In a historic move, InfraZamin Pakistan, Kashif Foundation, and Arif Habib Limited have come together to introduce Pakistan’s first-ever ‘AAA’ rated ‘Gender Bond,’ valued at Rs. 2.5 billion. This pioneering initiative aims to revolutionize the bond capital market by providing institutional investors with a unique opportunity to support women-led development projects.
The Collaborative Effort: InfraZamin Pakistan and Kashif Foundation Join Forces
InfraZamin Pakistan, a licensed non-banking financial institution (NBFI) and credit guarantee provider, has joined hands with Kashif Foundation, a Section 42 company and licensed microfinance institution, to bring this groundbreaking ‘Gender Bond’ to institutional capital market investors. By combining their expertise, these organizations aim to empower women and foster gender equality in Pakistan.
Promoting Financial Inclusion: Impacting 30,000 Women from Low-Income Households
This groundbreaking bond will exclusively allocate all its proceeds to Kashif Foundation’s microfinance lending portfolio, supporting approximately 30,000 women from low-income households in developing micro-infrastructure. Kashf Foundation has a rich history of empowering women and women-led businesses through its microfinance platform, serving over 700,000 active women clients and disbursing over 6.6 million loans to women micro-entrepreneurs. The bond proceeds will fortify Kashif’s balance sheet and provide much-needed commercial capital to women from underprivileged backgrounds, enabling them to pursue entrepreneurial aspirations, rehabilitate homes, and expand schools and small businesses.
Arif Habib Limited as the Arranger: Pakistan’s First ‘Gender Bond’
Arif Habib Limited, a leading financial services firm, serves as the arranger for this historic bond. With their extensive experience and expertise, they are playing a crucial role in facilitating the launch of the ‘Gender Bond’ and promoting gender inclusivity in Pakistan’s capital market.
A 3-Year Journey: Key Features of the Gender Bond
The ‘Gender Bond’ will raise Rs. 2.5 billion through an initial private placement, followed by an over-the-counter (OTC) listing, making it accessible to a wide range of capital market participants. It carries a credit guarantee from InfraZamin, providing full protection of the principal amount and partial protection for interest installments. With a long-term credit rating of ‘AAA’ and ‘A1+’ by PACRA, the bond is attractively priced at 3-month Kibor + 1.50% spread.
A Catalyst for Economic Growth: Empowering Women for Financial Independence
The ‘Gender Bond’ opens doors for women to achieve financial independence, build their financial capabilities, and make valuable contributions to Pakistan’s economic growth and productivity. This groundbreaking initiative not only promotes inclusivity and diversity but also nurtures the development of the bond capital markets. InfraZamin’s unwavering 100% principle guarantee, coupled with a partial interest guarantee, offers complete comfort and protection to investors against default and credit risks. This critical risk mitigation factor encourages private institutional investors to support Kashif Foundation and bolster its balance sheet.
Regulatory Support: SECP’s Facilitation and Recent Amendments
Kashf Foundation, InfraZamin Pakistan, and Arif Habib Limited express their gratitude for the support and facilitation extended by the Securities Exchange Commission of Pakistan (SECP) in launching this transformative product in Pakistan’s bond markets. Recent amendments by the SECP have further facilitated risk mitigation by granting an 85% exemption to NBFCs for exposures against InfraZamin’s guarantees, aligning with the State Bank of Pakistan’s exposure exemptions for commercial banks.
Leaders’ Vision: Pioneering the Way Forward
Maheen Rahman, CEO of InfraZamin Pakistan, expresses excitement about being part of Pakistan’s first ‘Gender Bond’ transaction and acknowledges Kashf Foundation’s pioneering vision for women’s empowerment. She emphasizes the significance of this transaction in raising commercial capital for female empowerment and financial inclusion while propelling the development and growth of the capital market.
Roshaneh Zafar, Managing Director of Kashf Foundation, highlights the collaboration’s impact on the financial sector and the acceleration of financial opportunities for women entrepreneurs through the introduction of the first-ever ‘Gender Bond’ in Pakistan’s capital market. By expanding access to affordable finance for more women-led businesses, this initiative will create employment opportunities and fuel sustainable economic growth in the country. Zafar hopes that this landmark transaction will inspire other organizations and stakeholders to prioritize women’s economic potential and aspirations.
Shahid Ali Habib, CEO of Arif Habib Limited, expresses delight in launching Pakistan’s first ‘AAA’ rated ‘Gender Bond.’ With its focus on economic empowerment and financial inclusion for women, this bond plays a crucial role in Pakistan’s sustainable development. Habib commends InfraZamin Pakistan for leading the promotion of private sector infrastructure projects and providing complete risk protection to bondholders of Kashf Foundation.
A Bright Future: Unleashing the Power of the Gender Bond
The ‘Gender Bond’ has already been launched in the marketing phase, with subscription expected to be completed by July, pending the necessary approvals from the SECP. This transformative initiative promises to reshape Pakistan’s financial landscape, contributing to women’s empowerment, inclusive economic growth, and the development of the bond capital market.