Circulars/Notifications / Agricultural Credit & Microfinance Department  

 AC&MFD Circular Letter No. 1 of 2020
March 26, 2020

The Presidents/Chief Executives
All Microfinance Banks (MFBs)

Dear Sirs/Madams,


          Please refer to AC&MFD Circular No. 03 0f 2014; whereby revised Prudential Regulations for Microfinance Banks (PRs) were issued.

2.      The coronavirus (COVID-19) has been evolving as a strain to the global economy including that of Pakistan. Therefore, to dampen the adverse effects of COVID-19 and to enable the Microfinance Banks continue to fulfill their role in funding the real economy, following has been decided:

  1. Microfinance Banks (MFBs), upon a written request of an obligor received before 30th June 2020, will defer repayment of principal loan amount by one year; provided that the obligor will continue to service the mark-up amount as per agreed terms & conditions. The MFBs will convey their decision to the obligor within 15 working days after the receipt of the written request. In case, MFBs decide to decline the request of the obligor, they will record reasons for this decision in their response to the obligor. The MFBs will submit the detail about deferments granted by them to their borrowers at the end of each week, as per attached format, to Director, Offsite Supervision and Enforcement Department (OSED), State Bank of Pakistan. The abovementioned deferment will not affect the credit history of the obligor and accordingly will not be reported in the ECIB as restructuring.

  2. The financing facilities of such borrowers, who are unable to service the mark-up amount or need deferment exceeding one year, may be rescheduled / restructured upon their request. If the rescheduling / restructuring is done within 90 days of the loans being past due, such financing facility will continue to be treated as regular and reported in the ECIB accordingly.

  3. The MFBs shall not classify the financing facilities of such borrowers who have requested for deferment [2(i)] or rescheduling / restructuring [2(ii)], unless the payment obligations are past due by 90 days. If the deferment or rescheduling / restructuring is not executed successfully within the specified period of 90 days past due, such financing facilities be classified as “Doubtful” as per prevailing instructions of PRs for Microfinancing.

  4. The aforesaid instructions, specified at 2(ii-iii), shall stand expired on March 31, 2021; and afterwards prevailing instructions on the subject shall be applicable.

3.       Moreover, the aforesaid treatment shall be available for loans which were regular on / or after February 15, 2020 and became non-performing subsequently.

4.       All other instructions on the matter shall, however, remain unchanged.

5.      Please acknowledge receipt.

Encl: Weekly data reporting template

Yours sincerely,


(Noor Ahmed)


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