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.
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? Note: Access to the full article is limited to paid subscribers only. If you are already a paid subscriber, please Login here Otherwise, you can choose to purchase a subscription package below for as low as Rs 275/month:
