This! The signs of deep rot setting in
My dream to see a Baakistan as dusty barren wasteland where corpses lie unheeded and mere skeletons walk like zombies unable to even walk will happen.
https://www.dawn.com/news/1837227/navig ... ent-waters
Navigating turbulent waters
Select quotes.
Pakistani microfinance banking sector has not fared well lately. It’s been five years since the industry’s fortunes began to change on the back of heavy net losses and a spike in bad debts — some big enough to wipe off all of the equity in certain cases
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Similarly, the number of active borrowers reached a fresh peak of 9.4 million, thanks to continuous growth in individual lending. This is part of the industry’s broader shift towards nano finance led by telco-backed players like JazzCash and Easypaisa that began in 2021
According to the former, microfinance banks (MFBs) incurred a loss after tax of Rs8.1bn in 2023, making it the fifth straight year of negative net income. During the last 20 quarters, there has been only one period when MFBs didn’t post a loss, and that too was a solitary profit of Rs101m.
For example, HBL Microfinance, which boasts the largest gross loan portfolio (GLP), has received capital injections worth Rs10bn from sponsors in the last couple of years, including Rs6bn announced just a few weeks ago.
Notes:
- A large swell in the number of people applying for microfinance
- NPAs are increasing . Almost 19 Qtrs of losses means microfinance companies are struggling with customer repayments
- If customers arent repaying, it means revenue at grass roots level is dwindling.
- if companies cant get RoI , more cash injection is needed
Consequences;
- Microfinance companies rely on cash injection to sustain this business.
- At some point, it will dry up.
- At that stage avg Abduls will be left nowhere to go.
