Parwaaz Financial Services Ltd (“PFSL” or “the Company” was incorporated on December 23rd, 2020 under the Companies Act 2017. The company obtained the license to carry out Investment Finance Services as a NonBanking Finance Company under the Non-Banking Finance Companies (Establishment and Regulation) Rules 2003 (NBFC Rules) and Non-Banking Finance Companies and Notied Entities Regulations, 2008 (the NBFC Regulations) on June 22nd, 2021.

Parwaaz Financial Services Limited (PFSL) was established by Karandaaz Pakistan, a not-for-profit company sponsored by international development partners, including the Bill & Melinda Gates Foundation and the UK’s Foreign, Commonwealth & Development Office (FCDO). PFSL operates as a non-banking financial company (NBFC), with a primary mandate to provide tailored financing solutions to Small and Medium Enterprises (SMEs), a segment considered important to Pakistan’s economic development. The Company leverages a proprietary digital lending platform to facilitate timely, accessible, and user-friendly financial services, supporting greater operational efficiency and expanding access to financing across its target market.

Parwaaz Financial Services Limited (PFSL) commenced operations in 2022 as a licensed NBFC with a mandate to extend both short-term and long-term financing to the SME sector. The company’s lending activities are diversified across multiple segments, agriculture value chain, manufacturing, healthcare, education, and renewable energy, reflecting management’s strategy to balance growth opportunities with sectoral risk exposure. In addition to its proprietary portfolio, PFSL acts as an agent for Karandaaz Pakistan, originating and managing SME financing programs on behalf of its parent organization, which enhances business volumes while limiting direct credit risk on certain exposures. As of June 30, 2026, the company reported a Gross Loan Portfolio (GLP) of PKR 3,487 million, serving ~300 active borrowers. Portfolio build-up remains in an early growth phase, with the company seeking to expand its footprint through targeted sector initiatives. PFSL has also introduced thematic funding avenues, most notably the Green Action Bond, to channel investments into environmentally focused projects, supporting the institution’s sustainability agenda and diversifying its funding profile.

Parwaaz Financial Services Limited (PFSL) is a wholly owned subsidiary of Karandaaz Pakistan Limited, which holds 99.99% of the company’s shareholding, with the remaining nominal stake held by individual shareholders. Karandaaz Pakistan is a not-for-profit company sponsored by leading international development partners, including the Bill & Melinda Gates Foundation and the UK Foreign, Commonwealth & Development Office (FCDO).

The Company’s ownership profile remains stable, with Karandaaz Pakistan Limited maintaining a 99.99% controlling stake. No significant changes in the ownership structure are anticipated in the foreseeable future. The parent entity’s long-term commitment provides continuity in strategic direction and supports PFSL’s governance framework, while also providing potential access to sponsor support, if required.

The sponsoring entity, Karandaaz Pakistan Limited, has over a decade of experience in Pakistan’s financial services and development finance landscape, with a longstanding focus on SME financing and investments across multiple sectors. This experience provides Karandaaz with relevant sector knowledge and supports PFSL through strategic guidance and institutional expertise. The sponsor’s exposure to SME and financial sector development also provides PFSL with access to established practices in risk management and operational execution, supporting the Company’s efforts to expand its lending portfolio while maintaining disciplined credit standards.

Parwaaz Financial Services Limited (PFSL) benefits from the strong financial profile of its parent, Karandaaz Pakistan Limited, a not-for-profit development finance company sponsored by the Bill & Melinda Gates Foundation (BMGF) and the UK Foreign, Commonwealth & Development Office (FCDO). Karandaaz reported an asset base of approximately PKR 49.5 billion as of June 2025 with no external leverage, reflecting substantial balance-sheet strength and prudent financial management. The backing of these globally recognized institutions provides PFSL with enhanced capital access, credibility, and stakeholder confidence, supporting its ability to pursue sustainable growth and maintain a strong financial position.

Parwaaz Financial Services Limited is overseen by a seven-member Board of Directors comprising two independent directors (including the Chairperson), three nominee directors representing the parent company, and one executive director (the Chief Executive Officer). The board brings together extensive expertise in banking, corporate finance, development finance, digital transformation, and public policy, ensuring a well-rounded governance framework. Members include seasoned professionals with decades of leadership experience at leading local and international financial institutions, as well as specialists in regulatory compliance, ESG, and digital financial inclusion. This mix of independent and sponsor representation supports balanced decision-making, strategic oversight, and adherence to regulatory requirements, providing a strong foundation for prudent risk management and sustainable growth.

The Board of Directors comprises seasoned professionals with diverse experience across banking, finance, development, governance, and digital transformation. Mr. Shehzad Naqvi, Chairperson and Independent Director, brings over three decades of experience in global and emerging markets, including senior roles at Citigroup, ABN AMRO, and Royal Bank of Scotland, with expertise in credit, corporate, and investment banking. Mr. Javed Iqbal, Chief Executive Officer, has 31 years of banking experience spanning investment, corporate, commercial, and SME banking, with prior senior roles at Faysal Bank, United Bank, Standard Chartered, and Bank Alfalah. The Board is further supported by Mr. Yameen Kerai, who brings extensive experience in corporate finance and strategic management; Mr. Sohail Wajid, with over 27 years of experience in in economic development, financial inclusion, climate finance, and governance reform across Pakistan, South Sudan, and Zambia.; and Ms. Shumaila Rifaqat, who contributes expertise in governance, public policy, and economic reform through her experience with DFID, the World Bank, and the Asian Development Bank. Mr. Sharjeel Murtaza adds expertise in digitalization, transformation, and financial inclusion through his role as Chief Digital Officer at Karandaaz Pakistan. Overall, the Board brings a diverse mix of financial, strategic, governance, and digital expertise, supporting PFSL’s strategic direction and risk management framework.

The Board of Directors has established four key committees: the Human Resource Committee, the Risk Management Committee, the Information Technology Committee, and the Audit Committee. The Audit Committee is chaired by Mr. Yameen Kerai, while the Risk Management Committee is chaired by Mr. Shehzad Naqvi. These committees enhance the board’s ability to provide strategic direction, oversee risk management, and maintain strong internal controls. Minutes of all committee meetings are effectively recorded and maintained, ensuring transparent documentation of deliberations and decisions and reinforcing the board’s commitment to sound governance and regulatory compliance.

The company’s external auditors are KPMG., one of the Big Four audit firms and listed in Category A on the State Bank of Pakistan’s panel of auditors. They have expressed an unqualified opinion on the company’s financial statements for 2026, reflecting compliance with applicable accounting standards and supporting the credibility and transparency of PFSL’s financial reporting.

Parwaaz Financial Services Limited operates through a clearly defined organizational structure comprising six core functions: Business, Risk and Compliance, Information Technology, Human Resources and Administration, Finance and Secretarial, and Digital Services. Each function is headed by a designated functional lead who reports directly to the Chief Executive Officer, establishing clear reporting lines and oversight. The structured hierarchy within each function facilitates appropriate delegation of authority, interdepartmental coordination, and accountability, supporting efficient day-to-day operations and timely execution of management directives in line with regulatory and strategic objectives.

Parwaaz Financial Services Limited is led by a team of qualified and experienced professionals with extensive exposure in their respective fields. Mr. Javed Iqbal, Chief Executive Officer, possesses over three decades of diversified banking experience in investment, corporate, commercial, and SME banking, having successfully led SME and commercial business segments at Faysal Bank, United Bank, Standard Chartered Bank, and Bank Alfalah. Mr. M. Atif Kauser, Chief Risk Officer, has nearly thirty years of banking experience with a strong focus on risk management across consumer, SME, and corporate segments, and has previously served as secretary to the Board Risk Committee at Silkbank for more than a decade. Mr. Hassan Yasser, Head of Business, brings more than two decades of expertise in SME and commercial banking, business development, product innovation, and relationship management. Mr. Asghar is currently leading Digital Strategy and enterprise transformation at PSFL. He is a senior banking and NBFC executive with over 20 years of multi-model experience across commercial banking, microfinance, digital banking and non-bank financial services, with a demonstrated track record of P&L ownership, portfolio build-out, business growth and enterprise transformation in regulated financial-services environments. Mr. Chaudhry Iftikhar, Chief Technology Officer, offers eighteen years of experience in software engineering and fintech innovation, including leadership in developing regulated digital financial solutions and implementing large-scale technology transformations.

The management has established three key committees namely the Management Committee, the Management Credit and Risk Committee and the Asset Liability Management Committee to facilitate smooth operations and strengthen internal oversight. Each committee works with clearly defined roles and responsibilities covering strategic implementation, risk identification and control, credit approval and funding management. Their structured mandates, along with clear reporting lines and effective recording of meeting minutes, enhance decision making, ensure regulatory compliance and contribute to the overall effectiveness of the organizational structure.

The Board of Directors holds overall responsibility for establishing and overseeing the company’s risk management framework. A comprehensive risk management policy is in place that defines the processes for identifying, assessing, monitoring, and mitigating key risks. Implementation of this framework is supported by various board and management level committees, including the Risk Management Committee, the Management Credit and Risk Committee, and the Asset Liability Management Committee. These committees ensure that risk controls are effectively applied, regulatory requirements are met, and emerging risks are promptly addressed, thereby strengthening the company’s ability to maintain a prudent risk profile while pursuing its business objectives.

The Board of Directors holds overall responsibility for establishing and overseeing the Company’s risk management framework. A comprehensive risk management policy is in place, outlining processes for the identification, assessment, monitoring, and mitigation of key risks. The framework is supported by various Board- and management-level committees, including the Risk Management Committee, Management Credit and Risk Committee, and Asset Liability Management Committee. These committees provide oversight of risk exposures, ensure adherence to applicable regulatory requirements, and facilitate timely identification and mitigation of emerging risks. The overall framework supports disciplined risk management while enabling the Company to pursue its business objectives.

Total assets of NBFCs grew by ~41.6% YoY to PKR ~5,635bn in FY25 (FY24: PKR ~3,978bn), primarily led by ~45.2% growth in mutual funds and plans, supported by the strong performance of the PSX, which delivered a ~60.5% return during the year, as well as the relatively favorable tax treatment of income funds compared with bank deposits. The sector's asset base continued to expand, reaching PKR ~6,844bn as of 6MFY26 (6MFY25: PKR ~6,204bn). Going forward, while geopolitical uncertainty may weigh on investor sentiment, demand for professionally managed savings and investment products is expected to remain supportive. However, changes in the interest-rate environment could influence asset allocation, with higher deposit yields potentially encouraging a shift toward interest-bearing instruments. Mutual funds and plans remained the dominant segment, accounting for ~66.3% of total NBFC assets in 6MFY26, followed by discretionary/non-discretionary portfolios at ~14.5% and Non-Banking Microfinance Companies at ~6.0%.

Parwaaz Financial Services Limited is a relatively new entrant in the investment finance and SME lending market but has demonstrated rapid growth since commencing operations about two years ago. The company has built a loan portfolio exceeding PKR 3.4 billion with negligible non-performing loans, reflecting prudent risk management and effective credit assessment practices. Although PFSL’s market share remains small compared to established competitors, the early build-up of a quality portfolio and the adoption of structured risk mitigation strategies underscore its ability to establish a growing presence in the SME financing space.

Mark-up earned by the Company stood at PKR 329mln during 6MCY26 (CY25: PKR 753mln; CY24: PKR 1,092mln), reflecting a continued decline in core mark-up income, owing to policy rate decrease. Total income stood at PKR 187mln during 6MCY26 (CY25: PKR 366mln; CY24: PKR 465mln).

The Company’s PAT stood at PKR (77)mln in CY25, marking a decline compared to CY24 (PKR 53 million; CY23: PKR 87 million). However, during 6MCY26, it is standing at PKR 48 million. The company continued to benefit from below-commercial-rate funding from its parent, supporting earnings sustainability.

PFSL continues to focus on expanding its customer base, while the Company is also in the process of introducing digital services to improve customer accessibility by digitizing the end-to-end lending process. Going forward, the competitive pricing environment, particularly in comparison with banks and other financial institutions, will remain an important consideration in assessing the sustainability of the Company’s business model and portfolio growth.

Parwaaz Financial Services Limited maintains a dedicated risk management function responsible for assessing the creditworthiness of potential borrowers and ensuring that all documentation, collateral, and security requirements are in line with the company’s credit extension policy. An in-depth credit management policy provides clear guidelines on portfolio diversification and includes limits to control group and sector exposures. The structured credit evaluation process, supported by internal risk rating tools and ongoing monitoring, helps mitigate concentration risk and supports the maintenance of a sound asset quality profile.

Parwaaz Financial Services Limited is exposed to market risk primarily through fluctuations in interest rates, which can affect both its borrowing costs and the yield on loan receivables. The company mitigates this exposure by maintaining a conservative investment strategy, with the investment portfolio largely comprised of government securities, which provide stability and predictable returns. As of June 2026, PFSL’s investment portfolio stood at approximately PKR 522 million compared to PKR 53mln in CY25 and PKR 20,803mln in CY24.

The company’s funding profile is currently supported by equity contributions and a subordinated loan from the parent company at a concessional rate of KIBOR minus 2 percent, which has helped reduce finance costs and supported early profitability. PFSL has also diversified its funding base through the issuance of a Green Bond, the proceeds of which have been successfully deployed to expand the loan portfolio. While these sources provide a stable funding foundation, the company’s future growth will depend on its ability to secure additional financing at competitive rates. Management plans to pursue commercial borrowings and potential additional bond issuances to sustain portfolio expansion and maintain adequate liquidity to meet business requirements.

As of June 2026, Parwaaz Financial Services Limited reported equity of PKR 1,790mln compared to PKR 1,724 in CY25 and PKR 1,819mln in CY24. The company’s equity-to-total-assets ratio stood at approximately 39.2% (CY25: 38.8%; CY24: 7.3%), indicating a healthy capital buffer despite gradual leverage build-up to support portfolio growth. The debt-to-equity ratio stood at 1.4x times (CY25: 1.4 times; CY24: 12.5x) but remains within a comfortable range, reflecting a stable capital structure with sufficient capacity to absorb planned expansion while maintaining regulatory compliance and financial flexibility.