Press Release

JCR-VIS Assigns Initial Entity Ratings to Advans Pakistan Microfinance Bank Limited

Karachi, April 25, 2014: JCR-VIS Credit Rating Company Limited has assigned initial entity ratings of ‘BBB+/A-3’ (Triple B Plus /A-Three) to Advans Pakistan Microfinance Bank Limited (APM). Outlook on the assigned rating is ‘Stable’.

APM is a startup bank having been set up by Advans S.A.SICAR (Advans SA), a social venture capital investment company and the Netherlands Development Finance Company (FMO), a Foreign Development Financial Institution (DFI), having 70% and 30% shareholding, respectively. The group has presence in eight countries with investments in microfinance institutions across the Asian and African regions. Advans SA, the sponsor, is backed by various DFIs including the European Investment Bank having 21% stake.

The bank has technical assistance support from the Advans group that is designed to build institutional capacity including training and system development. APM has implemented the core lending methodology while an adequate policy framework is also in place. However, there are certain gaps in the organizational structure with several departments yet to be fully established at the head office level. The integrated ERP system is installed and operational across the bank. Some key senior management positions are held by foreign consultants having international experience in the microfinance sector; these would be replaced with local resources over time.

APM has a provincial level license and is operating in Sindh. Since the launch of operations in January 2013, three branches and one permanent booth have been opened in Karachi. APM offers individual micro-loans using a cash flow-based credit methodology as well as basic deposit products. There have been some delays in launch of full scale operations in the backdrop of staff related challenges at branch level. As a result, the pace of lending activities remained constrained during 2013.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-72 or fax to 35311873.

Jamal Abbas Zaidi
Deputy CEO

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright April 25, 2014 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.