PACRA Maintains Entity Ratings of AGAHE Pakistan

The assigned rating reflects the adequate profile of AGAHE Pakistan (“the Company”) within Pakistan’s microfinance sector. The Company operates as a not-for-profit organization under the regulatory purview of the Securities and Exchange Commission of Pakistan (SECP), pursuant to Section 42 of the Companies Act, 2017. AGAHE Pakistan is focused on empowering women and youth by enhancing their economic standing through improved access to finance. The Company continues to expand its footprint across Punjab to support portfolio growth while maintaining non-performing loans within acceptable thresholds. It currently operates a network of 54 branches (FY25: 50; FY24: 40), facilitating financial inclusion and extending outreach to underserved communities. The Gross Loan Portfolio (GLP) comprises a diversified range of products, including Micro-Enterprise, General Business, Livestock, Miraj Islamic Micro-Enterprise, Renewable Energy, Auto, Education, Islamic Financing, and Housing Loans. This product diversity enables the Company to cater to a broad borrower base across varying income segments and financing needs. The Company maintains diversified funding sources, including PMIC, SBP, NBP, HBL, BOP, ABL and JSBL, supporting the stability and flexibility of its funding base while reducing reliance on any single source of credit. The microfinance sector, which previously experienced stress amid a challenging macroeconomic environment, demonstrated recovery during FY25. This improvement was driven by easing inflationary pressures and a reduction in policy rates, contributing to a gradual restoration of consumer confidence and borrower repayment capacity. The sector’s GLP increased to PKR 204 billion in FY25 from PKR 113.4 billion in FY24. This positive momentum has continued into 1HFY26, providing a more conducive operating environment for microfinance institutions. In line with broader sector trends, the Company’s GLP exhibited sustained growth, reaching PKR 3,529 million in 9MFY26, compared to PKR 2,801 million in FY25. Net surplus increased to PKR 240 million (FY25: PKR 174 million), reflecting enhanced operational efficiency and improved portfolio performance. The infection ratio remained contained at approximately 1.1%, underscoring the effectiveness of the Company’s credit monitoring and recovery mechanisms across its branch network. The Board of AGAHE Pakistan comprises qualified and experienced professionals who provide strategic oversight in accordance with sound corporate governance practices. The senior management team is stable and experienced, supported by well-defined reporting lines, a structured organizational framework, and effective monitoring systems. Integration with the head office enables real-time tracking of disbursements and recoveries, while ongoing technological enhancements continue to strengthen the control environment and operational transparency. Exposure to macroeconomic conditions remains a key sensitivity, particularly in light of ongoing regional geopolitical developments that may elevate crude oil prices. Such pressures could increase household expenses, potentially affecting borrowers’ repayment capacity and, consequently, asset quality.
The ratings are dependent on the Company’s ability to sustain positive performance indicators and to deliver consistent growth amid a challenging operating environment. Continued expansion in profitability and the financing portfolio, together with the comfortable liquidity buffers and resilient margins, remains critical. Sustained recovery performance and asset-quality stability will also remain imperative.

About the Entity
Agahe Pakistan (“AP” or the “Company”) was incorporated on January 22, 2016, as a company limited by guarantee not having a share capital under Section 42 of the repealed Companies Ordinance, 1984. The Company is licensed by the SECP to undertake Microfinance Services as a Non-Banking Microfinance Company. The Institution is governed by a seven-member Board of Directors, chaired by Mr. Abid Aman Barki. Mr. Barak Ullah serves as the Chief Executive Officer, leading a team of seasoned professionals and overseeing the Company’s operations and strategic direction.