PACRA Maintains the Rating of Kashf Foundation | PPTFC PKR 2.483bln | Dec-23

Kashf Foundation issued a Rated, Secured, Privately Placed, Listed Term Finance Certificate (“TFC”) amounting PKR 2.483bln to expand the micro-infrastructure finance, which started lending to the microfinance clients from Dec-23. TFC is the first gender bond being issued in Pakistan and MENA regions. The assigned rating emanates from the prominent profile of the Kashf Foundation (or the "Company") in the Microfinance sector of Pakistan. The Company facilitates access to business loans, empowering women to achieve economic independence. The rating of TFC is also supported by its strong security structure, i.e. (a) the TFC is fully principal guaranteed by Infrazamin Pakistan Limited (IZP), (b) Exclusive lien on a debt service reserve account ('DSRA'), which holds an amount equivalent to two quarterly outstanding interest payments throughout the life of the TFC, on a rolling basis (c) Exclusive lien on a Debt Payment Account ('DPA'), which is funded 7 working days prior to the payment date. IZP “Guarantor” is an innovative, for-profit credit enhancement Guarantee Company, conceived and designed to issue guarantees for promoting private infrastructure projects. It leverages InfraCo Asia and GuarantCo’s infrastructure expertise in Pakistan alongside Karandaaz's local market insights and financial inclusion investment track record. During CY24, the MFIs and RSPs segment accounted for ~23.0% of the sector’s GLP. The infection ratio of this segment remained very low compared to MFBs clocking in at ~1.1% in FY25, an improvement from FY24 (~1.3%). MFIs maintain lower infection ratios than MFBs due to their smaller, community-driven lending models, cautious credit expansion and deeper borrowing engagement. These factors collectively foster stronger repayment discipline and reduce default risk. MFIs posted strong profitability of ~PKR 5.7bln in FY25 on the back of higher net interest income and sizeable growth in lending portfolio. The average loan size of MFIs increased to ~PKR 60,684, leading to increase in portfolio and relatively lower costs. During the 1HFY26, the GLP of Kashf Foundation improved and stood at ~PKR 42,526mln, with a growth of ~12.8% (FY25: ~PKR 37,714mln; FY24: ~PKR 29,475mln). The Kashf Foundation successfully grew its lending portfolio, added new customers, and expanded its outreach through new branches, all while maintaining caution regarding the infection ratio. Net Markup income from loans and investments stood at ~PKR 9,647mln (~14% YoY growth), with a surplus after tax of ~PKR 1,543mln.
Ratings are underpinned by the Company’s ability to maintain sound asset quality through prudent credit practices, alongside maintaining a strong liquidity and funding profile to support continued portfolio growth.

About the Entity
Kashf Foundation was incorporated in 1996 and registered with SECP in 2007 as a Public Company limited by guarantee. The overall control of the Foundation vests in seventeen members Board of Directors. Dr. Hafiz Ahmed Pasha is the Chairperson of the Board. Ms. Roshaneh Zafar is the founder and CEO of Kashf Foundation.

About the Instrument
Kashf Foundation issued a Rated, Secured, Privately Placed, Listed Term Finance Certificates (“TFC”) amounting PKR 2.483bln on December 08, 2023. The TFC has a tenor of 3 years and carries a profit rate of 3MK+1.5% p.a to be paid quarterly in arrears. The utilization of the loan proceeds is such that 70% of the proceeds have been utilized to issue micro-infrastructure loans directed towards the welfare of women and 30% to meet working capital requirements. As per client representation, the estimated amount is maintained in both DPA and DSRA accounts. As of December 08, 2025, a total of nine markup installments amounting to PKR 893mln have been paid. The most recent markup payment of PKR 48mln was made in December 2025. Principal repayments on the TFC commenced on March 8, 2025, and four installments have been paid as of December 2025.