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M-CRIL's Microfinance Rating - Risk Assessment - Urban Poverty Alleviation Program (UPAP) of NRSP

How does Pakistan's urban poverty alleviation program fare in M-CRIL's rating?
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This 'M-Cril Microfinance Rating-Risk Assessment' of the 'Urban Poverty Alleviation Program' (UPAP) of Pakistan recommends the program for its high safety and good systems and assigns it a composite grading of alpha minus.

The report analyzes the following aspects of UPAP:

  • Organizational profile;
  • Operational highlights of the microfinance program;
  • Financial ratios.

It finds that UPAP has performed:

  • Well on the managerial front:
    • Professionally trained, committed and stable managerial cadre;
    • Very well developed management information system (MIS);
    • Good tracking system for overdues;
    • Well developed financial planning and control systems.
  • Moderately in governance and strategy issues and has:
    • Long years of experience in microfinance;
    • Good second line of leadership;
    • Good expansion strategy;
    • Strong credit culture.
  • Excellently on the financial front, exhibiting:
    • Excellent repayment rate and portfolio quality;
    • Productive deployment of assets in the loan portfolio;
    • Comfortable position on capital adequacy.

The report identifies the following weaknesses in UPAP:

  • Low staff productivity;
  • Lack of full involvement of the board;
  • High operating expenses;
  • Negative profitability.

M-CRIL states that UPAP has tremendous potential to become one of the leading microfinance institutions (MFIs) in South Asia on account of its:

  • Institutional mandate and culture;
  • Overall good performance;
  • A commendable approach to sustainability and self-reliance as well as its growth plans.

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