Press Release
VIS Reaffirms Entity Ratings of NRSP Microfinance Bank Limited
Karachi, May 05, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of NRSP Microfinance Bank Limited (‘NRSP Mfb’ or the ‘Bank’) at 'A-/A2' (Single A Minus/A Two). Medium to long term rating of 'A-' indicates good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of 'A2' indicates good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings remains ‘Stable.’ Previous rating action was announced on May 06, 2024.
NRSP Mfb was incorporated in Pakistan on October 22, 2008, as a public limited company under the Companies Ordinance, 1984. It obtained a nationwide microfinance banking license from the State Bank of Pakistan (SBP) on February 18, 2009, under the Microfinance Institutions Ordinance, 2001. The Bank commenced operations in March 2011, following the issuance of certificate of commencement of business by the Securities and Exchange Commission of Pakistan (SECP) and SBP.
NRSP Mfb’s entity ratings are supported by an experienced management team and strong institutional sponsors. The Bank has demonstrated significant turnaround in asset quality indicators, with provisioning coverage strengthening under the IFRS-9 framework. Portfolio realignment towards secured lending, enhanced credit risk controls, and a more disciplined recovery framework have contributed to improving asset risk profile. Liquidity buffers have been significantly strengthened following the mobilization of incremental deposits and borrowings, channeled into high-quality liquid assets, thereby providing resilience against funding shocks. Profitability trends show a gradual recovery, supported by higher operational self-sufficiency and targeted cost control measures, although spreads remain under pressure. Capitalization levels have improved, albeit remaining below the regulatory minimum, with planned capital injections expected to support compliance over the medium term.
Nonetheless, the Bank remains exposed to risks associated with the timely execution of its strategic initiatives, particularly in achieving planned capital augmentation and sustaining asset quality in a challenging operating environment. Successful execution of the growth strategy, diversification of funding sources, and maintenance of prudent underwriting standards remain important rating considerations.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Micro-Finance Banks
https://docs.vis.com.pk/docs/MicroFinance-Oct-2023.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf