28231 - NRSP MFB

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Summary of Proposed Investment

Project Number

28231

Company Name

NRSP MICROFINANCE BANK LIMITED

Date SPI Disclosed

Jun 24, 2009

Country

Pakistan

Industry

Financial Markets

Projected Board Date

Sep 15, 2009

Status

Completed

Sector

Commercial Banking - Microfinance and Small Business

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Nov 24, 2010
Signed : Dec 20, 2010
Invested : Mar 26, 2012

Project Description

Pakistan, has over 160 million people with 41% of the population living below the poverty line(>$2/day). The financial sector penetration is very low in Pakistan with only 3.5% of the population having access to credit. Furthermore, financial service providers mainly operate in the urban areas leaving 66% of the population (located in rural/remote areas) without access to finance. With a 6.3% market penetration, there remains an enormous unmet demand in a microfinance market of 28 million potential clients The project consists of a transformation of National Rural Support Programme’s (NRSP) microfinance loan portfolio into NRSP Microfinance Bank (MFB) through an IFC equity investment and linked Advisory Services package.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	5.0
Loan
Equity	2.0

Development Impact

Increased Access to Finance: Only 3.5% of the population has access to credit and the microfinance penetration is only 6.3%. This project will support NRSP MFB’s expansion to reach over 700,000 micro borrowers/depositors over 7 years of operation. Transformation: The investment will enable the transformation of the largest MFI in the country and eventually help formalize one third of the microfinance sector. Rural Focus and Agriculture Finance: NRSP MFB will focus on low-income rural farmers/entrepreneurs. The project will support micro-entrepreneurs in rural areas as well as agriculture business through further branch expansion and through the introduction of additional financial services

IFC has a key role to play by providing scarce risk capital, in the current economic financial environment and through advisory services for a milestone transformation of the country’s largest microfinance player. The transformation will provide needed savings products and allow NRSP MFB to expand into new rural areas. No other IFI has IFC’s microfinance experience in MENA and Pakistan as well as its global experience in other microfinance transformations. IFC’s support is critical for NRSP MFB to be able to complete the needed transformation and begin operations as a microfinance bank.

This project involves IFC support for the business of Microfinance and has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Considering the nature of activities supported, the project will be required to:

Develop a procedure relevant to its business process, prior to disbursement or an agreed upon timeframe, that is satisfactory to IFC, and that ensures that all its investments are screened and processed to avoid supporting activities on Microfinance exclusion list
Identify qualified persons to manage and implement the procedure
Demonstrate commitment and resources to implementing the procedure
Demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions
Submit a periodic report to IFC as per a format to be provided by IFC

Contacts

For Inquiries About the Project, Contact

Dr. Rashid Bajwa President & CEO NRSP Microfinance Bank Ltd. 46, Aga Khan Road, F-6/4, Islamabad, Pakistan Tel: +92512822324 Fax: 92512822779 Email: rbajwa@nrsp.org.pk

For Inquiries and Comments About IFC, Contact

General IFC Inquiries IFC Corporate Relations 2121 Pennsylvania Avenue, NW Washington DC 20433 Telephone: 202-473-3800 Fax: 202-974-4384E Mail: Webmaster

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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