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) of PKR 1.0 billion, structured as a Green Bond, marking a strategic financing milestone for the Company. The rating is underpinned by a defined security structure comprising: (a) a registered hypothecation charge over PFSL's existing and future book debts, receivables, loans, and advances, subject to 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, sustained throughout the tenor of the instrument, with lien and right of set-off vested in the Investment Agent. PFSL is a non-banking financial institution and a wholly owned subsidiary of KRN, primarily engaged in addressing the credit needs of Small and Medium Enterprises (SMEs) as defined by the International Finance Corporation (IFC). The Company operates under a clearly articulated governance framework, supported by a professional management team and a robust risk management architecture encompassing defined procedures for risk identification, assessment, and mitigation, forming the backbone of its credit operations. As of 3MCY26, PFSL's gross loan portfolio stood at PKR 3.5 billion (CY25: ~PKR 4.1 billion), reflecting a contraction in its SME financing portfolio. PFSL's Green Bond continues to support the financing of eligible sustainability-focused projects, including renewable energy, energy efficiency, clean transportation, sustainable agriculture, and pollution prevention and control. The instrument has broadened the Company's funding mix while reinforcing its commitment to sustainable finance and strengthening its position within Pakistan's emerging green financing landscape. In support of the issuance, PFSL has developed a Green Bond Framework aligned with the SECP Green Bond Guidelines and the ICMA Green Bond Principles, independently reviewed and certified by PET Nature (Pvt.) Ltd., providing third-party validation of the Framework's integrity. The Company has further constituted a Green Bond Committee to oversee project selection, fund allocation, and ongoing monitoring in accordance with PFSL's Environmental, Social, and 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 for 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.