Pakistan’s microfinance industry: A change brewing within?

As the microfinance banking model becomes increasingly unviable, players in the industry are reassessing their options

Microfinance as a sector is increasingly being pulled and shaped in different positions. From Telenor selling its bank, to Bank of Punjab announcing its plans to acquire a strategic stake in NRSP all has added to speculations about the economic feasibility of operating a bank in the segment.  

Telco players like Jazz are trying to explore additional avenues to consolidate in their existing financial service models while commercial banking players like HBL, which has recently rebranded First Microfinance Bank to HBL Microfinance Bank, are solidifying their grip on existing investments.

Amidst all the changes happening within the sector, the question arises whether microfinance banks are commercially viable for the investors or are there other strategic motives for operating in the market?

Pakistan’s microfinance industry

The objective of microfinance is similar to that of microcredit; its goal is to provide financial services to help encourage entrepreneurs in impoverished nations to act on their ideas and obtain the financial tools available to do so and to eventually become self-sustainable.

 

To read the full article, subscribe and support independent business journalism in Pakistan

The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account.

Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.

(Already a subscriber? Click here to login)
  • Full Price Subscription Plans

    Not only will you be supporting independent journalism, 25% of the amount from your subscription will be used to subsidise those subscribers who cannot afford the full price of the subscription. As a subscriber you will get full access to exclusive paywalled content, and an ad free reading experience. Yearly full price subscription plans also include a complimentary annual subscription to The Wall Street Journal.

    +

  • Subsidised Subscription Plans

    Pay part of the full subscription price, if you cannot afford to pay all of it, and the rest will be subsidised by a full paying subscriber. As a subscriber you will get access to exclusive paywalled content, and an ad free reading experience.

  • Free Student Subscriptions

    If you are currently a student, you can claim an already-paid-for digital subscription, courtesy

    As a subscriber you will get access to exclusive paywalled content, an ad free reading experience.

     

Ahtasam Ahmad
Ahtasam Ahmad
The author works as an Editorial Consultant at Profit and can be reached at [email protected]

5 COMMENTS

  1. Amidst all the changes happening within the sector, the question arises whether microfinance banks are commercially viable for the investors or are there other strategic motives for operating in the market?

  2. This is a very lopsided analysis. You have given all the space to Losers and made only a passing reference to the best microfinance banks in the country.
    I think a detailed analysis of the most profitable banks, Khushhali, HBL microfinance, and U bank, would have been more instructive.
    As presented, it appears more like sponsored content.

    • Dear Imran, what is the future of microfinance banks in Pakistan? Currently Ubank is aggressively expanding its branches networks so what your opinion about it.

      As recently we have seen few microfinance banks have merged with commercial banks cause they were unable to beat competition given rising fintech.

  3. Please do some detailed research before articulating your thoughts about such an important industry !!!

  4. It’s too bad to check your article late. I wonder what it would be if we met a little faster. I want to exchange a little more, but please visit my site.
    온라인 카지노
    j9korea.com

Comments are closed.

Popular Posts