PACRA Maintains Entity Ratings of Parwaaz Financial Services Ltd

Parwaaz Financial Services Limited (PFSL or the Company) is a wholly owned subsidiary of Karandaaz Pakistan (KRN), a not-for-profit company established under Section 42 of the Companies Act, 2017. KRN operates with the support of the Foreign, Commonwealth and Development Office (FCDO), United Kingdom, and the Bill and Melinda Gates Foundation, and serves as an implementation partner for various financial inclusion and enterprise development initiatives in Pakistan. Incorporated in 2020, PFSL aims to bridge the financing gap faced by small and medium enterprises (SMEs) through tailored financial solutions. The addressable market remains sizeable, with an estimated 7.14mln SMEs operating across the formal and informal segments of the economy. According to estimates, outstanding SME financing increased to PKR 854bln as of March 2026 from PKR 584bln, serving ~312,000 active borrowers. The expanding SME financing landscape provides PFSL with considerable room to deepen its outreach and strengthen its market presence. PFSL’s lending activities are concentrated in sectors with significant economic and developmental relevance, including agriculture and industrial value chains, renewable energy, healthcare, and education. The Company has progressively diversified its product base through offerings such as digital lending, invoice discounting, and warehouse receipt financing, alongside its growing focus on sustainable finance. In March 2025, PFSL issued Pakistan’s first PKR-denominated Green Action Bond, marking an important step in broadening its funding base while supporting environmentally and socially focused financing. The Company currently maintains a loan portfolio of ~PKR 3,487mln, with asset quality remaining sound. Its customer base has also expanded across a range of sectors, supporting greater portfolio diversification and outreach. PFSL’s current funding base comprises equity of ~PKR 1.7bln, a concessional loan of PKR 1.5bln from KRN, and a PKR 1bln Green Action Bond. With portfolio growth remaining central to its strategy, the Company plans to mobilize additional funding through alternative financing avenues. The timely realization of these funding plans will remain important for supporting the targeted expansion of the loan book, while equity augmentation also forms part of the Company’s future roadmap. In parallel, PFSL has implemented an end-to-end digital loan disbursement platform, allowing financing applications and disbursements to be processed more efficiently while improving customer accessibility and operational effectiveness. Governance remains supported by an experienced Board of Directors comprising professionals with diverse technical expertise, with formal board committees providing additional oversight. The Company has also developed a comprehensive risk management framework covering identification, assessment, monitoring, and mitigation of key risks. Asset quality is further supported by an internally developed Obligor Risk Rating Model, which enables systematic assessment of borrower creditworthiness and portfolio risk. Accordingly, the ratings continue to draw strength from KRN’s support, an established governance structure, experienced management, and comprehensive risk management practices.
The ratings are contingent on the Company’s ability to materialize the envisaged strategy for the growth of its footprint and loan portfolio while ensuring a stable profitability matrix. Moreover, prudent risk management, sustainability of a healthy asset base, and conversion of the subordinated loan into equity and mutually agreed financial discipline will remain imperative to the ratings.

About the Entity
PFSL was incorporated in December 2020 under the Companies Act, 2017. The Company obtained the license to carry out investment finance services as a Non-banking Finance Company under the NBFC (Establishment and Regulation) Rules 2003 and NBFC and Notified Entities Regulations 2008. Mr. Shehzad Naqvi is the chairman of the board, whereas Mr. Javed Iqbal is the CEO. Both are experienced professionals with industry experience of over 3 decades.