SBP Grants Nationwide Operations Approval to ASA Microfinance Bank

SBP Grants Nationwide Operations Approval to ASA Microfinance Bank

Karachi, November 14, 2023 – The State Bank of Pakistan (SBP) has granted approval to ASA Microfinance Bank (Pakistan) Limited to commence nationwide microfinance lending operations, effective November 13, 2023.

This development positions ASA Microfinance Bank as the 12th Microfinance Bank (MFB) to operate in the country.

ASA Microfinance Bank (Pakistan) Limited, a wholly owned subsidiary of ASA International Group plc., is licensed by the SBP under the Microfinance Institutions Ordinance 2001. ASA International Group plc. is recognized as one of the world’s largest international microfinance institutions, and the entry of ASA Microfinance Bank into nationwide operations is anticipated to have a significant impact on Pakistan’s microfinance landscape.

Microfinance Banks (MFBs) have a vital role in serving a large number of microcredit borrowers and depositors, contributing approximately three percent to the total advances of the banking system. However, in terms of the number of domestic borrowers, MFBs hold a substantial 58.6 percent share, underscoring their importance in Pakistan’s credit market, financial inclusion, and overall economy.

The approval for nationwide operations granted to ASA Microfinance Bank aligns with the broader goal of enhancing financial inclusion and catering to the unbanked and underprivileged segments of society. As part of their international network’s focus on women, ASA Microfinance Bank (Pakistan) Limited is expected to play a crucial role in gender mainstreaming and female empowerment. The institution aims to achieve this by providing small, socially responsible loans to low-income women entrepreneurs, particularly those belonging to less-privileged and unbanked sectors of society.

The strategic focus on empowering women entrepreneurs aligns with the global trend of recognizing the transformative impact of women’s economic participation on overall societal well-being. ASA Microfinance Bank (Pakistan) Limited’s initiatives are anticipated to contribute significantly to poverty alleviation and further the financial inclusion mandate outlined in the Microfinance Institution Ordinance, 2001.

By expanding its operations nationally, ASA Microfinance Bank is poised to increase the market share of MFBs regulated by the SBP within the broader microfinance sector. This move is expected to enhance the accessibility of financial services, create economic opportunities, and foster inclusive economic growth, aligning with the overarching financial inclusion objectives of the State Bank of Pakistan.

The SBP’s approval for ASA Microfinance Bank to operate nationwide signifies a positive step toward strengthening the microfinance sector in Pakistan. ASA Microfinance Bank’s strategic focus on gender mainstreaming and empowerment, coupled with its commitment to socially responsible lending, is expected to contribute significantly to poverty alleviation and financial inclusion in the country.

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