Summary of Proposed Investment
Project Number
11218
Company Name
HBL MICROFINANCE BANK LTD
Date SPI Disclosed
Sep 14, 2001
Country
Pakistan
Industry
Financial Markets
Projected Board Date
Nov 5, 2001
Status
Completed
Sector
Commercial Banking - Microfinance and Small Business
Department
Global Industry, Financial Markets
Environmental Category
FI
Previous Events
Approved : Nov 8, 2001
Signed : Jun 14, 2002
Invested : Sep 24, 2002
Project Description
The project is to establish the first private sector microfinance bank in Pakistan, The MicroFinanceBank. The bank will start by principally absorbing the clientele of the microfinance program of AKRSP which has decided to separate its microfinance operations from its other activities in order to provide a full range of banking services to its clients and to expand its outreach nationally. The bank’s initial paid-up capital will be about PRs. 500 million (US$7.7 million equivalent), and it will be established as a non-listed public company under the Companies Ordinance of 1984 and as a microfinance institution (MFI) under the Microfinance Institutions Ordinance.
(i) Through this small, yet highly significant investment, IFC will participate in a pioneering effort to establish the first commercially oriented microfinance institution in Pakistan operating at the national level;
(ii) The project will establish a successful model MFI that can be replicated over time in Pakistan and other countries where AKFED operates; the expected increase in the supply of credit will positively impact currently underserved rural and urban areas and particularly the poor;
(iii) Working alongside AKFED and AKRSP, IFC will ensure that MicroFinanceBank is commercially oriented and operates using international best practice to achieve full financial accountability, sound corporate governance, high quality MIS, and strong policies and procedures.
(i) Improve governance in the financial sector. The project is expected to contribute to overall financial sector reform, and in particular, contribute to the development of financial infrastructure and improved governance within the financial system by expanding the role of the private sector;
(ii) Support growth of key sectors. The project would contribute to the development of Pakistan’s most dynamic sectors, in particular the agricultural sector and small and medium enterprises (SMEs), thus contributing to the resumption of economic growth and macroeconomic stability;
(iii) Contribute to more equitable growth. The project would contribute to more equitable growth by supporting the development of a sustainable, private microfinance institution which aims at improving access to financial services to a large under-served population in both rural and urban areas.
(i) Through this small, yet highly significant investment, IFC will participate in a pioneering effort to establish the first commercially oriented microfinance institution in Pakistan operating at the national level;
(ii) The project will establish a successful model MFI that can be replicated over time in Pakistan and other countries where AKFED operates; the expected increase in the supply of credit will positively impact currently underserved rural and urban areas and particularly the poor;
(iii) Working alongside AKFED and AKRSP, IFC will ensure that MicroFinanceBank is commercially oriented and operates using international best practice to achieve full financial accountability, sound corporate governance, high quality MIS, and strong policies and procedures.
(i) Improve governance in the financial sector. The project is expected to contribute to overall financial sector reform, and in particular, contribute to the development of financial infrastructure and improved governance within the financial system by expanding the role of the private sector;
(ii) Support growth of key sectors. The project would contribute to the development of Pakistan’s most dynamic sectors, in particular the agricultural sector and small and medium enterprises (SMEs), thus contributing to the resumption of economic growth and macroeconomic stability;
(iii) Contribute to more equitable growth. The project would contribute to more equitable growth by supporting the development of a sustainable, private microfinance institution which aims at improving access to financial services to a large under-served population in both rural and urban areas.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Rosy Khanna, Investment Officer
Email:rkhanna@ifc.org, or
Momina Aijazuddin, Investment Officer
Email: maijazuddin@ifc.org
Email:rkhanna@ifc.org, or
Momina Aijazuddin, Investment Officer
Email: maijazuddin@ifc.org