PACRA Maintains Entity Rating of ASA Microfinance Bank (Pakistan) Limited

ASA Microfinance Bank (Pakistan) Limited ('ASA-MFB’ or the 'Company') is a public unlisted company and is owned by ASA International (ASAI) Holding with an ownership stake of ~99.99%. ASA International is associated with ASA Group PLC which is listed in London Stock Exchange, and stands as one of the world's leading international microfinance institutions operating in 13 countries across Asia and Africa. ASA-MFB is regulated under the Microfinance Institutions Ordinance, 2001, and received SBP’s approval for initiating microfinance banking operations on November 13, 2023. Since then, the Bank has made notable strides towards operational readiness, including the upgrade of its Core Banking System, and is well-positioned for SBP’s final approval for shariah compliant deposit and later on full conversion of the Bank into Islamic. The Bank benefits from a well-structured governance framework supported by an experienced management team. Operational execution is further decorated by enhancements in backend systems and loan scrutiny mechanisms. ASA-MFB’s customer-centric lending model, which hinges on relationship-driven microfinance, continues to deliver growth and sound asset quality. The Bank reported advances of PKR ~24.8bln as of Dec'24 (Dec'23: PKR ~19.2bln), translating into a YoY growth of ~29%, and securing a ~3.7% market share in gross loan portfolio among microfinance banks and institutions, with 662,258 number of borrowers at the end-Dec'24. On the financial front, topline revenue increased to PKR ~12.5bln (CY23: PKR ~9.6bln), with PAT rising to PKR ~3.2bln (CY23: PKR ~2.5bln), underlining operational efficiency and cost controls. The Bank's equity base stood at PKR ~10.2bln, while its Capital Adequacy Ratio (CAR) remained strong at ~30%, well above the regulatory requirement. The Bank’s financial performance is underpinned by a diversified loan book, a strong capital position, and technological enhancements, reflecting its preparedness to scale operations and introduce deposit products in the near term.
The assigned rating is contingent upon the Company’s capacity to effectively mitigate emerging risks under the prevailing circumstances to preserve its business and financial risk profile. At the same time, the Company's ability to safeguard its performance indicators in a challenging business environment is crucial.

About the Entity
ASA Microfinance Bank (Pakistan) Limited is a for-profit, Microfinance Bank, incorporated in 2008 under section 42 of the company’s ordinance, 1984. The Company received its MFB license for lending operations; however, after the recent implementation of Core Banking System and SBP's approval, ASA-MFB plans to proceed with mobilizing shariah compliant deposit and later on full conversion of the Bank into Islamic. The Company’s Board of Directors comprises seven members, which include two independent and five non-executive directors. Mr. Saeed Uddin Khan is the CEO of ASA-MFB and has over three decades of diversified and senior management experience in different banks and financial institutions.