Rating Details	Rating Type	Social Impact and Performance Rating
	Dissemination Date	Current (17-Mar-23 )
	Action	Initial
	Rating	SIP2
	Outlook	Stable
	Rating Watch	-

Rating Rationale	Factor	Comment
	Ownership/Members	ASA International Holding owns 99.99% of the ownership stake. The ASAI group has diversified global presence having branches in 13 countries currently.
	Governance	There are 6 directors on the board. The board structure of ASA-MFB is considered strong with 3 independent and 3 non-executive directors.
	Management	A well-defined organizational structure is present with an experienced management team to run operations smoothly. The technological infrastructure may be improved to automate the loan disbursement an
	Social Impact	The Company undertakes CSR activities throughout the year, while two senior management committees focused on social impact are present. The vision statement clearly defines the target market. It may l
	Business Sustainability	The Company is on a rapid YoY growth trajectory, the GLP has increased from ~PKR 10bln at end-Dec'20 to ~PKR 17bln at end-Sep'22. Despite the rapid growth, the expenses are contained with a healthy OS
	Financial Sustainability	The PAR30 ratio improved sharply after the COVID-19; however, the Company look towards improving its risk coverage ratio.

Key Rating Drivers

ASA Microfinance Bank (Pakistan) Limited (or the 'Company') received MFB license but will start operating as MFB after approval of COB from SBP. The Company was formed with a primary focus on women's empowerment, stemming from the ASAI group's focus on female entrepreneurs and the financial wellness of the rural population. The Company's focus on its mission is evident through having ~96% female borrowers at end-Sep 22. The management presents a client grievance summary to the board on a quarterly basis and has a well-structured program to provide financial literacy training to its customers. It is in the process of conversion to a microfinance bank, and the mobilization of deposits may decrease its reliance on foreign and local funding, improving its sustainability. Going forward, commitment to social objectives and action on the same will be important for the rating. Moreover, the rationalization of planned business strategies would be critical.

About the Entity
	Legal Structure	Public Limited
	Year of Establishment	11-Nov-11
	Type of License
	Majority Ownership

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Afnan Iqbal afnan.iqbal@pacra.com +92-42-35869504 www.pacra.com	Methodology | Social Impact and Performance Rating | Sep-22	Sector Study | Microfinance | Sep-22

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