Rating Resources

Microfinance sector in Pakistan started with an intention to financially facilitate the underprivileged. Initially these institutions were mostly funded by multilaterals and international NGOs. However, recently the sector has evolved into a more sustainable business model, performing similar function to a commercial bank, while staying true to its mandate of providing financial assistance to the poor. However, these hybrid institutions still remain highly susceptible to the changing business environment, due to the micro exposure of these institutions.
Overview

The concept of Joint Ventures Financial Institutions (JVFIs) was introduced in Pakistan in late 1970s. Currently there are seven JVFIs operating in Pakistan with the broad objective of promoting economic development in the country, by supporting both industrial and service sector projects. However, deviating from the objective, JVFIs are facing many challenges on the back of intense competition from commercial banks. Furthermore, political intervention both at board and management level, limited funding sources, and absence of a separate regulatory framework are key challenges for the sector.
Overview

The growth of economy is closely linked to soundness of its banking system. The Banking sector in Pakistan dominates the financial system and its assets are equal to ~38% of GDP. Risk-averse appetite continues to prevail in the domestic banking industry. While reflecting the challenging domestic economy, this signifies the limited incremental credit demand from the business community. Consequently, the additional liquidity mobilized through deposits, as enabled by increasing remittances and inherent money velocity, is being deployed in government securities.
Overview

Pakistan’s economy has continuously registered growing energy requirements over the years. The country’s energy mix mainly comprises oil, gas, coal and liquefied petroleum. Of these oil and gas contribute 80% of the country’s total energy supplies. The country currently meets 16% of the crude oil demand from the indigenous sources and is highly dependent on import of oil and petroleum products. The transport sector is the largest consumer of petroleum products in the country, followed by power generation and industrial sectors.
Overview
Sector Study

With the evolution of societies electricity has gradually become a necessity for development of nations. Pakistan, being a developing country, is struggling to meet the growing demand emanating from growth in population, electrification of villages, and other technological advancements. Despite available capacity to generate electricity, Pakistan remains supply deficient.
Overview
Sector Study

The study presents an objective appraisal of the performance of PACRA’s ratings as per two parameters – stability and accuracy. The period under review in the study is highly significant as it encompasses the peak and trough of an entire business cycle in Pakistan, hence, presenting an enlightening case study into the correlation of credit quality with the economy.
Details