March 28, 2019 (MLN): VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings assigned to The First MicroFinanceBank Limited (FMFB) at ‘A+/A-1’. Outlook on the assigned rating is ‘Stable’.
The medium to long-term rating of ‘A+’ denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-1’ denotes high certainty of timely payment, liquidity factors are excellent and supported by good fundamental protection factors.
The assigned ratings take into account strong ownership profile as shareholding of the bank is vested with Habib Bank Limited, the largest commercial bank in Pakistan, Aga Khan Development Network and other international financial institutions.
The ratings draw comfort from positive dynamics of microfinance sector and constructive regulatory environment. The ratings also factor in sustained growth in microcredit portfolio, emanating from expanding geographic penetration and increasing average loan size.
The ratings also take into account enhanced resource allocation to digitalization efforts and strengthening of core functions and control environment. Maintenance of asset quality and leverage profile and arrest of declining trend in liquidity indicators are important rating parameters.
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