PACRA Maintains the rating of Parwaaz Financial Services Limited |PPTFC| PKR 1bln | March 25

Parwaaz Financial Services Limited (PFSL or “the Company”) has issued its first Privately Placed, Term Finance Certificate (TFC) amounting to PKR 1.0 billion, structured as a Green Bond, marking a strategic financing milestone for the Company. The rating of the Green Bond is supported by defined security structure, comprising (a) a registered hypothecation charge over existing and future book debts, receivables, loans, and advances of PFSL with a 25% margin, and (b) an exclusive lien over a Debt Service Reserve Account (DSRA) maintained by Karandaaz Pakistan Limited (KRN) at an AA-rated financial institution, equivalent to one quarter’s peak profit instalment amount, maintained throughout the tenor of the issue, with lien and right of set-off in favor of the Investment Agent. PFSL is a non-banking financial institution and a wholly owned subsidiary of Karandaaz Pakistan Limited (KRN). The Company is primarily engaged in addressing the credit requirements of Small and Medium Enterprises (SMEs), as defined by the International Finance Corporation (IFC). PFSL’s operations are governed by a clearly articulated governance structure, supported by a professional management team and a comprehensive risk management framework encompassing defined procedures for risk identification, assessment, and mitigation, which form the backbone of the Company’s credit operations. As of 9MCY25, PFSL maintained an asset base of approximately PKR 5.0 billion (CY24: ~PKR 3.5 billion), reflecting steady expansion of its SME financing portfolio. A key development during the period is the issuance of PFSL’s inaugural Green Bond. The proceeds from the instrument are set aside exclusively for eligible sustainability-focused projects, including renewable energy, energy efficiency, clean transportation, sustainable agriculture, and pollution prevention & control. To support the issuance, PFSL has developed a Green Bond Framework aligned with the SECP Green Bond Guidelines and the ICMA Green Bond Principles, which has been independently reviewed and certified by PET Nature (Pvt.) Ltd., providing third-party validation. The Company has also constituted a Green Bond Committee to oversee project selection, fund allocation, and ongoing monitoring in line with PFSL’s Environmental and Social Governance (ESG) Policy. Transparency and accountability remain central to the initiative, with PFSL committing to periodic disclosure of allocation and impact-related key performance indicators and engaging an independent auditor to conduct regular reviews of fund utilization.
The rating is contingent upon PFSL’s ability to consistently execute its strategic objectives while maintaining prudent asset quality and adherence to regulatory requirements and internal risk management frameworks. Continued compliance with SECP guidelines, along with periodic external audit reviews, remains a key consideration.

About the Entity
PFSL was incorporated in 2020 under the Companies Act, 2017. The Company operates as a Non-Banking Finance Company (NBFC) and is licensed to provide investment finance services.

About the Instrument
The Green Bond is a privately placed Term Finance Certificate, structured as a floating-rate instrument carrying a profit rate of 3-month KIBOR plus 1.0%, payable quarterly in arrears. Principal amortization, along with markup, is scheduled in four equal quarterly installments during the final year of the tenor.