Press Release

JCR-VIS reaffirms ratings of Kashf Microfinance Bank Limited

Karachi, April 30, 2010: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the medium to long-term entity rating at ‘BBB’ (Triple B) and short-term rating at ‘A-3’ (Single A-Three) with ‘Stable’ outlook for Kashf Microfinance Bank Limited (KMBL).

KMBL is the latest entrant in the microfinance banking sector and was established by the support of a diverse group of investors. It acquired an active portfolio from one of its associate concerns, although subsequent growth in lending operations has been unremarkable. The bank has incurred losses in its initial years of operations. While losses in these years were expected, these have substantially reduced equity. There have been continuing negotiations with potential investors to raise capital through common equity. The successful completion of these negotiations followed by an equity injection would remain critical in meeting the mandatory minimum capital requirement and will be tracked over the next one quarter.

Mobilizing competitive sources of funding will be key to financing future growth, as planned. Meanwhile the bank has been able to negotiate credit lines to finance its projected business growth, although given the fact that the bank is a relatively new entrant, a broad based deposit base is yet to be cultivated. KMBL has remained focused on the development of strong internal controls and procedures. The implementation of state-of-the-art core banking system along with the setting up of an independent internal audit and risk management function is likely to strengthen banking operations. Moreover, relevant manuals and Standard Operating Procedures (SOPs) have been prepared and duly approved by the board.

For further information on this rating announcement, please contact Ms. Sabeen Saleem (sabeen@jcrvis.com.pk) or Mr. Maimoon Rasheed (maimoon@jcrvis.com.pk) at 021-35311861 and 042-6610681-84 or fax to 021-35311873.



Safdar Kazi
Director

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 .