In a noteworthy advancement towards financial inclusivity, InfraZamin Pakistan and the microfinance institution Kashf Foundation recently declared the successful closure of South Asia’s first-ever gender bond. The bell-ringing ceremony at the Pakistan Stock Exchange (PSX) marked a historic moment, as Securities and Exchange Commission of Pakistan (SECP) Chairman Akif Saeed commended the stakeholders for introducing this innovative debt instrument.
A Sugre In Microfinance: Rs2.5 Billion Raised for Continued Lending
Earlier this year, Kashf Foundation, a microfinance institution, launched the gender bond, securing a full credit guarantee from InfraZamin Pakistan. This ensured the complete protection of 100% of the principal along with two interest installments. The substantial support from more than 30 institutional investors, led by joint arrangers like Arif Habib Ltd and Standard Chartered Bank Ltd, underscores the positive trajectory of Pakistan’s capital market development.
Pricing Point and Listing Strategy: Three-Year Tenor On the Horizon
Priced at a three-month Kibor plus a 1.5 percentage-point spread for a three-year tenor, the instrument is poised for listing on the PSX. This pricing structure complies with the Guidelines of Gender Bond Issuance set by SECP, aligning with the UN Sustainable Development Goals and UN Women’s principles for women empowerment.
SECP Revisions and Risk Mitigation: An Integrated Approach
Recent revisions by the SECP play a crucial role in risk mitigation by providing an 85% exemption to non-bank finance companies for exposures related to InfraZamin’s guarantees. This aligns with the State Bank of Pakistan’s exemptions on exposure for commercial banks, promoting a comprehensive approach to support financial institutions and mutual funds.
Transformative Returns: A Gateway to Empowerment
The proceeds from the bond, amounting to Rs2.5 billion, are set to fortify Kashf Foundation’s balance sheet. This infusion of commercial capital will specifically benefit women from underprivileged backgrounds. The microfinance lending portfolios aim to empower 30,000 women in low-income and rural households by fostering the growth of micro-infrastructure and supporting entrepreneurial aspirations.
CEO’s Vision: Women’s Financial Capacity, Employment, and Independence.
InfraZamin Pakistan CEO Maheen Rahman emphasized the crucial role of enhancing women’s financial capacity, employment, and independence in propelling economic progress. The gender bond, a testament to achieving these three vital objectives, serves as a shining example of success in fostering inclusive economic growth.
Closure
In concluding remarks, this collaborative effort through the gender bond emerges as a triumph for empowerment, marking a noteworthy step towards creating a more inclusive and financially empowered society in South Asia.