Press Release

JCR-VIS Places Ratings of Microfinance Sector under Rating Watch Developing Status

Karachi, September 6, 2010: In the wake of recent floods, JCR-VIS Credit Rating Company Limited (JCR-VIS) has placed ratings outstanding in the microfinance sector under ‘Rating Watch – Developing’ status.

JCR-VIS expects asset quality deterioration to be more severe in case of banks with greater exposure to the rural economy, whether by means of agriculture or livestock loans or other means of working capital finance. At end March 2010, agricultural financing alone comprised almost 36% of advances of microfinance banks. In addition to the more perceptible effects of flood, there may be rising economic challenges, affecting even those micro-finance operators which are present in the urban markets.

Depending on the severity of impact of floods on the risk profile of each MFI, JCR-VIS will be reviewing the outstanding ratings in the sector on a case-by-case basis. Any support in the form of grants or soft loans, where available, will also be built into ratings.

For further information on this rating announcement, please contact Ms. Sabeen Saleem (sabeen@jcrvis.com.pk) or Ms. Sobia Maqbool (sobia@jcrvis.com.pk) at 021-35311861-70 or fax to 021-35311873.

Javed Callea
Advisor

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 2010 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .