Sindh Microfinance Bank Limited has been allowed to start its microfinance banking business at provincial level in Sindh after a licence was awarded to its management for meeting paid-up capital requirement of Rs 750 million.
As per plan, the microfinance bank status will be elevated to national level from provincial level within next one to two years with the enhanced performance and subsequent regulatory approval.
Sindh Microfinance Bank now becomes the 11th Microfinance Bank to operate in the country. In Pakistan, nine (9) Microfinance Banks are already operating on nation-wide scale whereas one MFB is operating at province level. To name a few are Tameer Microfinance, U Microfinance and Waseela Microfinance.
The management of Sindh Bank which was working to set up microfinance bank delayed its establishment which was initially supposed to commence its operations by the end of third quarter of 2015, or by end of 2015.
Sindh Microfinance Bank is fully owned by Sindh Bank Limited; which also operates Sindh Modaraba, Sindh Leasing Company and Sindh Insurance Company. Interestingly Sindh Bank has still not listed itself on Pakistan Stock Exchange.
Sindh Bank Limited made a profit of Rs 874 million by September 2015-end. It has some 225 branches throughout the country.
The commencement of business of Sindh Microfinance Bank Ltd. will result in a significant increase in the market share of regulated microfinance banks (MFBs) within the overall microfinance sector. This will also lead to the increased provision of inclusive micro-finance and related financial services to the less-privileged and unbanked segments of the society.
The launch of Sindh Microfinance Bank will also intensify competition among microfinance banks in the coming months though there is a big market for every player to explore in urban and rural areas of Sindh in specific and Pakistan in general.