
Personnel allocation ratio
MFB
Total staff
weighted avg.
94
Annexures
MFI
OPP
KASHF
SAFCO
DAMEN
CSC
GBTI
47,486
230,810
38,234
38,063
19,753
8,835
47,486
230,810
38,234
38,063
19,753
8,835
-
-
-
-
-
-
-
-
-
-
-
-
100
2,064
245
228
180
67
26
935
123
103
55
6
Borrowers per staff
475
112
156
167
110
132
Loans per staff
475
112
156
167
110
132
Total staff
Total loan officers
weighted avg.
1,826
247
311
370
359
1,473
1,826
247
311
370
359
1,473
0
0
0
0
0
0
0
0
0
0
0
0
26.0%
45.3%
50.2%
45.2%
30.6%
9.0%
AKHUWAT
MFI
FFO
ASA-P
BRAC
JWS
SUNGI
20,861
220,606
58,389
28,239
11,559
235,517
20,861
220,606
58,389
28,239
11,599
235,517
-
-
-
-
-
-
-
-
-
-
-
-
176
1,044
610
197
54
1,549
40
634
329
96
41
1,015
Borrowers per staff
119
211
96
143
214
152
Loans per staff
119
211
96
143
215
152
Total staff
Total loan officers
weighted avg.
522
348
177
294
282
232
522
348
177
294
283
232
0
0
0
0
0
0
0
0
0
0
0
0
22.7%
60.7%
53.9%
48.7%
75.9%
65.5%
Mojaz
MFI
ORIX
RCDS
Agahe
AMRDO
MO
19,140
41,023
6,826
14,386
4,833
9,121
19,140
41,023
6,826
14,386
4,833
9,121
-
-
-
-
-
-
-
-
-
-
-
-
Total staff
70
297
46
119
26
158
Total loan officers
41
140
27
32
12
15
weighted avg.
Borrowers per staff
273
138
148
121
186
58
95
MFI
ORIX
RCDS
Agahe
AMRDO
MO
Mojaz
Loans per staff
273
138
148
121
186
58
467
293
253
450
403
608
608
467
293
253
450
403
0
0
0
0
0
0
0
0
0
0
0
0
58.6%
47.1%
58.7%
26.9%
46.2%
9.5%
Naymet
BEDF
OPD
SAATH
SRDO
SVDP
2,498
1,480
7,319
4,309
2,452
4,244
4,244
MFI
2,498
1,480
7,319
4,309
2,452
-
-
-
-
-
-
-
-
-
-
-
-
14
14
59
25
21
47
4
6
17
10
6
15
Total staff
Total loan officers
weighted avg.
Borrowers per staff
178
106
124
172
117
90
Loans per staff
178
106
124
172
117
90
625
247
431
431
409
283
283
625
247
431
431
409
0
0
0
0
0
0
0
0
0
0
0
0
28.6%
42.9%
28.8%
40.0%
28.6%
31.9%
BAIDRE
Wasil
VDO
Sub
450
3,376
5,482
2,787
1,088,078
450
3,376
5,482
2,787
1,099,717
-
-
-
-
-
Total staff
Total loan officers
-
-
-
-
-
15
56
82
16
7,633
3
14
44
8
3,834
weighted avg.
Borrowers per staff
30
60
67
174
144
Loans per staff
30
60
67
174
144
150
241
125
348
287
287
150
241
125
348
0
0
0
0
-
0
0
0
0
-
20.0%
25.0%
53.7%
50.0%
50.2%
MFI
DEEP
96
Annexures
RSP
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
492,338
74,864
4,770
109,688
75,215
756,875
492,338
74,864
4,770
109,688
75,215
756,875
-
-
-
-
-
-
-
-
-
-
-
-
Total staff
2,572
643
26
589
334
4,164
Total loan officers
1,842
64
6
230
30
2,172
Borrowers per staff
191
116
183
186
225
182
Loans per staff
191
116
183
186
225
182
weighted avg.
267
1,170
795
477
2,507
348
267
1,170
795
477
2,507
348
-
-
-
-
-
-
-
-
-
-
-
-
71.6%
10.0%
23.1%
39.0%
9.0%
52.2%
Sub MFB
Sub MFI
Sub RSP
Total
1,044,993
1,099,637
756,875
2,997,868
1,044,993
1,099,717
756,875
2,901,585
5,675,437
-
-
5,675,437
5,675,437
-
-
5,675,437
Total staff
7,484
7,633
4,164
19,281
Total loan officers
2,832
3,834
2,172
8,838
weighted avg.
Borrowers per staff
140
144
182
150
Loans per staff
140
144
182
150
369
287
348
328
369
287
348
328
758
-
-
294
97
758
-
-
294
37.8%
50.2%
52.2%
45.8%
Risk in PKR ‘000
MFB
Portfolio at risk > 30 days
KBL
TMFB
POMFB
FMFB
NRSP-B
FINCA
112,973
74,381
2,275
37,104
51,109
35,550
35,170
25,176
1,197
21,490
27,490
14,147
Loan loss reserve
132,413
39,631
2,855
63,308
66,894
33,747
Loan Portfolio written off during
year
127,783
11,429
52,160
128,046
49,981
30,091
12,238,252
8,981,390
223,832
4,479,999
5,192,071
4,028,415
10,548,829
8,656,472
170,882
3,989,658
5,018,536
3,032,242
weighted avg.
Portfolio at risk (>30)-to-gross loan
portfolio
0.9%
0.8%
1.0%
0.8%
1.0%
0.9%
Portfolio at risk(>90)-to-gross loan
portfolio
0.3%
0.3%
0.5%
0.5%
0.5%
0.4%
Write off-to-average gross loan
portfolio
1.2%
0.13%
30.5%
3.2%
1.0%
1.0%
117.2%
53.3%
125.5%
170.6%
130.9%
94.9%
AMFB
WASEELA
U-Bank
Sub
101,396
7
267
415,062
39,561
-
20
164,251
Loan loss reserve
32,535
2,590
2,366
376,338
year
15,836
-
22
415,348
798,673
500,402
346,493
36,789,528
570,256
339,365
193,937
Risk coverage ratio (adjusted loan
loss reserve-to-portfolio at risk
>30days)
MFB
32,520,176
portfolio
12.7%
0.0%
0.1%
1.1%
portfolio
5.0%
0.0%
0.0%
0.4%
portfolio
2.8%
0.0%
0.0%
1.3%
32.1%
36160.9%
884.8%
90.7%
>30days)
weighted avg.
98
Annexures
MFI
OPP
KASHF
SAFCO
DAMEN
CSC
GBTI
7,833
20,878
12,998
7,920
2,333
-
7,833
17,708
12,244
4,378
2,333
-
13,248
73,991
21,127
50,158
19,060
-
-
601,390
12,419
12,032
316
-
Loan loss reserve
year
460,538
3,752,325
422,532
1,003,160
381,000
81,252
465,465
3,647,740
418,203
876,845
337,247
66,007
weighted avg.
portfolio
1.7%
0.6%
3.1%
0.8%
0.6%
0.0%
portfolio
1.7%
0.5%
2.9%
0.4%
0.6%
0.0%
portfolio
0.0%
16.5%
3.0%
1.4%
0.1%
0.0%
169.1%
354.4%
162.5%
633.3%
816.8%
0.0%
FFO
ASA-P
BRAC-P
JWS
Sungi
ORIX
>30days)
MFI
216
4,985
26,859
2,637
-
4,422
216
3,838
21,418
2,637
-
4,342
8,005
29,812
225,884
26,695
1,615
4,162
799
7,579
-
899
182
11,886
Loan loss reserve
year
263,747
2,733,482
1,224,784
509,994
107,700
315,559
194,540
2,315,142
1,054,540
414,581
98,641
274,637
weighted avg.
portfolio
0.1%
0.2%
2.2%
0.5%
0.0%
1.4%
portfolio
0.1%
0.1%
1.7%
0.5%
0.0%
1.4%
portfolio
0.4%
0.3%
0.0%
0.2%
0.2%
4.3%
3710.9%
598.1%
841.0%
1012.5%
100.0%
94.1%
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
1,017
-
5,494
1,292
27
-
>30days)
MFI
Loan loss reserve
year
924
-
4,256
903
7
-
30,852
-
5,679
5,277
8,181
224
3,802
-
1,880
-
-
-
617,401
74,556
114,414
86,663
163,612
9,713
531,006
59,141
96,282
75,373
121,106
9,612
99
MFI
RCDS
Agahe
AMRDO
MO
Mojaz
Naymet
weighted avg.
portfolio
0.2%
0.0%
4.8%
1.5%
0.0%
0.0%
portfolio
0.1%
0.0%
3.7%
1.0%
0.0%
0.0%
portfolio
0.7%
0.0%
2.0%
0.0%
0.0%
0.0%
3033.1%
0.0%
103.4%
100%
100.0%
100.0%
BEDF
OPD
SAATH
SRDO
SVDP
DEEP
>30days)
MFI
146
1,025
1,096
1,885
1,570
137
427
943
858
744
1,216
137
Loan loss reserve
488
2,346
2,797
3,024
4,672
824
year
512
1,263
339
608
-
-
16,264
99,648
55,936
60,477
93,443
825
52,923
76,526
39,421
52,785
83,946
791
weighted avg.
portfolio
0.9%
1.0%
2.0%
3.1%
1.7%
16.6%
portfolio
2.6%
0.9%
1.5%
1.2%
1.3%
16.6%
portfolio
1.0%
1.7%
0.9%
1.2%
0.0%
0.0%
200.0%
228.9%
255.2%
160.4%
297.6%
601.5%
>30days)
Wasil
VDO
Akhuwat
Sub
1,938
7,487
17,241
11,850
143,286
1,398
4,792
15,952
11,850
121,354
Loan loss reserve
3,331
5,120
1,452
24,525
572,548
549
15,647
1,008
6,504
679,613
year
56,105
115,659
29,047
2,465,625
15,315,461
28,465
105,869
39,120
2,013,867
13,549,821
weighted avg.
portfolio
3.5%
6.5%
59.4%
0.5%
0.9%
portfolio
2.5%
4.1%
54.9%
0.5%
0.8%
portfolio
1.9%
14.8%
2.6%
0.3%
5.0%
MFI
BAIDRE
100
Annexures
MFI
>30days)
BAIDRE
Wasil
VDO
Akhuwat
Sub
171.9%
68.4%
8.4%
207.0%
399.6%
NRSP
PRSP
SRSP
TRDP
SRSO
Sub
101,070
RSP
23,148
2,032
-
22,674
53,216
20,152
1,922
-
22,425
49,532
94,032
Loan loss reserve
88,494
79,562
28
967
71,946
240,997
year
81,476
-
28
-
45,611
127,115
7,653,444
1,149,283
37,519
1,376,726
1,209,504
11,426,476
6,618,924
1,026,474
34,846
1,083,258
1,143,738
9,907,240
weighted avg.
portfolio
0.3%
0.2%
0.0%
1.6%
4.4%
0.9%
portfolio
0.3%
0.2%
0.0%
1.6%
4.1%
0.8%
portfolio
1.2%
0.0%
0.1%
0.0%
4.0%
1.3%
382.3%
3916.2%
0.0%
4.3%
135.2%
238.4%
Sub MFB
Sub MFI
Sub RSP
Total
415,062
143,286
101,070
659,418
164,251
121,354
94,032
379,637
Loan loss reserve
376,338
572,548
240,997
1,189,884
year
415,348
679,613
127,115
1,222,076
36,789,528
15,315,461
11,426,476
63,531,465
32,520,176
13,549,821
9,907,240
55,977,237
>30days)
weighted avg.
101
portfolio
1.1%
0.9%
0.9%
1.0%
portfolio
0.4%
0.8%
0.8%
0.6%
portfolio
1.3%
5.0%
1.3%
2.2%
90.7%
399.6%
238.4%
180.4%
>30days)
102
Annexures
AIII - Social
Performance
Indicators of
Individual MFPs 2014
MFPs
Social Goals
1.1
Target market
KBL
TMFB
FMFBP
FINCA
WMFB
Clients living in rural areas
P
P
P
P
P
Clients living in urban areas
P
P
P
P
P
Women
P
P
P
P
P
Increased access to financial
services
P
P
P
P
P
Poverty reduction
P
P
P
Adolescents and youth
(below 18)
None of the above
1.2
Development goals
P
P
Employment generation
P
P
Development of start-up
enterprises
P
Growth of existing businesses
103
P
P
P
P
Improvement of adult
education
Youth opportunities
Children’s schooling
Health improvement
P
Gender equality and women’s empowerment
P
Water and sanitation
Housing
None of the above
P
P
AIII - Social Performance Indicators of Individual MFPs 2014
1.3
Poverty level
Very poor clients
Poor clients
P
P
P
P
P
Low income clients
P
P
P
P
P
P
P
P
P
P
No specific poverty target
1.4
Does MFP measure
poverty
Yes
No
Unknown
1.5
Poverty measurement
tool
Grameen Progress out of
Poverty Index (PPI)
P
USAID Poverty Assessment
Tool (PAT)
Per capita household
expenditure
P
Per capita household income
P
P
Participatory Wealth Ranking (PWR)
Housing index
Food security index
Means test
P
Own proxy poverty index
P
None of the above
P
P
Governance and HR
2.1
Board orientation of
social mission
Yes
P
P
P
P
P
P
P
P
No
Unknown
SPM champion/ committee at Board
Yes
No
P
Unknown
2.3
Board experience in
SPM
Yes
P
P
P
P
P
No
Unknown
2.4
Staff incentives related
to SP
Number of clients
P
P
P
P
Quality of interactionw
ith clients based on client
feedback mechanism
P
P
Quality of social data
collected
Portfolio quality
P
P
P
P
P
2.2
104
Annexures
None of the above
2.5
How number of clients
is incentivized
Total number of clients
P
P
P
P
P
Client retention
P
P
None of the above
2.6
HR policies related
to SP
P
P
P
Social protection (medical
insurance and/or pension
contribution)
P
P
Safety policy
P
P
Anti-harassment policy
P
P
Non-discrimination policy
P
Grievance resolution policy
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
None of the above
Products and Services
3.1
Types of credit products
Non-income generating
loans
Does not offer credit
products
3.2
Types of income generating loans
Microenterprise loans
P
SME loans
Agriculture/livestock loans
P
P
Express loans
P
P
P
P
P
P
P
P
P
P
None of the above
3.3
105
Types of non-income
generating loans
Education loans
Emergency loans
P
Housing loans
P
P
Other household needs/
consumption
P
P
None of the above
3.4
Types of savings
products
P
P
Compulsory sacings
accounts
Voluntary savings accounts
Does not offer savings
accounts
P
P
P
3.5
Types of voluntary
savings products
Demand deposit accounts
P
P
P
P
Time deposit accounts
P
P
P
P
None of the above
3.6
Compulory insurance
required
Yes
P
P
P
P
P
P
P
P
P
P
P
No
Unknown
3.7
Types of compulory
insurance required
P
P
P
None of the above
3.8
Voluntary insurance
offered
Yes
P
P
P
No
P
P
P
P
Unknown
3.9
Types of voluntary
insurance offered
P
Health insurance
P
P
P
House insurance
Workplace insurance
None of the above
3.10
Other financial services
offered
Yes
P
P
Debit/credit card
P
P
Mobile/branchless banking
services
P
P
P
P
No
Unknown
Types of other financial
services offered
Savings facilitation services
P
Remittance/money transfer
services
P
Payment services
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Microleasing
Scholarship/educational
grants
None of the above
3.12
Enterprise services
offered
Yes
No
Unknown
P
3.11
106
Annexures
3.13
Types of enterprise
services offered
Enterprise skills development
Business development
services
None of the above
3.14
Women’s enpowerment
services
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Yes
No
Unknown
3.15
Types of women’s
empowerment services
offered
Leadership training for
women
Women’s rights education/
gender issues training
Counseling/legal services for
female victims of voilence
None of the above
3.16
Education services
offered
Yes
No
P
P
P
Unknown
3.17
Types of education
services offered
Financial literacy education
P
Basic health/nutrition
education
Child and youth education
Occupational health and
safety in the workplace
education
None of the above
3.18
Health services offered
P
P
P
P
P
P
P
None of the above
P
P
P
P
P
Yes
P
P
P
P
P
Yes
No
Unknown
3.19
107
Types of health services
offered
Basic medical services
Special medical services for
women and children
Client Protection
4.1
Do policies support
good repayment capacity analysis
No
Unknown
4.2
Does internal audit
verify compliance with
policies
Yes
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
No
Unknown
4.3
Are prices, installments,
terms and conditions
fully disclosed to clients
Yes
No
Unknown
4.4
Are annual percentage
rates (APR) of loan
products disclosed
Yes
No
Unknown
4.5
Is the code of conduct
clearly defined
Yes
No
Unknown
4.6
Are violations of the
code of conduct sanctioned
Yes
No
Unknown
4.7
4.8
Is there a clear reporting system in place for
complaints from clients
at branches
Yes
Do contracts include a
data privacy clause
Yes
No
Unknown
No
Unknown
How interest rate of
most representative
credit product is stated
Declining balance interest
method
P
Flat interest method
P
P
P
P
Environment
5.1
Environmental policies
in place
Awareness raising on environmental impacts
P
Clauses in loan contracts
requiring clients to imrove
environmental practices/
mitigate environmental risks
Tools to evaluate environmental risks of clients’
activities
P
P
P
P
P
P
4.9
108
Annexures
Specific loans linked to
environmentally friendly
products and/or practices
P
P
P
P
P
P
None of the above
5.2
Types of environmentally friendly products
and/or practices
offered
Products related to renewable energy (e.g. solar
panels, biogas digesters etc)
Products related to energy
efficiency (e.g. insulation,
improved cooking stove etc)
P
Products related to environmentally friendly practices
(e.g. organic farming,
recycling, waste management etc)
None of the above
109
P
P
MFIs
Social Goals
1.1
Target market
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
P
P
P
P
Women
P
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
P
P
P
P
P
Women
P
P
P
P
(below 18)
None of the above
(below 18)
P
None of the above
MOJAZ
NRDP
Nayment
OCT
P
P
P
P
P
P
Women
P
P
RCDS
OPD
P
P
P
P
P
Sungi
SSF
SVDP
P
P
P
P
P
P
P
Women
P
P
P
(below 18)
(below 18)
P
P
None of the above
1.2
Development goals
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
services
P
P
P
P
P
Poverty reduction
P
P
P
P
P
P
P
P
P
enterprises
P
None of the above
110
Annexures
P
P
P
P
P
P
P
education
Youth opportunities
Children's schooling
Health improvement
P
Gender equality and women's empowerment
P
P
Housing
P
P
None of the above
CSC
DAMEN
FFO
JWS
Kashf
services
P
P
P
P
P
Poverty reduction
P
P
P
P
P
P
P
enterprises
P
P
P
P
P
P
P
P
education
Youth opportunities
Health improvement
P
P
P
P
P
Housing
P
None of the above
MOJAZ
NRDP
Nayment
OCT
OPD
services
P
P
P
P
P
Poverty reduction
P
P
P
P
P
P
P
enterprises
P
P
education
Youth opportunities
P
P
Health improvement
Housing
111
P
P
P
None of the above
RCDS
Sungi
SSF
SVDP
services
P
P
P
P
Poverty reduction
P
P
P
P
P
P
P
P
P
P
P
P
P
P
enterprises
P
P
education
Youth opportunities
P
Health improvement
P
P
P
P
P
Housing
None of the above
AGAHE
Poverty level
AMRDO
ASA Pak
Very poor clients
P
Poor clients
Low income clients
BEDF
P
P
P
P
P
P
P
P
FFO
JWS
Kashf
CSC
DAMEN
Poor clients
P
P
Low income clients
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
Very poor clients
P
Very poor clients
P
Poor clients
P
P
Low income clients
P
P
P
P
RCDS
Sungi
SSF
SVDP
Very poor clients
P
Poor clients
P
Low income clients
P
P
P
P
P
1.3
Akhuwat
112
Annexures
1.4
Does MFP measure
poverty
Yes
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
P
RCDS
Sungi
SSF
SVDP
P
P
AMRDO
ASA Pak
BEDF
P
P
JWS
Kashf
No
Unknown
Yes
No
Unknown
Yes
No
Unknown
Yes
P
No
P
Unknown
AGAHE
1.5
Poverty measurement
tool
Akhuwat
Poverty Index (PPI)
Tool (PAT)
expenditure
P
Housing index
P
Food security index
Means test
None of the above
P
CSC
DAMEN
FFO
Poverty Index (PPI)
Tool (PAT)
113
expenditure
Housing index
Food security index
P
Means test
P
P
P
None of the above
P
MOJAZ
P
NRDP
Poverty Index (PPI)
Nayment
OCT
P
P
SSF
SVDP
OPD
Tool (PAT)
expenditure
Housing index
Food security index
Means test
None of the above
Poverty Index (PPI)
P
P
RCDS
Sungi
P
P
Tool (PAT)
expenditure
P
P
Housing index
Food security index
Means test
None of the above
P
P
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
AGAHE
2.1
Board orientation of
social mission
Yes
No
Unknown
Yes
P
No
P
P
Unknown
Yes
No
Unknown
MOJAZ
NRDP
Nayment
OCT
P
P
P
P
OPD
P
Governance and HR
114
Annexures
RCDS
Yes
Sungi
P
SSF
SVDP
P
P
AMRDO
ASA Pak
No
Unknown
P
AGAHE
2.2
SPM champion/ committee at Board
Yes
No
Akhuwat
P
P
BEDF
P
P
P
FFO
JWS
Kashf
P
P
OCT
OPD
P
P
Unknown
CSC
DAMEN
P
P
Yes
No
Unknown
P
MOJAZ
NRDP
Yes
No
Nayment
P
P
P
RCDS
Sungi
Unknown
Yes
SSF
SVDP
P
P
Akhuwat
AMRDO
ASA Pak
P
P
P
No
Unknown
P
AGAHE
2.3
Board experience in
SPM
Yes
BEDF
P
No
Unknown
Yes
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
No
Unknown
Yes
No
115
P
Unknown
Yes
No
Unknown
RCDS
Sungi
SSF
SVDP
P
P
P
P
AGAHE
2.4
Staff incentives related
to SP
Number of clients
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
P
feedback mechanism
collected
Portfolio quality
None of the above
P
CSC
P
DAMEN
Number of clients
FFO
JWS
P
Kashf
P
feedback mechanism
collected
Portfolio quality
None of the above
Number of clients
P
P
MOJAZ
NRDP
P
P
P
P
P
Nayment
OCT
OPD
P
feedback mechanism
P
collected
Portfolio quality
P
P
RCDS
Sungi
None of the above
Number of clients
P
P
P
SSF
SVDP
P
feedback mechanism
collected
P
Portfolio quality
P
P
None of the above
How number of clients
is incentivized
Akhuwat
AMRDO
ASA Pak
P
BEDF
P
Client retention
None of the above
P
P
CSC
DAMEN
P
P
FFO
JWS
P
P
Client retention
None of the above
Kashf
P
P
P
AGAHE
2.5
P
116
Annexures
MOJAZ
NRDP
Nayment
P
P
None of the above
P
P
SSF
SVDP
P
RCDS
OPD
P
Client retention
OCT
Sungi
P
P
Client retention
P
None of the above
AGAHE
2.6
HR policies related
to SP
contribution)
Safety policy
P
P
P
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
P
None of the above
contribution)
Safety policy
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
P
None of the above
contribution)
Safety policy
117
P
P
P
P
P
P
P
P
P
P
P
P
P
None of the above
RCDS
Sungi
SSF
contribution)
P
P
P
Safety policy
P
P
P
P
P
SVDP
P
P
P
P
P
P
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
None of the above
3.1
loans
P
products
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
P
loans
products
loans
P
products
RCDS
Sungi
SSF
SVDP
P
P
P
P
loans
P
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
P
P
3.2
SME loans
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
Express loans
None of the above
SME loans
P
P
Express loans
None of the above
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
P
products
118
Annexures
SME loans
P
P
P
P
P
P
P
Express loans
None of the above
RCDS
Sungi
SSF
SVDP
P
P
P
P
SME loans
P
P
P
P
P
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
Express loans
None of the above
3.3
Types of non-income
generating loans
Education loans
P
Emergency loans
P
Housing loans
P
consumption
None of the above
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Education loans
Emergency loans
Housing loans
consumption
None of the above
Nayment
OCT
OPD
Education loans
P
P
P
Emergency loans
P
Housing loans
consumption
None of the above
P
P
RCDS
Sungi
P
P
SSF
SVDP
Education loans
Emergency loans
119
P
P
Housing loans
consumption
None of the above
AGAHE
3.4
Types of savings
products
Compulsory savings
accounts
P
P
Akhuwat
AMRDO
ASA Pak
BEDF
accounts
P
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
Nayment
OCT
OPD
P
P
P
Sungi
SSF
SVDP
P
P
P
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
Compulsory savings
accounts
P
P
accounts
P
P
MOJAZ
NRDP
Compulsory savings
accounts
accounts
P
P
RCDS
Compulsory savings
accounts
P
accounts
3.5
Types of voluntary
savings products
None of the above
None of the above
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
P
RCDS
Sungi
SSF
SVDP
P
P
P
P
AGAHE
Akhuwat
AMRDO
ASA Pak
None of the above
None of the above
3.6
Compulory insurance
required
Yes
P
No
BEDF
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
Unknown
Yes
No
Unknown
120
Annexures
MOJAZ
Yes
NRDP
P
No
Nayment
OCT
OPD
P
P
P
P
Unknown
RCDS
Yes
Sungi
SSF
P
No
SVDP
P
P
P
Akhuwat
AMRDO
Unknown
AGAHE
3.7
Types of compulory
insurance required
P
ASA Pak
BEDF
P
None of the above
P
P
CSC
DAMEN
FFO
JWS
P
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
None of the above
P
P
P
P
Sungi
SSF
P
P
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
FFO
JWS
Kashf
None of the above
RCDS
SVDP
P
P
None of the above
AGAHE
3.8
Voluntary insurance
offered
Yes
No
P
Unknown
CSC
DAMEN
Yes
No
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
Unknown
Yes
No
Unknown
121
P
P
P
Yes
RCDS
Sungi
SSF
P
P
P
No
SVDP
P
Unknown
AGAHE
3.9
Types of voluntary
insurance offered
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
FFO
JWS
Kashf
P
Health insurance
P
House insurance
Workplace insurance
None of the above
P
CSC
DAMEN
P
P
Health insurance
P
P
House insurance
Workplace insurance
None of the above
P
P
P
MOJAZ
NRDP
Nayment
OCT
P
OPD
P
P
Health insurance
House insurance
Workplace insurance
None of the above
P
RCDS
P
P
Sungi
SSF
SVDP
P
P
P
Health insurance
P
House insurance
Workplace insurance
None of the above
P
AGAHE
3.10
Other financial services
offered
Yes
No
Unknown
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
122
Annexures
CSC
Yes
No
DAMEN
FFO
JWS
Kashf
P
P
P
P
Nayment
OCT
OPD
P
P
P
P
Unknown
MOJAZ
NRDP
Yes
No
P
P
RCDS
Sungi
SSF
SVDP
P
P
P
P
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
Unknown
Yes
No
Unknown
3.11
Types of other financial
services offered
Debit/credit card
services
services
Payment services
Microleasing
grants
None of the above
P
P
CSC
P
P
P
DAMEN
FFO
JWS
Kashf
P
P
P
P
OCT
OPD
Debit/credit card
services
P
services
Payment services
Microleasing
grants
None of the above
123
P
MOJAZ
NRDP
Nayment
Debit/credit card
services
services
Payment services
Microleasing
P
grants
None of the above
P
P
RCDS
Sungi
P
P
SSF
SVDP
Debit/credit card
services
P
services
Payment services
Microleasing
grants
None of the above
3.12
Enterprise services
offered
Yes
P
P
AGAHE
Akhuwat
P
No
P
AMRDO
ASA Pak
P
P
BEDF
P
P
Unknown
Yes
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
No
Unknown
Yes
No
P
Unknown
Yes
RCDS
Sungi
P
P
No
SSF
SVDP
P
P
AMRDO
ASA Pak
AGAHE
3.13
Types of enterprise
services offered
Akhuwat
P
P
BEDF
P
services
P
None of the above
P
CSC
DAMEN
P
P
services
P
None of the above
P
MOJAZ
NRDP
P
FFO
JWS
Kashf
P
P
P
P
P
Nayment
OCT
OPD
Unknown
124
Annexures
P
services
P
P
P
P
P
None of the above
P
RCDS
Sungi
P
P
SSF
SVDP
services
P
P
P
Akhuwat
AMRDO
ASA Pak
P
P
None of the above
AGAHE
3.14
Women’s enpowerment
services
Yes
No
P
BEDF
P
P
Unknown
CSC
Yes
DAMEN
P
No
FFO
JWS
Kashf
P
P
P
OPD
P
Unknown
Yes
MOJAZ
NRDP
Nayment
OCT
P
P
P
P
No
P
Unknown
Yes
RCDS
Sungi
P
P
No
SSF
SVDP
P
P
AMRDO
ASA Pak
Unknown
AGAHE
3.15
Types of women’s
empowerment services
offered
Akhuwat
women
Women's rights education/
P
BEDF
P
P
P
P
None of the above
125
P
CSC
P
FFO
JWS
Kashf
women
P
DAMEN
P
P
P
P
P
None of the above
P
P
MOJAZ
women
NRDP
Nayment
OCT
P
P
P
SSF
SVDP
P
P
AMRDO
ASA Pak
OPD
None of the above
P
P
P
RCDS
Sungi
women
P
P
P
P
P
None of the above
AGAHE
3.16
Education services
offered
Akhuwat
Yes
No
BEDF
P
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
OCT
OPD
P
P
Unknown
Yes
No
P
P
P
Unknown
MOJAZ
Yes
No
NRDP
Nayment
P
P
P
Unknown
RCDS
Yes
Sungi
SSF
P
No
SVDP
P
P
P
Akhuwat
AMRDO
AGAHE
3.17
Types of education
services offered
ASA Pak
BEDF
P
education
education
None of the above
P
P
P
P
CSC
DAMEN
FFO
JWS
P
Kashf
P
Unknown
126
Annexures
education
P
education
None of the above
P
MOJAZ
P
NRDP
P
education
P
P
Nayment
OCT
OPD
P
P
P
education
None of the above
P
RCDS
P
education
P
P
education
P
None of the above
AGAHE
3.18
Yes
Sungi
P
P
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
FFO
JWS
Kashf
P
P
CSC
DAMEN
Yes
No
SVDP
P
No
Unknown
SSF
P
P
P
P
MOJAZ
NRDP
Nayment
P
Unknown
Yes
No
127
OCT
OPD
P
P
P
P
P
RCDS
Sungi
P
P
Unknown
Yes
No
Unknown
SSF
SVDP
P
P
AGAHE
3.19
Types of health services
offered
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
FFO
JWS
Kashf
P
women and children
None of the above
P
CSC
DAMEN
P
women and children
None of the above
P
P
P
MOJAZ
NRDP
Nayment
P
OCT
OPD
P
P
women and children
None of the above
P
P
P
RCDS
Sungi
P
P
SSF
SVDP
P
women and children
None of the above
P
Client Protection
4.1
Do policies support
good repayment capacity analysis
Yes
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
No
Unknown
Yes
No
Yes
No
Unknown
Yes
P
RCDS
Sungi
SSF
SVDP
P
P
P
P
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
No
Unknown
4.2
Does internal audit
verify compliance with
policies
Yes
No
Unknown
Unknown
128
Annexures
Yes
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
P
RCDS
Sungi
SSF
SVDP
P
P
P
P
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
P
RCDS
Sungi
SSF
SVDP
P
P
P
P
AGAHE
Akhuwat
AMRDO
ASA Pak
P
P
P
DAMEN
FFO
JWS
Kashf
P
P
P
P
NRDP
Nayment
OCT
OPD
No
Unknown
Yes
No
Unknown
Yes
No
Unknown
4.3
Are prices, installments,
terms and conditions
fully disclosed to clients
Yes
No
Unknown
Yes
No
Unknown
Yes
No
Unknown
Yes
No
Unknown
4.4
Are annual percentage
rates (APR) of loan
products disclosed
Yes
P
No
BEDF
P
Unknown
129
CSC
Yes
No
P
Unknown
MOJAZ
Yes
No
Unknown
P
P
P
P
P
Yes
RCDS
Sungi
P
P
No
SSF
SVDP
P
P
Unknown
AGAHE
4.5
Is the code of conduct
clearly defined
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
P
RCDS
Sungi
SSF
SVDP
P
P
P
P
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
P
RCDS
Sungi
SSF
SVDP
P
P
P
P
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
P
P
Yes
No
P
Unknown
Yes
No
Unknown
Yes
No
Unknown
Yes
No
Unknown
4.6
Are violations of the
code of conduct sanctioned
Yes
No
Unknown
Yes
No
Yes
No
Unknown
Yes
No
Unknown
4.7
Is there a clear reporting system in place for
complaints from clients
at branches
Yes
No
Unknown
130
Annexures
Unknown
Yes
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
P
P
P
RCDS
Sungi
SSF
SVDP
P
P
P
P
AGAHE
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
No
Unknown
Yes
No
Unknown
Yes
No
Unknown
4.8
Do contracts include a
data privacy clause
Yes
P
No
P
P
DAMEN
FFO
JWS
Kashf
P
P
P
P
NRDP
Nayment
OCT
OPD
Unknown
CSC
Yes
No
P
Unknown
MOJAZ
Yes
P
No
P
P
P
P
Unknown
RCDS
Yes
Sungi
SSF
P
No
SVDP
P
P
P
Akhuwat
AMRDO
ASA Pak
BEDF
P
P
P
FFO
JWS
Kashf
Unknown
AGAHE
4.9
131
How interest rate of
most representative
credit product is stated
method
P
CSC
method
DAMEN
P
P
MOJAZ
method
P
P
NRDP
P
P
P
P
Nayment
OCT
OPD
P
P
P
RCDS
Sungi
SSF
method
SVDP
P
P
P
P
AGAHE
Akhuwat
AMRDO
P
P
P
P
P
Tools to evaluate environmental risks of clients'
activities
P
Environment
Environmental policies
in place
BEDF
P
P
None of the above
P
CSC
DAMEN
FFO
JWS
P
P
P
P
P
P
activities
Kashf
P
P
None of the above
MOJAZ
P
activities
NRDP
Nayment
P
P
OCT
OPD
P
P
P
P
P
None of the above
RCDS
Sungi
SSF
SVDP
P
P
P
P
P
P
P
5.1
ASA Pak
132
Annexures
activities
P
P
None of the above
AGAHE
5.2
Types of environmentally friendly products
and/or practices
offered
Akhuwat
AMRDO
ASA Pak
BEDF
P
None of the above
P
P
P
P
CSC
DAMEN
FFO
JWS
Kashf
P
P
P
P
P
MOJAZ
NRDP
Nayment
OCT
OPD
P
P
None of the above
133
P
P
P
None of the above
P
RCDS
None of the above
SSF
SVDP
P
P
P
Sungi
P
P
RSPs
Social Goals
1.1
Target market
P
P
P
P
Women
P
P
P
Adolescents and youth (below
18)
None of the above
.
1.2
Development goals
services
P
P
Poverty reduction
P
P
P
P
enterprises
P
P
P
P
P
Gender equality and women’s
empowerment
P
P
P
P
Improvement of adult education
Youth opportunities
Children’s schooling
Health improvement
Housing
None of the above
.
Poverty level
Very poor clients
P
Poor clients
P
P
Low income clients
P
P
.
1.4
Does MFP measure poverty
Yes
P
No
Unknown
P
.
1.5
Poverty measurement tool
Grameen Progress out of Poverty Index (PPI)
Tool (PAT)
P
1.3
134
Annexures
Per capita household expenditure
Participatory Wealth Ranking
(PWR)
P
Housing index
Food security index
Means test
None of the above
P
P
Governance and HR
2.1
Board orientation of social mission
Yes
P
P
No
Unknown
P
.
2.2
SPM champion/ committee at
Board
Yes
No
P
P
P
Unknown
.
2.3
Board experience in SPM
Yes
P
P
P
No
Unknown
.
2.4
Staff incentives related to SP
Number of clients
P
Quality of interactionw ith
lients based on client feedback
mechanism
P
Quality of social data collected
Portfolio quality
P
P
None of the above
P
.
2.5
135
How number of clients is incentivized
P
P
P
Client retention
P
None of the above
P
.
2.6
HR policies related to SP
contribution)
P
Safety policy
P
P
P
P
P
P
P
P
P
P
None of the above
.
3.1
P
P
P
Non-income generating loans
Does not offer credit products
.
3.2
P
P
P
P
P
P
SME loans
Express loans
None of the above
.
3.3
Types of non-income generating
loans
Education loans
P
Emergency loans
P
Housing loans
P
Other household needs/consumption
P
None of the above
P
P
.
3.4
Types of savings products
Compulsory sacings accounts
Does not offer savings accounts
P
P
P
.
3.5
Types of voluntary savings
products
None of the above
P
P
P
3.6
Compulory insurance required
Yes
P
P
P
.
.
No
Unknown
3.7
Types of compulory insurance
required
P
P
P
P
P
None of the above
.
3.8
Voluntary insurance offered
Yes
No
P
P
P
.
.
Unknown
.
136
Annexures
3.9
Types of voluntary insurance
offered
Health insurance
House insurance
Workplace insurance
None of the above
P
P
P
.
3.10
Other financial services offered
Yes
P
No
P
P
.
.
P
P
Unknown
3.11
Types of other financial services
offered
Debit/credit card
services
P
services
Payment services
Microleasing
Scholarship/educational grants
None of the above
.
3.12
Enterprise services offered
Yes
P
No
P
P
Unknown
.
3.13
Types of enterprise services offered
P
Business development services
P
None of the above
P
P
.
3.14
Women’s enpowerment services
Yes
P
No
P
P
Unknown
.
137
3.15
Types of women’s empowerment
services offered
Leadership training for women
P
Women’s rights education/gender issues training
P
P
None of the above
P
.
3.16
Education services offered
Yes
No
P
P
P
Unknown
.
3.17
Types of education services offered
P
P
Basic health/nutrition education
P
P
P
Occupational health and safety
in the workplace education
None of the above
P
.
3.18
Yes
No
P
P
P
Unknown
.
3.19
Types of health services offered
women and children
None of the above
P
P
P
.
Client Protection
4.1
Do policies support good repayment capacity analysis
Yes
P
P
P
No
Unknown
.
4.2
Does internal audit verify compliance with policies
Yes
P
P
P
P
P
No
Unknown
.
4.3
Are prices, installments, terms and
conditions fully disclosed to clients
Yes
P
No
Unknown
4.4
Are annual percentage rates (APR)
of loan products disclosed
Yes
P
No
P
P
Unknown
.
4.5
Is the code of conduct clearly
defined
Yes
P
P
P
No
Unknown
.
4.6
Are violations of the code of conduct sanctioned
Yes
P
P
No
Unknown
P
.
.
138
Annexures
4.7
Is there a clear reporting system in
place for complaints from clients
at branches
Yes
P
P
P
No
Unknown
.
4.8
Do contracts include a data privacy
clause
Yes
P
P
P
No
Unknown
.
4.9
How interest rate of most representative credit product is stated
method
P
P
P
.
Environment
5.1
Environmental policies in place
P
P
requiring clients to imrove environmental practices/mitigate
environmental risks
Tools to evaluate environmental
risks of clients’ activities
P
Specific loans linked to environmentally friendly products and/
or practices
None of the above
.
5.2
Types of environmentally friendly
products and/or practices offered
Products related to renewable
energy (e.g. solar panels, biogas
digesters etc)
P
Products related to energy efficiency (e.g. insulation, improved
cooking stove etc)
P
Products related to environmentally friendly practices (e.g.
organic farming, recycling, waste
management etc)
P
None of the above
139
P
P
Annexure B - Regional Benchmarks 2014
Annexure B - Regional
Benchmarks 2014
Outreach
Number of MFIs
Africa
Asia
EAP1
ECA2
LAC3
MENA4
All Regions
309
179
158
208
374
40
1,268
Gross Loan Portfolio (in
USD million)
7,037
9,453
9,661
12,105
35,963
1,125
54,943
Number of active borrowers (in '000)
4,719
52,871
12,781
2,680
20,558
1,601
87,476
Deposits (in USD million)
5,017
3,446
46,654
7,298
24,133
22
86,702
16,000
27,348
10,190
4,344
17,977
63
71,373
Average loan balance per
borrower (in USD)
327
18
1,538
1,490
360
234
392
Average loan balance per
borrower / GNI per capita
59%
1.60%
55.80%
53.60%
5.80%
6.70%
17.00%
9,695
1,780
4,605
11,509
7,911
660
70,665
Number of depositors
(in '000)
Funding Structure
Assets (in USD million)
Debt to equity ratio
3.2
6.7
2.5
4.7
3.4
1
3.7
Capital /asset ratio
23.70%
12.90%
29%
18%
23%
51%
21.10%
Gross loan portfolio to
total assets
65.60%
79.40%
69%
67%
90%
76%
77.80%
Operating expense / loan
portfolio
15.40%
9.10%
5%
11%
15%
16%
10.90%
Operating expense /
assets
15.50%
8.80%
9%
7%
11%
13%
10.30%
Cost per borrower (in
USD)
147
14
74
295
239
95
86
Profitability
Return on assets
1.10%
0.03%
1.00%
0.90%
0.80%
0.50%
0.80%
Return on equity
4.20%
0.60%
3.20%
5.30%
4.90%
1.40%
4.40%
103.10%
93.30%
122%
109%
103%
105%
106%
1.80%
0.40%
0.00%
1.60%
5.20%
1.50%
1.10%
Operational self sufficiency
Risk Profile
1.10%
0.20%
0.00%
1.10%
3.40%
1.20%
0.70%
Write-off ratio
4.30%
0.10%
0.00%
0.80%
0.60%
0.90%
0.70%
Effeciency
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Annexures
Annexure C
Sources of data
(2014)
Microfinance Banks (MFBs)
APNA Microfinance Bank Ltd (AMFB)
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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 2014.
The financial statements have been presented as per the requirements of the State Bank of Pakistan.
The related party transactions have been properly disclosed in notes to the financial statements.
The grant income has been properly disclosed in financial statements and there is proper disclosure on grants
in notes to the financial statements.
The following numbers have been taken from AMFB’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).
FINCA Microfinance Bank Ltd (FINCA)
(Formerly Kashf Microfinance Bank Ltd)
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141
FINCA provided PMN with its audited accounts. The numbers reported in the PMR match these reports. M.
Yossuf Adil Saleem and Co. audited the annual accounts of FINCA for the year ending at 31st December 2014.
The following numbers have been taken from FINCA’s MIS: i). rural-urban clients; ii). male-female clients; iii).
Khushhali Bank Ltd (KBL)
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KBL provided PMN with its audited accounts. The numbers reported in the PMR match these reports. A.F.
Ferguson audited the annual accounts of KBL for the year ending at 31st December 2014.
The grant income has been properly disclosed in financial statements and there is a proper disclosure on
grants in notes to the financial statements.
The following numbers have been taken from KBL’s MIS: i). rural-urban clients; ii). male-female clients; iii).
Portfolio aging; iv). Number of staff; v). Number of credit officers; and vi). Number of branches (also available
in audited accounts).
Annexure C Sources of data (2014)
The First Microfinance Bank Ltd (FMFBL)
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FMFB provided PMN with its audited accounts. The numbers reported in the PMR match these reports. KPMG
audited the annual accounts of FMFBL for the year ending at 31st December 2014.
The following numbers have been taken from the MIS: i). rural-urban clients; ii). male-female clients; iii). Portfolio aging; iv). Number of staff; v). Number of credit officers; and vi). Number of branches (also available in
audited accounts).
National Rural Support Programme Microfinance Bank (NRSP-B)
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NRSP-B provided PMN with its audited accounts. The numbers reported in the PMR match these reports.
M. Yossuf Adil Saleem and Co. audited the annual accounts of NRSP-B for the year ending at 31st December
2014.
audited accounts).
Pak Oman Microfinance Bank Ltd (POMFB)
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POMFB reported its audited accounts in newspapers, from whence the accounts were obtained. The numbers
reported in the PMR match these reports. M. Yossuf Adil Saleem and Co. audited the annual accounts of POMFB for the year ending at 31st December 2014.
audited accounts).
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TMFB provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Ernst
and Young Ford Rhodes Sidat Hyder and Co. audited the annual accounts of TMFB for the year ending at 31st
December 2014.
audited accounts).
U Microfinance Bank Ltd (U-bank)
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U-bank provided PMN with its audited accounts. The numbers reported in the PMR match these reports. A.F.
Ferguson audited the annual accounts of FINCA for the year ending at 31st December 2014.
Tameer Microfinance Bank Ltd (TMFB)
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Annexures
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audited accounts).
Waseela Microfinance Bank Ltd (WMFB)
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Waseela provided PMN with its audited accounts. The numbers reported in the PMR match these reports.
KPMG audited the annual accounts of FINCA for the year ending at 31st December 2014.
The grant income has been properly disclosed in financial statements there is proper disclosure on grants in
notes to the financial statements.
audited accounts).
Microfinance Institution (MFI)
ASA Pakistan limited (ASA-P)
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ASA-P provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Ernst
and Young Ford Rhodes Sidat Hyder and Co has audited the annual accounts of ASA-P for the year ending at
31st December 2014.
ASA-P 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-P is aggressive in its policies.
The following numbers have been taken from the organization’s MIS: i). rural-urban clients; and ii). male-female clients;
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.
Agahe
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Agahe provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Uzair
Hammad Faisal & Co. has audited the annual accounts of Agahe for the year ending at 31st December 2014.
Agahe prepares its financial statements under the historical cost convention, in conformity with accepted
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.
The grant income has been properly disclosed in financial statements. Additionally, there is proper disclosure
on grants in notes to the financial statements.
Akhuwat
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Akhuwat provided PMN with its audited accounts. The numbers reported in the PMR match these reports. M.
Yossuf Adil Saleem and Co. has audited the annual accounts of ASA-P for the year ending at 30th June 2014.
Akhuwat prepares its financial statements under the historical cost convention and in conformity with accepted accounting practices.
All necessary adjustments to data have been made in order to remove subsidies. No adjustment was made to
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loan loss provisioning expense as the institute is aggressive in its policies.
The following numbers have been taken from the organization’s MIS: i). rural-urban clients; and ii). male-female clients;
Al-Mehran Rural Development Organization (AMRDO)
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AMRDO provided PMN with its audited accounts. The numbers reported in the PMR match these reports.
Hafizullah & Co. has audited the annual accounts of AMRDO for the year ending at 30th June 2014.
AMRDO prepares its financial statements under the historical cost convention, in conformity with accepted
BRAC-Pakistan
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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 ending at
31st December 2014.
BRAC prepares its financial statements under the historical cost convention and in conformity with 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.
Baidarie
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Baidarie provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Ale
Imran & Co. audited the annual accounts of Baidarie for the year ending at 30th June 2014.
All necessary adjustments to Baidarie data have been made in order to remove subsidies. No adjustment was
made to loan loss provisioning expense as CSC is aggressive in its policies.
The following numbers have been taken from the organization’s MIS: i). rural-urban clients; ii). male-female
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.
Community Support Concern (CSC)
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CSC provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Riaz
Ahmad & Co. audited the annual accounts of CSC for the year ending at 30th June 2014.
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 aggressive in its policies.
CSC prepares its financial statements under the historical cost convention and in conformity with accepted
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.
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Annexures
Farmers Friend Organization (FFO)
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FFO provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Tariq
Abdul Ghani Maqbool & Co audited the annual accounts for FFO for the year ending at 30th June 2014.
All necessary adjustments to FFO data have been made in order to remove subsidies. There is no adjustment
on loan loss provisioning expense as FFO is aggressive in its policies.
FFO prepares its financial statements under the historical cost convention and in conformity with accepted
clients; iii). Aging on number of loans and value of portfolio iv). Number of staff; v). Number of credit officers;
and vi). Number of offices.
DEEP Foundation (DEEP)
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DEEP provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Salman Arshad audited the annual accounts for DEEP for the year ending at 30th June 2014.
DEEP prepares its financial statements under the historical cost convention and in conformity with accepted
clients; iii). Aging on number of loans and value of portfolio iv). Number of staff; v). Number of credit officers;
and vi). Number of offices.
Development Action for Mobilization and Emancipation (DAMEN)
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DAMEN provided PMN with its audited accounts. The numbers reported in the PMR match these reports.
Grant Thornton (Anjum Asim Shahid Rehman) audited the annual accounts for DAMEN for the year ending at
31st December 2014.
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 historical cost convention and in conformity with accepted accounting practices.
clients; iii). Aging on number of loans and 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)
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145
KF provided PMN with its audited accounts. The numbers reported in the PMR match these reports. KPMG
(Taseer Hadi and Co) audited the annual accounts for KF for the year ending at 30th June 2014.
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. 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.
The following numbers have been taken from KF’s MIS: i). rural-urban clients; ii). male-female clients; iii).
Ghazi Barotha Taraqiati Idara (GBTI)
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GBTI provided PMN with its audited accounts. The numbers reported in the PMR match these reports.
KPMG (Taseer Hadi and Co) audited the annual accounts for GBTI for the year ending at 30th June 2014.
GBTI prepares its financial statements under the historical cost convention and in conformity with accepted
accounting practices. Revenue is recognized on receipt basis.
clients; iii). Aging on number of loans and 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.
The related party transactions should be presented in notes to the financial statements.
Jinnah Welfare Society (JWS)
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JWS provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Tariq
Abdul Ghani Maqbool & Co. audited the annual accounts for JWS for the year ending at 30th June 2014.
JWS prepares its financial statements under the historical cost convention and in conformity with accepted
clients; iii). Aging on number of loans and value of portfolio (verified from audited accounts); iv). Number of
staff; v). Number of credit officers; and vi). Number of branches (also available in audited accounts).
The related party transactions have been properly disclosed in notes to financial statements.
Micro Options (MO)
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MO provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Baker
Tilly Mehmood Idrees Qamar has audited the annual accounts of MO for the year ending at 31st December
2014.
MO prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
Mojaz Foundation (Mojaz)
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Mojaz provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Ibrahim, Shaikh & Co has audited the annual accounts of Mojaz for the year ending at 30th June 2014.
Mojaz prepares its financial statements under the historical cost convention, in conformity with accepted
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146
Annexures
Naymet Trust (Naymet)
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Naymet provided PMN with its audited accounts. The numbers reported in the PMR match these reports.
Izhar & Co has audited the annual accounts of Naymet for the year ending at 30th June 2014.
Naymet prepares its financial statements under the historical cost convention, in conformity with accepted
National Rural Development Program (NRDP)
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NRDP provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Izhar
& Co has audited the annual accounts of NRDP for the year ending at 30th June 2014.
NRDP prepares its financial statements under the historical cost convention, in conformity with accepted
Organization for Participatory Development (OPD)
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OPD provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Izhar &
Co has audited the annual accounts of OPD for the year ending at 30th June 2014.
OPD prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
Orangi Charitable Trust (OCT)
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Orix Leasing Pakistan Ltd. (OLP)
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147
OCT provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Tanzeem & Co. has audited the annual accounts of OCT for the year ending at 30th June 2014.
OCT prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
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 ac-
•
counting.
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)
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RCDS provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Ijaz
Tabassum & Co. audited the annual accounts for RCDS for the year ending at 30th June 2014.
RCDS prepares its financial statements under the historical cost convention and in conformity with accepted
clients; iii). Aging on number of loans and value of portfolio (verified from audited accounts); iv). Number of
staff; v). Number of credit officers; and vi). Number of branches (also available in audited accounts).
SAFCO Support Fund (SAFCO)
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SAFCO provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Grant
Thornton (Anjum Asim Shahid Rehman) audited the annual accounts for SAFCO for the year ending at 30th
June 2014.
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 historical cost convention and in conformity with accepted
accounting practices using the principles of fund accounting.
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.
Saath Development Society (SDS)
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SDS provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Tanwir
Arif & Co. has audited the annual accounts of OCT for the year ending at 30th June 2014.
SDS prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
Shadab Rural Development Organization (SRDO)
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SRDO provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Tanwir
Arif & Co. has audited the annual accounts of SRDO for the year ending at 30th June 2014.
SRDO prepares its financial statements under the historical cost convention, in conformity with accepted
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148
Annexures
Soon Valley Development Program (SVDP)
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SVDP provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Zahid
Jamil & Co. has audited the annual accounts of SVDP for the year ending at 30th June 2014.
SVDP prepares its financial statements under the historical cost convention, in conformity with accepted
Villagers Development Organization (VDO)
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VDO provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Tanwir
Arif & Co. has audited the annual accounts of VDO for the year ending at 30th June 2014.
VDO prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
Wasil Foundation (Wasil)
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Wasil provided PMN with its audited accounts. The numbers reported in the PMR match these reports. Grant
Thornton (Anjum Asim Shahid Rehman) has audited the annual accounts of VDO for the year ending at 30th
June 2014.
VDO prepares its financial statements under the historical cost convention, in conformity with accepted accounting practices.
Rural Support Programme (RSP)
National Rural Support Programme (NRSP)
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149
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 for the year
ending at 30th June 2014.
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 historical cost convention, in conformity with accepted
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.
•
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As per the CGAP requirements, portfolio quality, sustainability/profitability and asset/liability management
ratios are presented in the notes to financial statements.
Punjab Rural Support Programme (PRSP)
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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 2014.
Since PRSP is an integrated programme, the following resource allocation process was followed:
1. The identified accounts for credit and non-credit functions were directly transferred to the respective
programs.
2. All other accounts that were common to the institution were transferred in the ratio of 60% to credit and
40% to non-credit functions.
3. 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 adjustment on
loan loss provisioning expense, since PRSP is aggressive in its provisioning policies.
PRSP prepares its financial statements under the historical cost convention, in conformity with accepted
Data on distribution of clients in terms of the urban-rural 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.
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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 2014.
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 made in order to remove subsidies. There is no adjustment
on loan loss provisioning expense, since SRSP is aggressive in its policies and all loans > 90 days past due are
100% provisioned for.
SRSP prepares its financial statements under the historical cost convention in conformity with accepted accounting practices.
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.
Thardeep Rural Development Programme (TRDP)
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TRDP has provided its audited accounts for the microfinance program (inclusive of credit and non-credit functions). Grant Thornton (Anjum Asim Shahid Rehman) audited the annual accounts for TRDP for the year ending at 30th June 2014.
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 accepted accounting practices.
Sarhad Rural Support Programme (SRSP)
150
Annexures
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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)
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151
SRSO has provided its audited accounts for the microfinance program (inclusive of credit and non-credit functions). Ernst & Young Ford Rhodes Sidat Hyder and Co. audited the annual accounts for SRSO for the year
ending at 30th June 2014.
All necessary adjustments to PRSP data have been made in order to remove subsidies. There is no adjustment on loan loss provisioning expense, since PRSP is aggressive in its provisioning policies.
SRSO prepares its financial statements under the historical cost convention in conformity with accepted accounting practices.
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.
Annex D Adjustments to Financial Data
Annex 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-market-rate 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.
Inflation adjustment revenue
Net Fixed Assets (Prior Year) X Average Annual Inflation Rate (Current Financial Year)
Inflation adjustment expense
Equity (Prior Year) X Average Annual Inflation Rate (Current Year)
Net inflation adjustment expense
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
Calculation of inflation adjustment
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Annexures
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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.
Care is taken in the choice of an appropriate shadow rate thus, PMN has used the KIBOR rate on outstanding loans
as reported by the State Bank of Pakistan on its website (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.
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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
Annex D Adjustments to Financial Data
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.
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Annexures
Annex E - Terms
and Definitions
Age
Number of years an organization has been functioning as a microfinance provider (MFP).
Active Saving Account Balance
It is the average balance of savings per account (not per depositor).
Adjustment Expense
Total adjustment cost related to inflation, subsidized cost of borrowing, loan loss provisioning and in-kind subsidies.
Adjusted Financial Expense Ratio
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 Loan Loss Reserve
Formula:
Adjusted Financial Expense
Adjusted Average Total Assets
Adjusted Operating Expense
Also included in operating expense:
• Imputed cost (book value) of donated/loaned vehicles, machinery and buildings
• Expatriate staff salaries paid by donor or parent company
• Other technical assistance paid for with donations
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NOTE: Imputed salaries should be used instead of salaries actually received by such persons, thus 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
Formula:
Personnel Expense + Administrative Expense
Adjusted Operating Expense Ratio
Formula:
Annex E - Terms and Definitions
Adjusted Portfolio at Risk > (30, 60, 90 Days)
Indicates the credit risk of a borrower above the specified number of days (30, 60, 90) past his/her due date for
installment payment.
Formula:
Outstanding balance less loans overdue > (30 or 60 or 90) Days
Adjusted Gross Loan Portfolio
Adjusted Cost per Borrower
In accounts for 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 Cost per Loan
Formula:
Average Number of Active Loans
Adjusted Financial Expense
It includes actual cost of borrowing and shadow cost of subsidized funding.
Adjusted Financial Expense on Borrowing
The cost-of-funds adjustment reflects the impact of soft loans on the financial performance of the institution.
The analyst calculates the difference between what the MFP actually paid in interest on its 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
Formula:
Adjusted Net Loan Loss Provision Expense
Adjusted Loan Loss Provision 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.
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
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Annexures
Adjusted Profit Margin
Formula:
Adjusted Net Operating Income
Adjusted Financial Revenue
Adjusted Return on Assets
Formula:
Adjusted Net Operating Income, net of taxes
Adjusted Return on Equity
Formula:
Adjusted Net Operating Income, net of taxes
Average Total Equity
Adjusted Total Expense
Includes all actual and adjusted expenses related to operations, cost of borrowings, loan losses and inflation adjustment.
Adjusted Total Expense Ratio
Formula:
Adjusted (Financial Expense + Net Loan Loss Provision Expense + Operating Expense) Cost Average Total Assets
Average 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:
[Active Borrowers (Opening Balance) + Active Borrowers (Closing Balance)]
2
Average Number of Active Loans
Average of opening and closing balance of active loans
Average Outstanding Balance
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It indicates the average balance of loans outstanding.
Formula:
Adjusted Gross Loan Portfolio
Adjusted Number of Loans Outstanding
Average Outstanding Balance to Per Capita Income
It measure of depth of outreach. The lower the ratio the more poverty-focused the MFP.
Formula:
Average Outstanding Balance
Per Capita Income
Average Saving Balance per Saver
It indicates average amount of saving balance per saver.
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.
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.
Commercial Liabilities-to-Gross Loan Portfolio Ratio
It indicates efficiency of an MFP’s loan portfolio.
Formula:
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.
It is inverse of the advance-to-deposit ratio.
Formula:
Deposits
Deposit-to-Total Asset Ratio
Indicates the percentage of assets financed through deposits.
Formula:
Deposits
Total Assets
Equity-to-Asset Ratio
This is a simple version of the capital adequacy ratio as it does not take 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
Deposit-to-Gross Loan Portfolio Ratio
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Annexures
Financial Expense
This is total of financial expense on liabilities and deposits.
Financial Revenue
This is the total revenue from loan portfolio and other financial assets, as well as other financial revenue from
financial services.
Financial Revenue from Other Financial Assets
This is net gains on other financial assets.
Financial Revenue from Loan Portfolio
This is total interest, fees and commission on loan portfolio.
Financial Revenue Ratio
Indicates the efficiency with which an MFP is utilizing its assets to earn income from them.
Formula:
Financial Revenue
Financial Self-Sufficiency
Formula:
Financial Revenue
Adjusted (Financial Expense + Net Loan Loss Provision Expense + Operating Expense + Inflation Adjustment)
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
• 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 and core business of an MFP.
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.
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Inflation Rate
Latest annualized consumer price index (CPI) as reported by the State Bank of Pakistan.
Liabilities-to-Equity Ratio (debt-equity ratio)
Formula:
Total Liabilities
Total Equity
Loan Loss Provision Expense
It is the sum of loan loss provision expense and recovery on loan loss provision.
Loans per Loan Officer
Formula:
Number of Active Loans
Number of Loan Officers
Loans per Staff
Formula:
Number of Personnel
Net Adjusted Loan Loss Provision Expense
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.
Number of borrowers with loan amount outstanding.
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.
Number of Active Women Borrowers to total Active Borrowers
It indicates percentage of women borrower to total active borrowers.
Number of Loans Outstanding
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
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
It is the number of women savers with voluntary demand deposit and time deposit accounts.
Offices
The total number of staffed points of service (POS) and administrative sites (including head office) used to deliver
or support the delivery of financial services to microfinance clients.
Operating Expense
It is total of Personnel Expense and Administrative Expense.
It is the number of depositors maintaining voluntary demand deposit and time deposit accounts with an MFP.
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Annexures
Operational Self-Sufficiency
Formula:
Financial Revenue
(Financial Expense + Net Loan Loss Provision Expense + Operating Expense)
Per Capita Income
It is average income per person.
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 full-time employee.
Personnel Allocation Ratio
The higher the indicator the more lean the head office structure of the organization. This indictor is used to measure organizational efficiency.
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.
Savers per Staff
Formula:
Number of Savers
Number of Personnel
Loan Loss Provision Expense
It is the sum of loan loss provision expense and recovery on loan loss provision.
Loans per Loan Officer
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Formula:
PAR > 30 Days
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:
Total Assets – Total Liabilities
Total Liabilities
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 non-interest bearing liabilities of an MFP.
Total Number of Loan Officers
The number of staff members who dedicate the majority of their time to direct client contact. Front office staff
include more than those typically qualified as credit or loan officers. They may also include tellers, personnel who
open and maintain accounts—such as savings accounts—for clients, delinquent loan recovery officers, and others
whose primary responsibilities bring them in direct contact with microfinance clients.
Loan Written Off during Year
It is the value of loans written off during the year.
Write-Off Rate
Formula:
Loans written off during the year
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
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)
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FINANCIAL SERVICES FOR ALL
Pakistan Microfinance Network
Third Floor, Plot No. 12-3/2, Mandir Square, G-8/1 Markaz, Islamabad
Tel: +92 51 2266214-17, Fax: +92 51 2266218
www.pmn.org.pk