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KARACHI: HBL Microfinance Bank (HBL MfB) has signed a Risk Sharing Agreement (RSA) with the International Finance Corporation (IFC), a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets.
The facility, which is supported by the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP), will allow HBL MfB to share 50 percent of the risk on its microfinance loan portfolio of up to $80 million with IFC on an unfunded basis. The collaboration aims to enhance access to finance for smallholder farmers and microenterprises across the country, with a strong focus on women entrepreneurs.
“This RSA is another milestone, reinforcing the Bank’s legacy of innovation and leadership in addressing the evolving financial needs of underserved communities,” HBL said in a statement. 
“By being the first microfinance bank to establish an agreement on such a scale, HBL MfB is not only pushing boundaries but also redefining industry standards, ensuring that microfinance remains a catalyst for empowerment and economic growth.”
HBL said the RSA exemplified the bank’s approach toward leveraging strategic partnerships to strengthen financial resilience, expand lending capabilities, and maintain sustainable growth.
“This partnership with IFC is a testament to our commitment to financial inclusion. The facility serves as a replicable model for strategic partnerships that mitigate market challenges while driving sustainable development,” Amir Khan, President and CEO HBL Microfinance Bank, said in a statement.
“By pioneering this Risk Sharing Facility in the microfinance sector, we are ensuring that underserved segments of the society — especially small business owners and farmers, particularly women, have access to the capital they need to thrive. We are thankful to IFC for their trust in us and look forward to the growth and progress it will bring for underserved Pakistanis.”
Momina Aijazuddin, Regional Head of Financial Institutions Group at IFC, said boosting access to finance, especially for smallholder farmers, small businesses and women, could be a “gamechanger” in Pakistan. 
“With this in mind, IFC is excited to support this pioneering risk sharing facility which aims to de-risk HBL MfB’s on-lending activity to its microfinance clients and support critical growth opportunities in agriculture, entrepreneurship, and women’s empowerment,” Aijazuddin said. 
“This agreement will accelerate financial inclusion, and further HBL Microfinance Bank’s mission of creating a more inclusive and resilient financial ecosystem in Pakistan.”
Despite challenging macroeconomic conditions, microfinance banks (MFBs) have continued to expand their outreach to the low-income population of Pakistan. Although MFBs account for only 1.3 percent of total financial sector assets, they have a broad customer base. Over the past five years, MFBs’ total assets grew by an average of 19.1 percent annually, according to government data. 

RIYADH: A $48 million investment in Valuable Capital, led by Public Investment Fund-backed ewpartners, will soon expand the Saudi fintech sector, revealed a top official from the funding firm.

Speaking to Arab News on the sidelines of the PIF Private Sector Forum taking place from Feb. 12-13 in Riyadh, co-founder and Managing Partner of ewpartners Jessica Wong explained that the amount would be utilized in the company’s initial public offering route. 

The investment aligns with the Kingdom’s Vision 2030 goals of advancing fintech development and economic diversification, with the industry expected to contribute 4.4 percent to the Kingdom’s gross domestic product, according to a statement. 

Valuable Capital Financial Co., a subsidiary of Hong Kong-based financial institution Valuable Capital Group Ltd, received a license in 2022 from Saudi Arabia’s Capital Market Authority to provide custody, advice, and dealing services in the Kingdom. 

“We invested in this company three and half years ago, and this time, we continue. We launch a new product, targeting $1 billion, and we continue to invest in this company and kick off their IPO procedure,” Wong said. 

“It will be in the company’s IPO route to support the company, not just kick off the IPO procedure in the target market, but also for further expansion in the GCC (Gulf Cooperation Council) region,” she added. 

The co-founder explained the importance of PIF’s support in enabling their role in the local market, citing how their initial partnership laid the foundation for future investments.

“The reason we will be able to play a significant role and also to focus on the most critical sectors here in the local market is because, you know, five years ago, PIF is playing the role as our anchor LP (limited partner) of our first regional focus, a fund here in the GCC with a $400 million and through the fund, we invest a portfolio company like a Valuable Capital,” Wong said.

“Because our performance is to exceed our expectation, we will be able to launch our second fund, which is also targeting $1 billion,” she added. 

During the interview, the managing partner also tackled the rise of fintech in the Kingdom.

“Seven years ago, when we first launched this platform to serve the local growth and expansion, actually we identify ourselves as the co-builder of the local ecosystem, and we have invested across different sectors like digital infrastructure, digital enablement and also cross-border service and beyond,” Wong said.

“Fintech, in our eyes, is one of the most important sectors to support the local ecosystem growth in a more sustainable and more healthy way,” she added.

“This is one of the perfect examples how, as a one of the PIF portfolio, we invest in a particular sector, double the commitment and support its fast growth and also leveraging more FDI (foreign direct investment) and more know-how to support the company, play a bigger role in the global market and build themselves as another successful story,” Wong said.

The managing director used the interview to shed light on some updates regarding the KSA-Sino Logistics Special Economic Zone. 

“This is one of the projects we have been working on for more than five years. Last October, we were able to sign the MOU (memorandum of understanding) together with our strategic partner, which is King Salman International Airport. So, through this framework of our cooperation, we are working very closely with KSIA, the company itself, to make sure that we will be able to build a platform not just for ewpartners portfolio but also for all the ecosystem players, those who are looking to enter Saudi market as a hub or for their global expansion,” she said.

“The pressure is to come from (a) different angle. One of the biggest motivations for us to continue our work and put together our effort is because there is a huge demand here in the market,” the managing partner added.

Wong also said: “So, our project inside the new expansion of the airport will be one of their top choices, and we’ve already received a lot of requests to further discuss when we can launch and upper running service them, and hopefully, we will start the construction this year.”

Now in its third year, the forum — which united more than 90 PIF-backed companies — aims to strengthen supply chains, boost local manufacturing, and accelerate economic diversification under Vision 2030.