The Pakistan Credit Rating Agency Limited
Press Release


Sehar Fatima

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Entity Ratings of JWS Pakistan

Rating Type Entity
(28-Mar-23 )
(28-Mar-22 )
Action Maintain Upgrade
Long Term BBB BBB
Short Term A3 A3
Outlook Stable Stable
Rating Watch - -

JWS Pakistan ('JWSP' or ‘the Institution') is a Microfinance Institution (MFI) governed by the Securities & Exchange Commission of Pakistan (SECP) under Section 42 of the Companies Act,2017. The Institution is licensed to operate under NBFC (Establishment and Regulations) Rules, 2003, Non-Banking Finance Companies and Notified Entities Regulations 2008. It has been in operation since 2015. The key element is that MFIs are not permitted to mobilize deposits, and they are also not backed by any stakeholder equity due to their status as "Companies Limited by Guarantee". These two elements, in combination, provide funding constraints, while they also delimit the boundaries of risk. JWSP is a not-for-profit organization, hence, the source of funding comprises a) internal generation of profits, b) loans, and c) grants.
Over recent years, the Institution has sizably enhanced GLP which lead to improved markup earned, resultantly net markup income also reflected an increase. Total income witnessed an upsurge to PKR 1,103mln during FY22 (FY21: PKR 645mln). Despite higher provisioning expenses, net profitability improved manifolds, and during FY22 net profit augmented to PKR 126mln (FY21: PKR 74mln). The Institution overcame the recent increase in non-performing loans due to the expiration of SBP’s deferment scheme period, attributable to efficient fieldwork which resulted in 100% cumulative recovery. Hereby, the infection ratio remains one of the lowest in the industry. Sustained asset quality will remain an important factor in the future. The Institution majorly relies on local avenues for borrowings, primarily PMIC. The funding base strengthened, during last year, attributable to foreign funding which shall fuel growth in upcoming years. The institution's cost of funds remained under control. The ratings also incorporate the vulnerability in business due to low market share and limited geographical presence. Room for growth in the technological domain exists.
Furthermore, the Institution has added more branches where the cumulative number has surpassed 110. The ratings are dependent on the Institution's aptness to sustain positive performance indicators amidst growth in business volumes. Ratings will monitor expansion and the impact of technological progress on the operational and risk efficacy of the Institution.

About the Entity
JWS Pakistan was incorporated in 2015 as a Public Company Limited by Guarantee under Section 42 of the Companies Ordinance, 1984 (now the Companies Act, 2017). It is also licensed by the SECP under the Non-Banking Finance Companies Rules, 2003. The overall control of the Institution vests with an eight-member Board of Directors. Ms. Sabiha Shaheen is the Chairperson of the Board. Mr. Qazi Shoaib Alam Farooqi is the CEO and founding member of the Institution, who brings with him a wealth of experience, of more than two decades in the industry. Other members of the management, possess adequate experience from diverse backgrounds.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.