PMIC provides Rs 800 million Tier 2 facility to FINCA Microfinance Bank Pakistan

Pakistan Microfinance Investment Company Limited (PMIC) is a wholesale finance entity and an important pillar of National Financial Inclusion Strategy of Pakistan. It focuses on promoting poverty alleviation initiatives through Microfinance organisations and improving employment and livelihood opportunities for marginalized segments in the country especially women and youth. Since its inception in December 2016, PMIC has reached out to more than 800,000 households across the country, supported more than 777,000 jobs with a loan portfolio of Rs 22 billion with 85 percent women borrowers whilst 61 percent of the portfolio is deployed in rural areas.

Furthering its mission to enhance financial inclusion in the country, PMIC has initiated transactions under Subordinated/Tier II capital products for microfinance banks. The sector regulator- Securities and Exchange Commission of Pakistan (SECP) has played a vital role towards successful closure of these transactions which further reiterates SECP's support and commitment towards financial inclusion and growth of the sector. PMIC has provided FINCA Microfinance Bank Pakistan with an 8-year, Rs 800 million Tier II/subordinated bilateral loan facility.

The facility marks the maiden Tier 2 transaction by PMIC and will be used by FINCA Pakistan to support its balance sheet expansion, compliance with the Capital Adequacy Ratio (CAR) requirement prescribed by the State Bank of Pakistan for Microfinance Banks and meet financing requirements of over 240,000 borrowers across Pakistan. Most of these loans will be targeted towards individuals running micro, small and medium-sized enterprises.

Naved A Khan, Chairman of PMIC stated "PMIC will contribute towards the microfinance sector and financial inclusion agenda of the government and support the initiatives towards agriculture, renewable energy, low cost private schools to achieve SDGs for the country."

Speaking on the occasion, PMIC CEO Yasir Ashfaq said, "PMIC is dedicated to promoting financial inclusion across Pakistan. In this regard PMIC has developed and offers a diverse range of financial products to Microfinance Banks and Microfinance Institutions. Successful closure of the facility is amongst one of many innovative initiatives undertaken by PMIC to improve the capitalization and support further growth of the sector".

Zarlasht Wardak, Chair of FINCA Pakistan board, congratulated both institutions on this landmark transaction. "Pakistan is full of opportunities for microfinance sector and we are very happy that this facility will allow us to further our mission of financial inclusion and improving access to finance for underserved segments of the society," she said.

Farid Ahmed Khan, Acting CEO FINCA Microfinance Bank said "We are excited to enter this new partnership with PMIC. This loan facility will enable us to expand our product offering across the country while continuing to help the people of Pakistan build assets, create jobs and improve their standard of living."-PR