NRSP Microfinance Bank Limited (the “Bank”) was incorporated as a public limited company under the Companies Act,2017 and obtained a license from the State Bank of Pakistan (SBP) on February 18, 2009, to operate nationwide as a microfinance bank under the Microfinance Institutions Ordinance, 2001, with operations commencing in March 2011.

The Bank builds on the experience of its parent institution -the National Rural Support Programme (NRSP), which in 2008 spun off its Micro Enterprise Development Program (MEDP) into a separate entity. The Bank was established to mobilize funds for providing microfinance banking and related services to low-income and underserved segments of society, aiming to mitigate poverty by granting access to financial markets at the micro level.

The Bank currently operates with its head office in Shalimar Arcade Plot No. 11-12C, Shalimar Avenue, Shalimar Town, Near Motorway Fatehjang Interchange, Fatehjang Road, Islamabad. As of December 2024, the Bank operates a nationwide branch network of 133 branches, including 37 Islamic branches, offering a wide range of financial services such as micro-lending, micro-insurance, Islamic banking products, and deposits to financially excluded individuals in both urban and rural areas across Pakistan.

The Bank is a subsidiary of the National Rural Support Program (NRSP), holding a 57.40% share. Other institutional shareholders include the International Finance Corporation (IFC) (16.02%), PROPARCO (15.91%), and Acumen (10.68%). The Bank benefits from consistent sponsor support and a stable ownership structure since inception, which bolsters its stability. The solid financial standing of its sponsors further strengthens the Bank's financial capacity.

Continued sponsor support accompanied by a stable ownership pattern, since inception, bodes well for the Bank.

The National Rural Support Program (NRSP), a nonprofit organization founded in 1991, operates as an autonomous body backed by a government guarantee. It is the largest Rural Support Program in the country, based on outreach, workforce, and development activities. Other sponsors, including IFC—a member of the World Bank Group—and Acumen, established in 2001, share a commitment to advancing underprivileged communities in developing economies and promoting financial inclusion.

The solid financial position of the sponsors significantly strengthens the Bank’s overall financial strength.

The Bank is governed by a eight-member Board of Directors (BOD), which includes the Chief Executive Officer (CEO). The Board of Directors is branched into four sub-committees namely (i) Audit (ii) Remuneration & Compensation and (iii) Operational Risk and Policy (iv) Information and Technology.

The Directors are experienced professionals having exposure in various sectors, including the microfinance industry. Dr. Rashid Bajwa, Chairman of NRSP Bank and CEO of NRSP, is a public health expert with extensive leadership experience in rural finance and poverty alleviation initiatives. Mr. Riaz Khan Bangash, President and CEO of NRSP Microfinance Bank, is a seasoned banker with over 30 years of experience in commercial, SME, consumer, and microfinance banking. Mr. Fazlullah Qureshi, a former Federal Secretary for Planning & Development, brings vast public sector and regulatory expertise to the board. Mr. Shoaib Sultan Khan, a pioneer of rural support programs in Pakistan, offers decades of development sector leadership. Dr. Ayesha Khan, CEO of Acumen Pakistan, has deep expertise in corporate strategy, development finance, and consulting with top-tier global organizations. Dr. Shahida Jaffery, an educationist and development leader, has extensive experience in women's education, rural health, and rural development initiatives in Balochistan. Mr. Stephen Rasmussen, an expert in financial inclusion and digital finance, brings 30 years of global development and microfinance experience. Mr. Jesse C. Frip, a global expert in enterprise strategy and impact capital, adds deep insight into business transformation, fintech, and sustainable economic growth. Mr. Shahid Sattar, a veteran banker with 41+ years of corporate, retail, SME, and Islamic banking experience across multiple countries, enriches the board with vast commercial and leadership expertise.

The Board committees ensure effective over-sight of the Bank’s affairs and strengthen the Board’s governance role.

M/S Yousuf Adil & Co. are the external auditors of the Bank. The auditor has expressed an unmodified report on the financial statements of CY24.

The Bank has divided its organizational structure into eight departments with each department head reporting directly to the CEO, while the head of the internal audit department reports to the Audit Committee.

The management team consists of experienced professionals with backgrounds across various sectors, including microfinance. Mr. Riaz Khan Bangash, an MBA graduate, serves as CEO/President with 38 years of experience. Mr. Asif Mahmood, a Chartered Accountant, is the CFO and Company Secretary with 18 years of experience. Mr. Obaid Riaz, holding an M.Com degree, is the Head of Business-Multan with 17 years of experience. Mr. Rehan Qazi, an EMBA graduate, is the Head of Business-Sindh with 22 years of experience. Mr. Shakil Ahmad, an MBA graduate, heads Business-North with 12 years of experience. Mr. Muhammad Zubair, an MBA graduate, is the Head of Business-Sahiwal, bringing 28 years of experience. Mr. Muhammad Rashid Rafique, an MBA holder, leads Business-Bahawalpur with 14 years of experience. Mr. Muhammad Hamid Anwar, with an M.Com degree, holds dual responsibilities as Head of Compliance and additional charge of Risk, backed by 17 years of experience. Mr. Muhammad Shafiq Khan, with an MCS degree, is the Acting Head of IT with 16 years of experience. Mr. Muhammad Naeem, a CMA/MS degree holder, is the Head of Internal Audit with 15 years of experience. Mr. Hafiz Muhammad Abad Irshad, with an MA in Islamic Studies, serves as the Resident Shariah Advisor with 15 years of experience. Mr. Muhammad Zeeshan Munir, an MBA graduate, leads Branchless Banking and Liability with 17 years of experience. Mr. Asif Shah Bukhari, an MBA holder, is the Acting Head of Operations, bringing 27 years of professional experience.

To ensure the effectiveness of the operations, the Bank has three management committees in place, namely; i) Operations and Risk Management Committee (ORMC), ii) Asset Liability Committee (ALCO) and iii) IT Steering Committee.

Detailed MIS reports are generated to support the senior management in timely and effective decision-making. MIS includes reports about disbursements, repayments, recoveries, deposits, and compliance.

The Bank has instituted policies for assessing credit worthiness of loan applicants, which is par-amount to its business model. Recently, the Bank has particularly steered its focus toward consolidating its position by adopting more stringent and efficient risk control mechanisms.

The Bank uses Oracle Flexcube as its core banking software; implemented since 2012. A back-to-back support contract from Oracle is directly in place to ensure a smooth system run.

The Microfinance Banking Sector (the "Sector") continues to grapple with long-standing challenges in the form of declined asset quality, negative profitability and weakened Capital Adequacy Ratio (CAR) mainly driven by the historical impact of the COVID-19 pandemic in CY20 to the hazard of floods in Jul-Aug'22 followed by the economic slowdown in CY23, the Sector's resilience has been repeatedly tested. During CY24, the deposit base of MFBs increased by 5.4% to stand at PKR 630bln. The GLP of the Sector recorded a marginal uptick of 9.4% to stand at PKR 597bln. Whereas, the infection ratio jumped to 8.5% in CY24 from 6.6% in CY23. The reported loss of the Sector soared to PKR 12.1bln from PKR 8.1bln in CY23. Consequently, the equity base of the Sector declined to PKR 22.6bln from PKR 37.4bln, resulting in the declined CAR of the Sector clocking in at 5.7% from 7.6% in CY23 falling far below the regulatory threshold of 15%. These factors cumulatively raise serious and persistent concerns about the performance of the Sector.

In CY24, the Bank captured a 6% share of the market based on its Gross Loan Portfolio (GLP).

The markup income of the Bank increased by 27.7% to PKR 12.5bln during CY24 (CY23: PKR 9.8bln). This increase was primarily driven by a increased investments. During CY23 the markup income from investment was PKR 1bln and it inclined to PKR 6.9bln during CY24.

In CY24, NRSP Microfinance Bank’s performance improved notably over CY23. Non-markup income fell to PKR 298 mln (CY23: PKR 2.5bln) due to lower fee and commission earnings, but provisioning reversals of PKR 682mln (CY23: charge of PKR 2.2bln) supported profitability. As a result, the Bank posted a profit after tax of PKR 1.2bln (CY23: PKR 911mln), reflecting 34.4% growth. Deposits rose 39% to PKR 55bln, while net advances grew modestly by 3.2% to PKR 37.1bln. Total assets expanded to PKR 177.2bln, primarily driven by higher investments and borrowings. The CAR improved to 1.0% (Dec23: -6%) and equity strengthened by 74% to PKR 3.6bln.

NRSP Bank’s sustainability is strongly backed by its sponsor’s continued support, ensuring financial stability and strategic guidance. With an effective recovery strategy in place, the Bank has successfully strengthened its asset quality. As a result, NRSP Bank has transitioned into profitability, reflecting improved operational efficiency and long-term sustainability.

As of end-Dec’24, gross advances rose by 3.3% to ~PKR 37.1bln (Dec’23: PKR 35.9bln), this growth was accompanied by a significant reduction in Non-Performing Loans (NPLs), which decreased to PKR 1bln (Dec’23: PKR 1.2bln), as a result, the infection ratio improved to 1%, down from 3.6% in the previous year. This improvement in asset quality was driven by effective risk management strategies and a focused effort to reduce nonperforming assets.

As of the end Dec'24, the Bank’s investment book increased to PKR 120bln (Dec'23: PKR 5.6bln; Sep'24: PKR 12.7bln), with large exposure in government securities.

At end-dec’24, deposits stood at PKR 55bln, and total borrowings increased to PKR 112bln, with secured borrowings from financial institutions amounting to PKR 112bln (Dec’23: PKR 8.5bln), followed by subordinated debt at PKR 1.1bln. The Bank's equity base grew to PKR 1.6bln by end-Dec’24 (Dec’23: PKR 2bln) due to sponsor capital injection and profitability. By Dec’24, equity was 3.6bln.

The Advances to Deposits Ratio (ADR) dropped to 67.6% in Dec'24 (Dec'22: 89.8%), this decrease reflects a shift in the Bank's financing strategy over the years.

The Bank continues to face challenges in meeting the Capital Adequacy Ratio (CAR) requirements, with the CAR at 1% as of Dec'24, an improvement from-6.02% in Dec'23.