Press Release
VIS Upgrades Entity Ratings of Halan Microfinance Bank Limited (formerly Advans Pakistan Microfinance Bank Limited)
Karachi, April 30, 2026: VIS Credit Rating Company Limited (VIS) has upgraded entity ratings of Halan Microfinance Bank Limited (‘Halan’ or the ‘Bank’) from 'BBB/A3' (Triple B/A Three) to 'BBB+/A3' (Triple B Plus/A Three). Medium to long term rating of 'BBB+' indicates adequate credit quality; protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur in the economy. Short term rating of 'A3' indicates fair likelihood of timely repayment of short-term debt obligations with satisfactory liquidity factors. Outlook on the assigned ratings has been revised to ‘Stable.’ Previous rating action was announced on April 30, 2025.
Halan (formerly Advans Pakistan Microfinance Bank Limited) was established in Pakistan on April 17, 2012. The Bank previously operated as a subsidiary of Advans S.A. Sicar, Luxembourg, which held 99.99% of the Bank’s share capital. Following the share sale agreement signed on August 04, 2023, MNT-Halan Pak B.V. acquired the entire shareholding of the Bank on March 20, 2024, after obtaining SBP approval, resulting in a complete change in sponsor ownership and strategic direction. The Bank has achieved a major milestone through the successful acquisition of a nationwide microfinance banking license, transitioning from its earlier regional footprint to a pan-Pakistan operating model. Consequently, Halan’s network expanded materially to 49 branches and 68 service centres (Dec’24: 24 branches and no service centres).
The assigned ratings reflect Halan Microfinance Bank Limited’s evolving business profile following the transition towards a nationwide operating model. The Bank has demonstrated strong growth momentum, supported by aggressive branch expansion, increasing outreach, and rising customer base, underpinned by strategic backing from its foreign parent with expertise in digital financial services and microfinance. The strengthening of digital infrastructure, ongoing product diversification, and planned rollout of mobile banking solutions are expected to enhance operational efficiency and customer penetration over the medium term. Asset quality indicators have shown notable improvement with rapid portfolio growth, reflecting prudent underwriting and recovery efforts; however, the portfolio remains largely unsecured, which continues to pose inherent credit risk. As per Management, this risk is being addressed through the bank’s geographic expansion and the introduction of various new products. Additionally, there has been a gradual shift in the loan mix contributing to improved risk diversification. Profitability remains under pressure due to elevated operating expenses associated with expansion and infrastructure investments, resulting in sustained losses, though management expects gradual improvement as newer branches mature. The funding profile has strengthened with significant deposit mobilization, albeit with some concentration risk and cost sensitivities evident. Liquidity remains adequate. Capitalization has been supported by fresh equity injection, providing a buffer for growth, with another injection in the pipeline to materialize before the end of the second quarter in 2026. The ratings also incorporate challenges within the microfinance sector, including competitive pressures and sensitivity to macroeconomic conditions. The ratings remain sensitive to the Bank’s ability to achieve sustainable profitability by year end, maintain asset quality through secured products amid rapid expansion, and preserve capital adequacy while improving funding concentration risk.
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/Methodologies-2025/MicroFinance-Nov-2025.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf