PACRA Upgrades Entity Ratings of AGAHE Pakistan

The assigned rating emanates from the adequate profile of the Agahe Pakistan (“the MFI”) in the Microfinance sector of Pakistan. Agahe Pakistan operates as a not-for-profit organization and under the regulatory purview of the SECP under Section 42 of the Companies Act, 2017. Agahe Pakistan primarily focuses on empowering women and youth by enhancing their economic standard through access to business loans. The MFI is expanding its footprint in the Punjab region to induce growth and manage NPLs optimally. Currently has MFI has strong presence in Punjab Province with a network of 44 branches. Through these branches, the MFI continues to drive financial inclusion and economic empowerment across the region. The Gross loan portfolio (GLP) includes diversified products across segments such as General Business, Livestock, Micro-Enterprise, Renewable Energy, Auto, Educational, Islamic Financing and House Loans. The MFI has diverse borrowing avenues, including the PMIC, SBP, NBP, HBL, BOP, and JSBL, which strengthens its funding base. Previously, Pakistan’s economy navigated significant macroeconomic headwinds. However, the improvement has been observed during the first half of FY25 marked by a gradual easing of policy rates and a sizeable reduction in inflation. These positive economic indicators are expected to provide crucial support to various sectors, including Microfinance. According to management accounts, the MFI's GLP demonstrated consistent growth, reaching ~PKR2.3bln as of ~9MFY25, compared to ~PKR1.9bln in FY24. The MFI posted a net profit of ~PKR 174mln. Net profitability increased to ~PKR174mln in 9MFY25 from ~PKR145mln in FY24. Additionally, the sustained year-on-year growth in GLP, coupled with the ability to maintain a low infection ratio of ~1.3%, highlights improvements in both qualitative and quantitative performance indicators. The MFI’s board comprises reputable, well-educated individuals with diverse experience, actively guiding strategic decisions and ensuring the MFI’s direction aligns with corporate governance best practices. The MFI benefits from a stable, experienced senior management team, supported by clear reporting lines, a formalized organogram, and effective monitoring processes. Integration with the head office enables real-time tracking of recoveries and disbursements, while technological advancements have strengthened the control environment. The rating upgrade reflects the Company’s key operational improvements, including the digitalization of processes, the implementation of advanced MIS, and the development of a borrower risk rating score model. Additionally, the sustained year-on-year growth in GLP, coupled with the ability to maintain a low infection ratio of ~1%, highlights improvements in both qualitative and quantitative performance indicators. Moreover, the strategic direction and vision provided by AGAHE Pakistan’s Board, comprising experienced and highly qualified professionals, continue to play a pivotal role in driving the Company’s sustainable growth and development.
The sustainability of positive performance amid growing business volumes is a key factor in the Company’s rating. Future rating action will be contingent upon a thorough evaluation of strategic deliverables and their outcomes. In this context, the Company’s ongoing expansion, coupled with the integration of technological advancements, will be closely monitored to assess their impact on operational efficiency and risk management effectiveness.

About the Entity
AGAHE Pakistan, incorporated in 2016 as a Public Company Limited by Guarantee under Section 42 of the Companies Ordinance, 1984 (now Companies Act, 2017), is licensed by SECP under the NBFC Rules, 2003. The Institution is governed by a 7-member Board of Directors chaired by Mr. Abid Aman Barki, with Mr. Barak Ullah serving as CEO, overseeing a professional team.