Powered by AKSA-SDS A QUARTERLY UPDATE ON MICROFINANCE OUTREACH IN PAKISTAN ISSUE 54: Q4 (OCT-DEC) 2019 Quarter Change Q4 - 2019 Q3 - 2019 Units % Number of Branches/Units 4,036 3,925 111 2.8 Number of Districs Covered 138 137 1 0.7 Penetration Rate(%) 35.4 35.1 0 0.7 Active Borrowers 7,249,943 7,201,488 48,455 0.7 Gross Loan Portfolio (PKR Millions) 305,753 298,152 7,601 2.6 Number of Loans Disbursed 2,624,190 2,006,076 618,114 30.8 Disbursements (PKR Millions) 123,935 80,217 43,718 54.5 Average Loan Size(PKR) 47,228 39,987 7,241 18.1 Number of Savers 47,642,271 42,319,269 5,323,002 12.6 Value of Savings (PKR Millions) 267,591 241,655 25,937 10.7 Average Saving Balance (PKR) 5,617 5,710 -94 -1.6 Number of Policy Holders 8,479,576 8,465,620 13,956 0.2 Sum Insured (PKR Millions) 266,748 260,258 6,490 2.5 The last quarter of the calendar year 2019 observed growth in all major microfinance indicators. This was also the period that experienced the highest number of loans disbursed in a single quarter with over 2.6 million worth disbursements of almost PKR 124 billion, an increase of 31% and 54.5% respectively, from the previous quarter. Concerning Microcredit, the Gross Loan Portfolio (GLP) increased by 2.6% to surpass PKR 305 billion while active borrowers clocked at 7.25 million. The growth in GLP was fueled by Khushhali Microfinance Bank (KBL), First Microfinance Bank (FMFB) & U Microfinance Bank (Ubank) which added a cumulative of over PKR 9 billion, as MFBs continued to hold the largest share of GLP with 70%. KBL also remains the largest provider of Microcredit in terms of GLP as its market share increased to 17.5% followed by FMFB at 10.2%. In terms of Active Borrowers, the end of the year saw Telenor Microfinance Bank (TMFB) become the largest provider with over 896 thousand clients and a market share of 12.4% followed by KBL & Akhuwat with 12% each. However, Akhuwat continues to have the largest geographic footprint as it expanded its outreach to 90 districts, followed by KBL and FMFB in 82 and 81 districts respectively. The increase in clients was also driven by banks i.e. KBL, FMFB & TMFB, which added over 75 thousand clients combined. The market share by peer group remained unchanged as MFBs held 49% and NBMFCs 51% of the clients. The share of Islamic microfinance segment remained stagnant at 13% in terms of clients and 8% in terms of GLP. Marginal change was observed in terms of lending based on asset type as secured lending increased to 10% in terms of clients and 17% in terms of GLP. The focus of Microcredit activities remains on the marginalized segments with 51% of total outreach attributable to women while 53% of outreach concentrated in rural districts. The sector also experienced an increase in PAR>30 days from 3.8 to 4.8 this quarter as GLP increased substantially. The breakdown by peer group indicated that the PAR of MFBs rose from 4.8% to 6.1%, while MFIs and RSPs experienced marginal increase to 1.3% and 2.7% respectively as well. Microsavings witnessed substantial growth as the number of savers and value of savings grew by 12.6% & 10.7% respectively. MFBs, being the sole contributor to savings, added PKR 26 billion with primary contribution from Mobilink Microfinance Bank (MMFB) which added PKR 8.8 billion, followed by KBL and Ubank which added PKR 5 billion and PKR 4 billion respectively. Nevertheless, the average deposit balance reduced from 5,710 to 5,617 during the quarter. In terms of active savers, major contribution came from TMFB and MMFB on the back of an increase in m-wallets as they increased to 36 million from 19 million in the previous quarter thereby taking the market share of m-wallets to 76%, while value of deposits through m-wallets stood at PKR 28 billion compared to PKR 25 billion previously. Male savers still held a majority share with 77% of total savers and 85% of value of savings, while 69% of the total savers were based out of urban regions. Microinsurance grew as policy holders increased to 8.47 million while the sum insured improved by 2.5% to reach PKR 266.7 billion. The quarter saw Kashf, FMFB & NRSP add the most policy holders, a total of almost a 100,000, while in terms of sum insured, KBL, FMFB and Kashf led the sector by adding over PKR 8 billion. Kashf remained the largest provider in terms of policy holders and sum insured with 2.6 million policy holders worth PKR 65.6 billion. The sector remained dominated by health and life insurance policies having a market share of 46% and 53%, respectively. The penetration rate of the sector stood at 35.4% while the total number of branches increased to 4,036 as Microfinance services expanded outreach to 138 districts. MicroWATCH is a quarterly publication of the Pakistan Micronance Network (PMN). It is made possible by the generous support of the Department for International Development (DFID, through UK-AID), the Citi Foundation and the Pakistan Poverty Alleviation Fund (PPAF). It is also a result of the efforts of organizations that contributed their data (for citations, see back cover). 1
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A QUARTERLY UPDATE ON MICROFINANCE OUTREACH ......Kashf, FMFB & NRSP add the most policy holders, a total of almost a 100,000, while in terms of sum insured, KBL, FMFB and Kashf led
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A QUARTERLY UPDATE ON MICROFINANCE OUTREACH IN PAKISTAN
Number of Savers 47,642,271 42,319,269 5,323,002 12.6
Value of Savings (PKR Millions) 267,591 241,655 25,937 10.7
Average Saving Balance (PKR) 5,617 5,710 -94 -1.6
Number of Policy Holders 8,479,576 8,465,620 13,956 0.2
Sum Insured (PKR Millions) 266,748 260,258 6,490 2.5
The last quarter of the calendar year 2019 observed growth in all major microfinance indicators. This was also the period that experienced the highest number of loans disbursed in a single quarter with over 2.6 million worth disbursements of almost PKR 124 billion, an increase of 31% and 54.5% respectively, from the previous quarter. Concerning Microcredit, the Gross Loan Portfolio (GLP) increased by 2.6% to surpass PKR 305 billion while active borrowers clocked at 7.25 million. The growth in GLP was fueled by Khushhali Microfinance Bank (KBL), First Microfinance Bank (FMFB) & U Microfinance Bank (Ubank) which added a cumulative of over PKR 9 billion, as MFBs continued to hold the largest share of GLP with 70%. KBL also remains the largest provider of Microcredit in terms of GLP as its market share increased to 17.5% followed by FMFB at 10.2%. In terms of Active Borrowers, the end of the year saw Telenor Microfinance Bank (TMFB) become the largest provider with over 896 thousand clients and a market share of 12.4% followed by KBL & Akhuwat with 12% each. However, Akhuwat continues to have the largest geographic footprint as it expanded its outreach to 90 districts, followed by KBL and FMFB in 82 and 81 districts respectively. The increase in clients was also driven by banks i.e. KBL, FMFB & TMFB, which added over 75 thousand clients combined. The market share by peer group remained unchanged as MFBs held 49% and NBMFCs 51% of the clients. The share of Islamic microfinance segment remained stagnant at 13% in terms of clients and 8% in terms of GLP. Marginal change was observed in terms of lending based on asset type as secured lending increased to 10% in terms of clients and 17% in terms of GLP. The focus of Microcredit activities remains on the marginalized segments with 51% of total outreach attributable to women while 53% of outreach concentrated in rural districts. The sector also experienced an increase in PAR>30 days from 3.8 to 4.8 this quarter as GLP increased substantially. The breakdown by peer group indicated that the PAR of MFBs rose from 4.8% to 6.1%, while MFIs and RSPs experienced marginal increase to 1.3% and 2.7% respectively as well. Microsavings witnessed substantial growth as the number of savers and value of savings grew by 12.6% & 10.7% respectively. MFBs, being the sole contributor to savings, added PKR 26 billion with primary contribution from Mobilink Microfinance Bank (MMFB) which added PKR 8.8 billion, followed by KBL and Ubank which added PKR 5 billion and PKR 4 billion respectively. Nevertheless, the average deposit balance reduced from 5,710 to 5,617 during the quarter. In terms of active savers, major contribution came from TMFB and MMFB on the back of an increase in m-wallets as they increased to 36 million from 19 million in the previous quarter thereby taking the market share of m-wallets to 76%, while value of deposits through m-wallets stood at PKR 28 billion compared to PKR 25 billion previously. Male savers still held a majority share with 77% of total savers and 85% of value of savings, while 69% of the total savers were based out of urban regions. Microinsurance grew as policy holders increased to 8.47 million while the sum insured improved by 2.5% to reach PKR 266.7 billion. The quarter saw Kashf, FMFB & NRSP add the most policy holders, a total of almost a 100,000, while in terms of sum insured, KBL, FMFB and Kashf led the sector by adding over PKR 8 billion. Kashf remained the largest provider in terms of policy holders and sum insured with 2.6 million policy holders worth PKR 65.6 billion. The sector remained dominated by health and life insurance policies having a market share of 46% and 53%, respectively. The penetration rate of the sector stood at 35.4% while the total number of branches increased to 4,036 as Microfinance services expanded outreach to 138 districts.
MicroWATCH is a quarterly publication of the Pakistan Micronance Network (PMN). It is made possible by the generous support of the Department for International Development (DFID, through UK-AID), the Citi Foundation and the Pakistan Poverty Alleviation Fund (PPAF). It is also a result of the efforts of organizations that contributed their data (for citations, see back cover).
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DISTRIBUTION OF ACTIVE BORROWERS
Top 5 Districts: Greatest Increase in Microcredit Outreach
District Active Borrowers (Q4) Growth (Q3 to Q4)
Net %
1 Karachi 588,390 100,058 20.5
2 Narowal 104,479 23,297 28.7
3 Nawabshah 44,798 7,759 21.0
4 Sialkot 181,543 7,686 4.4
5 Dadu 72,093 5,784 8.7
DISTRIBUTION OF ACTIVE SAVERS
Top 5 Districts: Greatest Increase in Savings Outreach
District Active Savers (Q4) Growth (Q3 to Q4)
Net %
1 Lahore 22,596,408 9,491,319 72.4
2 Peshawar 3,632,550 2,688,288 284.7
3 Muzaffarabad 659,833 434,216 192.5
4 Multan 507,553 127,261 33.5
5 Sargodha 266,358 66,742 33.4
Geographical boundaries for new districts demarcated in 2004-06 have not been made available by Survey of Pakistan. The following districts are therefore, not shown on the map: Sehwan Sharif, Jamshoro (Dadu); Matyari, Tando Allahyar, Tando Muhammad Khan (Hyderabad); Shedadkot (Larkana); Mingora (Swat); Sherani (Zhob)
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MICROCREDIT PROVISION
Summary of Microcredit Provision (All Pakistan)
Lending Methodology Asset Type Peer Group
Total Group Individual MSE Secured Unsecured MFB MFI RSP Other MFPs
Intermediation Mobilization MFB MFI RSP Other MFPs
No. of Reporting MFPs
Q3 39 16 11 5 11 - 5 -
Q4 37 16 11 5 11 - 5 -
Saving Methodology:
1. Intermediation: Public deposits used to nance an organization’s loan portfolio. Only SBP-regulated MFPs (CFIs and MFBs) can accept and intermediate deposits from the general public.
2. Mobilization: MFPs not regulated by SBP (MFIs, NGOs, RSPs) can neither hold nor intermediate deposits from the general public. These organizations do however mobilize savings from their members/clients to place with licensed commercial banks.
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MICRO-SAVINGS PROVISION
Largest Providers of Micro-savings (Value of Savings)
MFP Value of Savings (Q4) Market Share (% of Value of Savings)
1 KBL 63,882,456,705 23.9
2 TMFB 41,393,721,539 15.5
3 FMFB 38,429,596,116 14.4
4 MMFB 29,303,457,605 11
5 NRSP-B 26,671,225,746 10
Districts with Highest Outreach (Active Savers)
District Active Savers (Q4) Increase (Q3 to Q4)
Net %
1 Lahore 22,596,408 9,491,319 42
2 Karachi 6,299,015 -4,205,664 -66.8
3 Peshawar 3,632,550 2,688,288 74.0
4 Bahawalpur 771,523 64,969 8.4
5 Bhawalnagar 674,574 23,134 3.4
MFPs with Largest Increase in Active Savers (Net)
MFP Increase in Active Savers (Q3) to (Q4)
Net %
1 TMFB 2,832,064 19.7
2 MMFB 1,992,687 11.3
3 KBL 173,095 7.3
4 UBANK 99,126 13.4
5 FINCA 80,614 6.7
MFPs with Largest Increase in Value of Savings (Net)
MFP Increase in Value of Savings (Q3 to Q4)
Net %
1 MMFB 8,794,187,811 42.9
2 KBL 5,042,924,439 8.6
3 UBANK 4,090,136,411 21.3
4 TMFB 3,843,256,274 10.2
5 FMFB 2,811,394,469 7.9
Largest Providers of Micro-savings (Active Savers)
MFP Active Savers (Q4) Market Share (% of Active Savers)
1 MMFB 19,641,534 41.2
2 TMFB 17,182,314 36.1
3 NRSP 2,955,060 6.2
4 KBL 2,541,626 5.3
5 FINCA 1,283,677 2.7
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MICRO-INSURANCE PROVISION
Summary of Micro-insurance Provision (All Pakistan)
Total 30 - 31,435 947,810,633 301,109 23,991,838,866 104,931 3,831,068,384 -
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END NOTES
1,2 The microwatch publication has been updated in the current quarter to include four new indicators. The additional indicators pertain to Islamic microfinance, enterprise lending, asset backed (collateralized) lending and branchless banking. 3 The potential micronance market estimate has been updated by PMN from 27.4 million to 20.5 million. The methodology for the revised figure has been explained in the note “Estimating Potential Market Size For Microcredit In Pakistan” published by PMN on December 2015
REPORTING ORGANIZATIONS
Reporting PeriodCategory MFP
Q4 Q3
Advans Pakistan Microfinance Bank Limited
Apna Microfinance Bank Limited
FINCA Microfinance Bank Limited
Kushhali Microfinance Bank Limited
MCB Islamic Bank Limited
Mobilink Microfinance Bank Limited
NRSP Bank Limited
Pak-Oman Microfinance Bank Limited
Sindh Microfinance Bank Limited
Telenor Microfinance Bank Limited
The First MicrofinanceBank Limited
MFB
Microfinance Bank Licensed and prudentially regulated by the State Bank of Pakistan to exclusively
service microfinance market
U Microfinance Bank Limited
AGAHE Pakistan
Akhuwat
ASA Pakistan Limited
BRAC Pakistan
CSC Empowerment and Inclusion Programme
DAMEN Support Programme
FFO Support Programme
Islamic Relief Pakistan
JWS Pakistan
Kashf Foundation
Micro Options Support Programme
MOJAZ Support Programme
Naymet Trust
Organization for Poverty Reduction and Community Training Program