Press Release
VIS Reaffirms Entity Ratings of NRSP Microfinance Bank Limited
Karachi, May 5, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of NRSP Microfinance Bank Limited (‘NRSPMFB” or the ‘MFB’) 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 05, 2026.
The assigned rating to NRSPMFB draws support from an experienced management team and strong institutional sponsors, notably the National Rural Support Programme (NRSP). During CY25, the parent organization injected equity of PKR 2.0bn, resulting in an increase in the Bank’s equity base and supporting improvement in its Capital Adequacy Ratio to above the regulatory minimum. However, full recognition of the additional ECL allowance highlighted in the auditor’s emphasis of matter, which was deferred by the MFB with SBP’s approval, would have resulted in the MFB’s CAR falling below the minimum regulatory requirement. The MFB’s liquidity profile is marked by adequate liquid asset buffers, while profitability indicators improved, despite enhanced operating and provisioning expenses.
The MFB has also realigned its portfolio toward secured lending, with a notable rise in the share of collateralized exposures, primarily gold-backed loans, which is expected to support risk mitigation over the medium term. However, reported asset quality indicators weakened during the review period, with increased volumes of credit assets classified as Stage-3 loans, leading to a decline in provisioning coverage levels. The MFB has indicated phased recognition of expected credit loss against stage 3 assets. Going forward, the MFB’s strategy focuses on expanding its secured lending portfolio, particularly gold-backed financing, introducing new secured products including solar and supply-chain financing solutions, and expanding its branch network from the existing footprint toward planned growth over the medium term. Successful execution of these initiatives, absorption of stage-3 asset losses over the next five quarters, along with sustained capital strengthening and effective management of asset quality pressures going forward, will remain important considerations for the MFB’s credit profile.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.