PACRA Maintain the Entity Ratings of Rural Community Development Programmes

The assigned ratings reflect Rural Community Development Programmes ("RCDP" or "the Company") established franchise within Pakistan's microfinance sector, underpinned by a mission-oriented business model centered on financial inclusion, rural penetration, and women empowerment. The Company's branch footprint expanded to 232 conventional branches and 20 Prime Minister Interest Free Loan (PMIFL) branches as of Mar'26 (Mar'25: 160 conventional and 32 PMIFL branches), supported by an experienced management team and sustained borrower accretion. As of 9MFY26, RCDP's Gross Loan Portfolio increased by 58% to PKR 17,418mln (9MFY25: PKR 11,081mln), reflecting robust portfolio scaling driven by deeper market penetration and persistent demand for microfinance products. The borrower base increased to 340,653 as of Mar'26 (Mar'25: 245,255), with female and rural borrowers representing 98% and 63% of the portfolio, respectively, reinforcing the Company's distinct positioning within the financial inclusion ecosystem. Financial performance remained satisfactory during 9MFY26. Total financial income increased by 20% to PKR 4,545mln (9MFY25: PKR 3,797mln), primarily comprising markup income of PKR 3,875mln, up 19% (9MFY25: PKR 3,245mln), and loan processing fee income of PKR 670mln, up 21% (9MFY25: PKR 551mln). Finance cost increased by 18% to PKR 1,193mln (9MFY25: PKR 1,015mln) owing to higher borrowings mobilized to support portfolio expansion, while provisioning charges rose sharply by 167% to PKR 217mln (9MFY25: PKR 81mln) commensurate with portfolio growth. Operating expenses increased by 39% to PKR 2,758mln (9MFY25: PKR 1,978mln), primarily attributable to branch network expansion and administrative costs associated with increased operating scale. Resultantly, the Company reported a net surplus of PKR 623mln during 9MFY26, down 29% (9MFY25: PKR 882mln). The equity base strengthened to PKR 5,626mln as of 9MFY26, up 18% (9MFY25: PKR 4,778mln), supported by internal capital generation, enhancing loss absorption capacity and financial flexibility. The Capital Adequacy Ratio (CAR) stood at 28.36% as of Mar'26 (Mar'25: 38.8%), reflecting higher leverage deployed to fund portfolio growth, while remaining comfortably above the regulatory threshold. RCDP's liquidity profile remains adequate, supported by cash and bank balances of PKR 2,813mln, up 35% (9MFY25: PKR 2,082mln), and a diversified funding mix comprising long-term borrowings and institutional funding lines. The Company continues to maintain a prudent asset-liability management framework to support its expanding operations. Credit risk indicators remain manageable, with established underwriting disciplines, portfolio surveillance mechanisms, and provisioning buffers supporting overall asset quality. The Company has a well-articulated risk management framework and operational control environment. Governance and oversight remain satisfactory. The Board provides strategic direction through established governance structures, while independent Risk Management, Compliance, and Internal Audit functions support effective internal controls and enterprise-wide risk oversight. The Company maintains structured policies and procedures across lending, recovery, and monitoring functions, fostering operational rigor and institutional sustainability.
The ratings are dependent on the Company's ability to sustain portfolio growth, asset quality, capitalization, profitability, and sound liquidity and leverage management.

About the Entity
RCDP is a not-for-profit, public unlisted company incorporated in 2015 under Section 42 of the repealed Companies Ordinance, 1984. Its roots trace back to 1996 through the Rural Community Development Society, reflecting a long-standing commitment to rural development. The Company is governed by an eight-member Board chaired by Ms. Ayesha Gulzar, while Mr. Muhammad Murtaza serves as CEO. Headquartered in Lahore, RCDP operates 252 branches under its SECP license and conducts training programs to strengthen economic resilience within underserved communities.