The microfinance industry has been at the centre of some intense debate lately and have been labelled as “zombie banks.” They are different from commercial banks in terms of minimum liquidity adequacy requirements, collateral and the size of loans they can make. Their customer base is also very different from conventional banks and most, if not all, run a branchless operation. This and more, has made microfinance banking a very tough business in Pakistan. Barring a few, all microfinance banks are loss-making entities. However, it seems a new approach to microfinance banking may have worked, at least for the time being. An overly aggressive approach.Â
This is where U Microfinance Bank (UBank) comes in. Not only has UBank managed to achieve profitability, but it has also seen its balance sheet grow threefold in the year 2022. In the midst of the industry’s turmoil, UBank managed to navigate the challenges, and have thrived. But is it fair to call it a microfinance bank? 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.To read the full article, subscribe and support independent business journalism in Pakistan
