LAHORE-InfraZamin Pakistan, a licensed NBFI and credit guarantee provider, in partnership with Kashf Foundation, a not for profit and licensed microfinance institution, have 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, establishing our commitment to market development and economic opportunities for women.
The Gender Bond which was launched earlier this year to capital market investors has been fully subscribed to the tune of PKR 2.5 billion. The Bond was launched by Kashf Foundation and fully credit wrapped by InfraZamin Pakistan thereby safeguarding 100% 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 (similar to the State Bank of Pakistan’s exposure exemptions to commercial banks) 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 ~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.
Maheen Rahman, CEO - InfraZamin Pakistan, said, “We are very pleased to have supported Kashf in the groundbreaking initiative. It is vital for our economic progress to enhance women’s financial capacity, employment and independence and with this Gender Bond we have achieved all three. The funds raised are all from commercial investment entities and will be redirected towards enhancing Kashf’s balance sheet towards additional microfinance lending that will greatly improve the lives of women and their families in rural areas. Our credit enhancement was key towards attracting such capital and we look forward to continue to work with the market to bring new products to encourage the marketability of under-served sectors of the Pakistan economy.”
Roshaneh Zafar, Managing Director - Kashf Foundation, said, “The introduction of the pioneering Gender Bond in the capital market, not only empowers women entrepreneurs but also stimulates economic growth. We express our gratitude to InfraZamin for their crucial role as a guarantor, which greatly enhanced investor confidence. This groundbreaking initiative serves as a powerful example for other organizations to prioritize and harness the economic potential of women. Kashf Foundation is elated by the overwhelming subscription of the Gender Bond and extends heartfelt appreciation to all institutional investors who have demonstrated their unwavering faith in this endeavor. This achievement will make a significant contribution to sustainable economic growth in our country and establish a compelling business case for investing in women.”
Lauding the launch of Gender Bond, Mr. Farrukh H. Khan, MD & CEO, Pakistan Stock Exchange, stated, “On behalf of Pakistan Stock Exchange, I warmly felicitate and welcome the launch of the first Gender Bond in Pakistan. Apart from providing financial products & services, capacity building, micro-insurance, and social advocacy intervention, Kashf Foundation’s issuance of the first Gender Bond in Pakistan, in line with SECP’s Gender Bond Guidelines, will go a long way towards financial empowerment and inclusion of women.
PSX, as a signatory of UN’s Women’s Empowerment Principles and a participant of UN Sustainable Development Goals and ESG, would welcome to list future Gender Bonds on its debt market through PSX’s state-of-the-art book building system, which provides greater outreach in terms of investors and competitive pricing for issuers. I congratulate not only Kashf Foundation for bringing forth this innovative debt instrument but also the bond’s Guarantor Infrazamin & the Lead Advisor Arif Habib Limited for helping to successfully structure and issue this debt security for micro infrastructure finance loans directed towards the welfare of women through entrepreneurship, business support, flood-rehabilitation, education and home rehabilitation. Infrazamin’s lead role as the sponsor of this bond must be appreciated as this is also Pakistan’s first gender based credit enhanced bond to come to the market”.
InfraZamin Pakistan’s pioneering efforts in bringing South Asia’s and Pakistan’s first Gender Bond to market reflects our steadfast commitment to developing Pakistan’s infrastructure through private investments. We are dedicated to leveraging the power of financial instruments like this Bond to drive positive change and economic growth in the country. Our collaboration with Kashf Foundation stands as a testament to the potential of private sector-led projects in shaping a more inclusive and empowered future for all. We extend our heartfelt gratitude to the Securities and Exchange Commission of Pakistan (SECP) for their invaluable support in bringing this transformative initiative to fruition.