PACRA maintains instrument rating of FINCA Microfinance Bank Ltd

November 7, 2018 (MLN):  Pakistan Credit rating Agency (PACRA) has maintained instrument ratings of FINCA Microfinance Bank Limited at ‘A’ for long term, with a ‘stable’ outlook forecast.

According to the rating agency, the ratings reflect association of the bank with a global microfinance organization – FINCA International. This affiliation supports FINCA Microfinance Bank in terms of building a wholesome strategy and also in establishing robust systems and controls.

The bank intends to build a stable and diverse deposit base. However, given that the current deposit landscape is very competitive, building a granular (as well as low cost) deposit base is challenging.

To achieve the stated objective the bank optimizes on increasing its branchless banking (BB) business. The bank is eyeing tier II capital in the form of subordinated loan to strengthen its capital base.

FINCA's paramount focus remains on digitizing its operations and strengthening its technological infrastructure to expand its outreach. In this regard, the bank is upgrading its MIS and developing variant digital products to serve diversified market segments, including corporates.

The ratings are dependent upon the bank's ability to sustain its profitability while building up market position. Successful establishment of foothold in digital banking remains critical amidst stiff competition.

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