Press Release

JCR-VIS Reaffirms Entity Ratings of Rozgar Microfinance Bank Limited

Karachi, April 29, 2010: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the rating of Rozgar Microfinance Bank Limited (RMBL) at ’BB-/B’ (Double B Minus / Single B). The ratings will continue to be under ‘Rating Watch – Negative’ status on account of equity (net of losses) being far below the minimum capital requirement of Rs. 100m, as prescribed by the State Bank of Pakistan, due to accumulated losses since inception.

Since the beginning, the bank has been operating with significant control weaknesses arising out from high turnover at both, the management level and in the field, together with lack of infrastructure and absence of adequate information systems. This has been reflected in significant delinquencies in bank’s portfolio, and the bank has retrenched the business activities since July 2008. Revenues earned during the period were unable to cover administrative expenses on account of high provisioning and continued business stagnation.

The bank is incurring losses on continual basis though these are now largely on account of operational expenses, which are also quite minimal. Nevertheless, the bank currently has excess liquidity on its book to cover financial obligation, however, these reserves are depleting constantly. The bank has planned equity injection through issuance of right shares which is currently under process. JCR-VIS will closely watch the development in this respect, and in case, equity injection plans do not materialize and stress on equity continues, ratings may be revised downwards.

For further information on this rating announcement, please contact Mr. Safdar Kazi (Ext: 604) or Ms. Sabeen Saleem (Ext: 510) at 35311861-70 or fax to 35311873.

Faheem Ahmad
President & CEO

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2010 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited