Press Release

JCR-VIS Assigns Initial Entity Ratings to ASA Pakistan Limited

Karachi, June 23, 2017: JCR-VIS Credit Rating Company Limited has assigned initial entity ratings of ‘BBB+/A-3’ (Triple B Plus /A-Three) to ASA Pakistan Limited (ASA Pakistan). Outlook on the assigned ratings is ‘Stable’.

Incorporated in 2008, ASA Pakistan operates as a microfinance company and is a wholly owned subsidiary of ASA International Holding (ASAI). The group has presence in twelve countries with investments in microfinance institutions across the Asian and African regions. ASAI, the sponsor, is backed by Catalyst Microfinance Investors (CMI), a microfinance investment company incorporated in Mauritius. The company receives ongoing technical assistance support from the group that is designed to build institutional capacity including training and system development. ASA Pakistan has implemented the core lending methodology deployed at various institutions of the group.

The company applied for a microfinance bank license in 2016; regulator’s approval of the same is under process. The transition entails revision of policy framework, organizational and operational infrastructure. The organizational structure would need to be realigned with the stringent regulatory framework required for MFBs. Overall governance infrastructure is considered sound with presence of seasoned professionals on board.

Assigned ratings take into account the company’s sound capitalization levels along with funding support from the parent. Financial performance of the company marked a notable growth in loan portfolio coupled with healthy asset quality and profitability. Liquidity indicators of the company show room for improvement. Going forward, ratings of the company would be underpinned by successful transformation into a bank, good quality of credit portfolio, development of strong credit risk assessment and internal control systems.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at 35311861-70 or fax to 35311872-3.

Javed Callea
Advisor

Applicable Rating Criteria: Microfinance Banks (June 2016)
http://www.jcrvis.com.pk/docs/Meth-MFBs201606.pdf

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