ISLAMABAD, Dec 31: Pakistan Telecommunication Company Limited (PTCL) has signed an agreement for Rs4 billion Unsecured Subordinated Debt Facility (Tier 2 capital) with U Microfinance Bank (U Bank) as this capital addition will enable the bank to further capitalize on the growth opportunities possible in the country’s microfinance sector.
In the constantly changing competitive landscape, this Tier 2 facility will enable U Bank to expand its current customer reach for serving the under-served population, a message released here on Monday said.
“U Microfinance Bank plans to utilize these funds in its business operations and expansion plans. Serving its customers through disruptive innovation and digitization, the bank will focus on achieving its growth targets,” the message said.
It would not only enable the bank to utilize additional capital with flexibility as it grows, the debt amount would also contribute towards U Bank’s Supplementary Tier 2 Capital for Capital Adequacy Ratio (CAR) as per the guidelines for Microfinance banks that are set out by State Bank of Pakistan (SBP), it added.
Speaking on the occasion, President and Chief Executive Officer (CEO) of PTCL and Chairman of U Microfinance Bank Dr Daniel Ritz said, “Seeing the potential in U Microfinance Bank’s ability to further expand and grow, PTCL has taken the decision to further inject Tier 2 capital into the bank. This is in line with PTCL’s commitment to support Pakistan and its economy as a whole.”
Expressing his views, U Microfinance Bank’s President and CEO Kabeer Naqvi, said, “U Microfinance Bank has been successfully enabling underserved Pakistanis and has been positively contributing towards poverty alleviation and economic empowerment. This Tier 2 injection is a testament to our sponsor’s confidence in our ability to deliver positive results. It also reiterates PTCL’s commitment towards contributing to the economic uplift & enablement of Pakistan.”
Currently, U Microfinance Bank serves more than 850,000 customers, where 22 percent of the served customers were women whereas U Bank was a wholly owned subsidiary of PTCL. By the end of 2018, U Bank’s deposit portfolio grew from Rs 11.97 billion to Rs 19 billion, while the loan portfolio grew from Rs 10.6 billion to Rs 17 billion, the message added.
Most significantly, the number of employees increased from to 1,321 to 1,980, where 9% of the total work force comprises of women, it added.
PTCL and U Microfinance Bank are at the forefront of fighting poverty in Pakistan and will continue to play their role in improving the economic situation of the people of Pakistan, said the message issued.