InfraZamin Pakistan, a licensed NBFI and credit guarantee provider, in partnership with Kashf Foundation, a not for profit and licensed microfinance institution, Thursday announced the closing of South Asia’s and Pakistan’s inaugural ‘Gender Bond’ thereby revolutionizing financial empowerment and inclusion for women.
The Bond, which holds a prestigious long-term AAA rating by PACRA, marks a significant leap in Pakistan’s capital market.
The Gender Bond which was launched earlier this year to capital market investors has been fully subscribed to the tune of Rs. 2.5 billion. The Bond was launched by Kashf Foundation and fully credit wrapped by InfraZamin Pakistan thereby safeguarding 100 percent of the principal as well as two interest installments of the Bond. Over 30+ institutional investors have subscribed to the Bond, showcasing strong crowding in of private sector investment.
This substantial participation from non-banking institutional investors, led by joint lead arrangers of the Bond – Arif Habib Limited, Bank of Punjab, Bank Alfalah and Standard Chartered Bank serves as a positive indicator for Pakistan’s capital market development. The instrument is attractively priced at 3-month Kibor + 1.50pc spread for a three-year tenor and will be listed on the PSX.
The Gender Bond fully subscribes to the Guidelines of Gender Bond issuance by Securities and Exchange Commission of Pakistan (SECP) which are based on the UN Sustainable Development Goals and UN Women’s principles for women empowerment. Recent SECP amendments have also facilitated this risk mitigation by allowing 85% exemption to NBFC’s for exposures against InfraZamin’s guarantees along with other areas of support for mutual funds as well.
The Bond proceeds are expected to boost Kashf’s balance sheet, providing much-needed commercial capital to women from an underprivileged stratum. Kashf’s microfinance lending portfolio will be enhanced to provide finance to around 30,000 women from low-income and rural households to develop micro-infrastructure. This will enable them to pursue entrepreneurial aspirations, rehabilitate flood-affected homes, and expand schools and small businesses. Such lending will help women achieve financial independence, develop financial capacity, and contribute towards Pakistan’s economic growth and productivity.