Rating Details	Rating Type	Social Impact and Performance Rating
	Dissemination Date	Current (13-Dec-22 )
	Action	Initial
	Rating	SIP3
	Outlook	Stable
	Rating Watch	-

Rating Rationale	Factor	Comment
	Ownership/Members	CEIP has three members, who have each given a guarantee of up to PKR 100,000 in case of a possibility of default.
	Governance	The board of directors comprises six members including two independent directors, depicting a sound governance structure. Two board committees with independent representation are also present for adde
	Management	CEIP's management is qualified and experienced, and turnover at senior management level is low. The organizational structure is defined with adequate departmentalization in place.
	Social Impact	CEIP has a publicly available mission statement which clearly outlines the target market and the manner in which CEIP intends to serve the market. A Social Performance Committee may be established at
	Business Sustainability	As borrowing is the primary source of funding for CEIP, the markup expenses have increased (~46%) more than the markup income (~28%) during FY22 due to a surge in the benchmark rate. The increase in o
	Financial Sustainability	The Company has a low equity base of ~PKR 384mln at end-Jun'22. The PAR 30 ratio has improved in FY22 compared to FY21; however, it is still on the higher side when compared with previous years.

Key Rating Drivers

CSC Empowerment and Inclusion Programme's ('CEIP' or the 'Company') goal is to provide microfinance to underprivileged households in Pakistan with an emphasis on financial inclusion and empowerment of women and the youth. CEIP approaches its clients to have success stories and clients' voices heard; however, CEIP may further add to this practice and compile the information gathered in the form of a social performance dashboard indicating the targets and achievements pertaining to social impact. A proper grievance redressal mechanism is in place with board-approved policy; however, the client grievance reports may be presented to the board at least annually. Going forward, the rating is dependent on management’s ability to raise funds and enhancement of market share. CEIP's commitment to its social objective and action on the same will be important for the assigned rating.

About the Entity
	Legal Structure	Not-for-profit organization (Section-42)
	Year of Establishment	19-Mar-15
	Type of License	Non-banking Microfinance Company (NBMFC)
	Majority Ownership	N/A

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

Disclaimer

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. 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 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.