UBank Raises Rs. 600 Million for Seven Years through TFC

U Microfinance Bank Limited (U Bank) — through its Lead Adviser and Arranger Pak Oman Investment Company — has raised Rs. 600 million in the form of Privately Placed Term Finance Certificates (PPTFC) from Banks, DFIs and Asset Management Companies. The PPTFC issue will contribute towards UBank’s Tier II capital.

The purpose of this issue is to strengthen the bank’s capital base, primarily aiding with the Minimum Capital Requirements and Capital Adequacy Ratio as prescribed by the State Bank of Pakistan. This TFC comes with a term of 7 years and will pay profit semi-annually with the principal redemption after a grace period of 5 years, in four equal semi-annual installments.

This is first time that a Microfinance Bank has raised a Term Finance Certificate for Tier 2 capital. UBank said that its a milestone and ground breaking transaction for Pakistani Microfinance industry.  U Microfinance Bank Ltd. (U Bank) is a wholly owned subsidiary of Pakistan Telecommunication Company Limited (PTCL). The bank has a network of 76 touch points, across 70 cities and rural areas in Pakistan and offers a wide range of microfinance loans, deposit products and branchless banking solutions.

U Bank’s branchless banking offers services under the banner of UPaisa in collaboration with Ufone (Pak Telecom Mobile Limited). The service is offered at nearly 45,000 agent locations across Pakistan.