SBP licenses ASA International subsidiary to start microfinance lending

KARACHI: The State Bank of Pakistan (SBP) said on Tuesday it had granted a license to ASA Microfinance Bank (Pakistan) Limited, a subsidiary of ASA International Group plc, to start microfinance lending business across the country.

The bank, which aims to provide small loans to low-income women entrepreneurs, is the 12th microfinance bank (MFB) regulated by the SBP under the Microfinance Institutions Ordinance 2001, the central bank said in a statement. MFBs have a significant role in promoting financial inclusion and economic growth in Pakistan, as they serve nearly 60 percent of the domestic borrowers in the credit market, the statement said.

"MFBs have approximately three percent share of total advances of the banking system, however; in terms of number of domestic borrowers, MFBs have a share of 58.6 percent, signifying their importance in Pakistan’s credit market, financial inclusion and economy." ASA Microfinance Bank (Pakistan) Limited is expected to increase the market share of MFBs and contribute to poverty alleviation and female empowerment, the SBP said.