Press Release
Date: 17-Mar-23
PACRA Assigns Initial Social Impact & Performance Rating to ASA Microfinance Bank (Pakistan) Limited (Formerly ASA Pakistan Limited)

Rating Details Rating Type Social Impact and Performance Rating
Dissemination Date Current (17-Mar-23 )
Action Initial
Rating SIP2
Outlook Stable
Rating Watch -

Rating Rationale Factor Comment
Ownership/Members ASA International Holding owns 99.99% of the ownership stake. The ASAI group has diversified global presence having branches in 13 countries currently.
Governance There are 6 directors on the board. The board structure of ASA-MFB is considered strong with 3 independent and 3 non-executive directors.
Management A well-defined organizational structure is present with an experienced management team to run operations smoothly. The technological infrastructure may be improved to automate the loan disbursement an
Social Impact The Company undertakes CSR activities throughout the year, while two senior management committees focused on social impact are present. The vision statement clearly defines the target market. It may l
Business Sustainability The Company is on a rapid YoY growth trajectory, the GLP has increased from ~PKR 10bln at end-Dec'20 to ~PKR 17bln at end-Sep'22. Despite the rapid growth, the expenses are contained with a healthy OS
Financial Sustainability The PAR30 ratio improved sharply after the COVID-19; however, the Company look towards improving its risk coverage ratio.

Key Rating Drivers ASA Microfinance Bank (Pakistan) Limited (or the 'Company') received MFB license but will start operating as MFB after approval of COB from SBP. The Company was formed with a primary focus on women's empowerment, stemming from the ASAI group's focus on female entrepreneurs and the financial wellness of the rural population. The Company's focus on its mission is evident through having ~96% female borrowers at end-Sep 22. The management presents a client grievance summary to the board on a quarterly basis and has a well-structured program to provide financial literacy training to its customers. It is in the process of conversion to a microfinance bank, and the mobilization of deposits may decrease its reliance on foreign and local funding, improving its sustainability. Going forward, commitment to social objectives and action on the same will be important for the rating. Moreover, the rationalization of planned business strategies would be critical.

About the Entity
Legal Structure Public Limited
Year of Establishment 11-Nov-11
Type of License
Majority Ownership

Regulatory Disclosures Analyst Applicable Criteria Related Research
Afnan Iqbal

Methodology | Social Impact and Performance Rating | Sep-22

Sector Study | Microfinance | Sep-22

Disclaimer This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA. The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.