Microfinance
Empowering Access. Enabling Enterprise.
Microfinance is the foundation of inclusive economic growth. It bridges the gap between formal banking and underserved populations; empowering small entrepreneurs, low-income households, and rural communities with financial access that transforms lives and sustains livelihoods.
At NBFC Advisory & Investment Network, we help visionary investors, institutions, and development partners establish, license, and scale Microfinance entities in Pakistan.
There are two types of Microfinance Structures; Deposit-Taking and Non-Deposit-Taking.
1. Microfinance Bank (Deposit-Taking)
A Microfinance Bank (MFB) is a State Bank of Pakistan (SBP)-licensed institution established under the Microfinance Institutions Ordinance, 2001.
It provides small-scale savings, deposits, and lending services to low-income individuals and small businesses that conventional banks often overlook.
Key Advantage
- Deposit Authorization – legally accept savings, current, and term deposits.
Lending Rights – offer micro-loans for trade, agriculture, and self-employment.
- Public Credibility – full SBP oversight ensures regulatory confidence.
- Diversified Income – earn through both lending and deposit-based products.
- Branchless Banking – operate digitally through mobile and agent networks.
- Inclusive Mandate – align with national financial inclusion and ESG objectives.
Regulatory Highlights
- Licensed and regulated by State Bank of Pakistan (SBP).
- Established under the Microfinance Institutions Ordinance, 2001.
Requires minimum paid-up capital of PKR 1 Billion (for national operations).
- Can operate regionally or nationwide based on capital and SBP approval.
- Eligible to provide deposits, loans, insurance, and remittance services.
Notable Examples
- Khushhali Microfinance Bank
- U Microfinance Bank
- Mobilink Microfinance Bank
- Telenor Microfinance Bank
- NRSP Microfinance Bank
2. Microfinance Institution (Non-Deposit-Taking)
A Microfinance Institution (MFI) is a non-bank entity, often registered as a Section 42 not-for-profit company or NGO, that provides small loans to individuals and micro-enterprises.
MFIs are the social backbone of the microfinance ecosystem, focusing on community empowerment and poverty alleviation rather than deposit mobilization.
Key Advantage
- Simplified Formation – fewer regulatory layers than banking structures.
- Focused Impact – directly support low-income and rural borrowers.
- Donor Accessibility – eligible for Pakistan Poverty Alleviation Fund (PPAF) and other development grants.
- Scalable Pathway – can later transition into an SBP-licensed MFB.
- Operational Agility – concentrate on micro-lending without deposit compliance.
- Social Recognition – attract CSR funding and donor collaborations.
Regulatory Highlights
- Established under Section 42 of the Companies Act, 2017.
- Operates as a non-deposit-taking institution.
- Typically begins with capital or endowment between PKR 10–50 million.
- Oversight may come from donors, PPAF, or Pakistan Microfinance Network (PMN).
- Funding sources include grants, soft loans, and philanthropic support.
Notable Examples
- Akhuwat Foundation
- Kashf Foundation
- Damen Foundation
Why Microfinance in Pakistan: Need, Benefits & Future
Microfinance is where business meets purpose. It empowers millions of hardworking Pakistanis; traders, farmers, and women entrepreneurs; who are ready to grow but remain outside the formal banking system. With over 9 million borrowers and PKR 500 billion in active microfinance portfolios, the sector has proven both profitable and impactful.
Establishing a Microfinance Bank or Microfinance Institution allows you to be part of this transformation; enabling small loans that create jobs, build businesses, and drive sustainable development. Backed by strong regulatory frameworks from the State Bank of Pakistan and SECP, microfinance combines security with opportunity.
The future is digital, inclusive, and community-driven. By building a microfinance entity today, you invest in a sector that uplifts people while delivering steady returns — transforming finance into empowerment and inclusion into enterprise.
Our Role
The NBFC Advisory & Investment Network assists investors, development organizations, and promoters in:
- Feasibility preparation and financial modeling for MFBs or MFIs.
- Regulatory documentation, licensing, and compliance coordination with SBP or SECP.
- Structuring shareholding, governance, and equity capitalization plans.
- Assisting with board formation, Fit & Proper approvals, and institutional readiness.
- Developing credit policies, operational manuals, and technology integration frameworks.
Whether your goal is a deposit-taking Microfinance Bank or a socially driven Microfinance Institution, we ensure your venture is compliant, credible, and built for measurable impact.
Contact us to discuss your microfinance project with Pakistan’s first specialized advisory network for financial institution licensing and structuring.