In a groundbreaking development, InfraZamin Pakistan, a licensed Non-Bank Financial Institution (NBFI) and credit guarantee provider, has joined forces with Kashf Foundation, a licensed microfinance institution and not-for-profit organization, to successfully close South Asia’s and Pakistan’s first-ever ‘Gender Bond.’
This initiative aims to revolutionize financial empowerment and inclusion for women, marking a significant milestone in Pakistan’s capital market.
The Gender Bond, boasting a prestigious long-term AAA rating by PACRA, represents a momentous leap forward for the country’s financial landscape. Launched earlier this year to capital market investors, the bond has been fully subscribed, reaching an impressive amount of Rs. 2.5 billion. Notably, the bond was introduced by Kashf Foundation and received complete credit wrapping by InfraZamin Pakistan, safeguarding 100 percent of the principal along with two interest installments.
This achievement has drawn participation from over 30 institutional investors, underscoring strong private sector investment interest. The joint lead arrangers, including Arif Habib Limited, Bank of Punjab, Bank Alfalah, and Standard Chartered Bank, played a pivotal role in orchestrating the success of the bond, signaling positive indicators for Pakistan’s capital market development. The instrument, attractively priced at 3-month Kibor + 1.50 percent spread for a three-year tenor, is set to be listed on the Pakistan Stock Exchange (PSX).
Crucially, the Gender Bond adheres to the guidelines for issuance set by the Securities and Exchange Commission of Pakistan (SECP), aligning with the UN Sustainable Development Goals and UN Women’s principles for women empowerment. Recent SECP amendments have further facilitated risk mitigation, allowing 85 percent exemption to Non-Banking Financial Companies (NBFCs) for exposures against InfraZamin’s guarantees, among other areas of support for mutual funds.
The raised funds from the Gender Bond are anticipated to fortify Kashf Foundation’s balance sheet, providing essential commercial capital to women from marginalized backgrounds. This infusion of capital will empower around 30,000 women hailing from low-income and rural households, supporting the development of micro-infrastructure.
The financial support will enable these women to pursue entrepreneurial endeavors, rehabilitate homes affected by floods, and expand small businesses and schools. Ultimately, this lending initiative seeks to foster financial independence among women, enhance their financial capacity, and contribute significantly to Pakistan’s economic growth and productivity.
In summary, the successful closure of South Asia’s and Pakistan’s inaugural Gender Bond represents a transformative step towards gender-inclusive finance and economic empowerment, showcasing the collaborative efforts of InfraZamin Pakistan and Kashf Foundation in driving positive change within the country’s financial landscape.
