Annual Report 2016 Celebrating Success Contents Highlights 2016 01 Innovative Financial Solutions 06 About Mobilink Bank 17 Board of Directors 21 Management Team 23 Vision, Mission & Values 27 Our Products 29 Branch Network 31 Five Year Journey 33 Empowering Businesses: The Story of Deen Muhammad 39 Director’s Report 42 CEO’s Message 45 Chief Digital & Financial Services Officer’s Message 47 Auditor’s Report 49 Financial Statements 51 Notes to Financial Statements 56 Highlights 2016 Earnings Per Share 1.59 Return on Assets (ROA) 2.4% Return on Equity (ROE) 20.7% PAR 0.04% Active Borrowers 91,747 Avg. Outstanding Loan Size 64,677 No. of Depositors 8,121,382 No. of Locations 51 Number of Employees 751 No. of Branchless Banking Agents 69,780 page 1 The Power of Progress Mobilink Microfinance Bank “A/A1” Credit Rating By PACRA page 2 Mobile Account *786# page 3 100 100 PAYMENTS MOBILE LOAD Rs. SAVINGS & INSURANCE SEND MONEY ATM CARD PAY BILLS page 4 page 5 Innovative Financial Solutions Drivers of Growth & Success Our innovative financial solutions include a diversified range of products and services such as Domestic Remittance, International Remittance, G2P Disbursements, Utility Bills Payment, Inter-Bank Fund Transfer (IBFT), Pre & Post-Paid Top-Ups, Real time Fee/Loan/Donation/Insurance/Passport/ Tickets Payments, Digital Account opening through bio-metric verification, Loans Disbursements, CASA/TDR accounts, Bankers Cheques and Running Finance. These services are accessible through both Branch and Branchless Banking Platforms, and can be accessed real time through Branchless Banking, Over-the-Counter, Internet Banking, Mobile Application, CCDMs/ATMs/POS/Other-ADC Channels. Our financial solutions have transformed the microfinance industry in Pakistan. In the last five years we have introduced a diversified portfolio of financial products and spearheaded the launch of a cutting-edge branchless banking service under the brand JazzCash making us a leading player in technology driven microfinance solutions in Pakistan. page 6 Pakistan’s Largest Digital Bank page 7 page 8 First Microfinance Bank to Introduce page 9 page 10 CCDM Cash & Cheque Deposit Machine page 11 page 12 Internet Banking & Mobile Banking App page 13 page 14 Visa Debit Card Visa Classic QURAT-UL-AEIN page 15 Visa Classic QURAT-UL-AEIN * Coming Soon page 16 About Mobilink Bank With over 11 million mobile wallets, Mobilink Bank has become Pakistan’s largest digital bank in a short span of 4 years. Mobilink Microfnance Bank, formerly Waseela MF Bank, a Global Telecom - VEON Group company, started operations in April 2012 and launched branchless banking operations under the brand name ‘Jazzcash’ in partnership with Pakistan's largest telecom operator ‘Jazz’ in November 2012. Being a hybrid model, that combines traditional microfnance with mobile / digital banking and agent based banking, the bank now operates with 51 branches, a nationwide network of 70,000 branchless banking agents and a USSD (GSM) based digital channel ofering savings, micro-enterprise loans, small housing loans, remittances, collections (of utility bills and loan instalments), mobile wallets, insurance, G2P, B2B & B2P payments, the bank currently plays a leading role in the promotion of fnancial inclusion. Despite being a young bank, Mobilink Bank has emerged as a front page 17 runner in the sector, having achieved fnancial break-even within four years of commencement of operations, one of the fastest in the industry. Mobilink Bank & Jazz, under the brand of Jazzcash, envision to become market leaders in digital fnancial services. Due to rapid increase in the smartphone user base in the country, distinction between traditional and mobile fnancial services is rapidly diminishing. Therefore, the Bank continues to invest in technology and systems to maintain it’s lead in digitalization of fnancial services. Mobilink Bank’s strategy is to take banking from the confnes of a limited number of brick and mortar structures to customers’ cell phones thereby removing a major barrier in expanding coverage and outreach, signifcantly increasing access to fnancial services such as savings, loans, insurance and transactional services. page 18 2012 • Opened frst branch on May 2, 2012 • Pilot launch of branchless banking on May 31, 2012 • Commercial launch of branchless banking on November 5, 2012 with brand name Mobicash. • Opened four branches and six service centers • Ended year with Rs. 112 Million deposit with 8,655 depositors • Ended year at GLP of Rs. 6.5 Million • Branchless banking agents reached to 5,030, had 5,885 home remittance transactions and 62,375 Utility Bill Payments. 2013 • 0pened 26 new branches, reaching a total of 30 • Ended the year with deposits of Rs. 644 million (573.9% increase from 2012) and 66,279 depositors • GLP closed at Rs. 178 Million • Jazz Cash agents reached a count of 26,578, 2.51 million remittance transactions and 5.5 million Utility Bill Payments. 2014 • Opened 8 new Booths • Launched Interbank Fund Transfer (IBFT) service in November 2014. • Launched ATM card on May 02, 2014 and installed its frst ATM machine on July 07, 2014. • Closed deposits at Rs. 1.3 Billion with 311,748 depositors • GLP was closed at Rs. 500 Million • Jazz Cash agents reached to 49,586 with 15.8 million remittance transactions 9.314 million utility bill payments. page 19 2015 • MMBL launched Banca assurance for its customers • Closed its deposit at Rs. 3.2 Billion with 3.2 Million depositors • GLP was closed at Rs. 1.4 Billion • Jazz Cash agents reached to 58,818 with 28.4 Million remittance transactions and 2.2 Million Utility Bill Payments. • Launched international remittance services on August 18, 2015. • Launched savings account products for mobile wallet accounts in August 2015. 2016 • Opened 05 new branches & 8 new booths in 2016 with total number of branches reaching 35 with 16 booths. • Launched NFC payments for mobile wallets in March 2016 • Re-branded from Waseela Microfnance Bank Limited to Mobilink Microfnance Bank Limited in May 2016. • Launched Internet Banking services In November, 2016, being the frst MFB to ofer these services. • Started disbursement of loans straight to mobile wallets in November 2016. • Closed its deposit at Rs. 10.3 Billion with 8.12 Million depositors • GLP was closed at Rs. 5.9 Billion • Jazz Cash agents reached to 69,767 with 36 Million remittance transactions and 4.5 Million Utility Bill Payments page 20 Board of Directors: Aamir Hafeez Ibrahim Director / Chairman A highly motivated leader with the proven ability to develop organizations and drive revenues. Mr. Ibrahim possesses vast cross-functional experience that encompasses strategic marketing & sales, stakeholder management and corporate strategy. His track record includes successful leadership roles in Pakistan as well as Thailand, UK, UAE, Switzerland and USA across the telecom and automotive industry. Niaz Brohi Director Presently the Chief Legal Ofcer at Jazz and having previously worked with the Pakistan Telecom Authority, Mr. Brohi, has over 15 years of experience in the telecom sector specialising in regulatory and corporate afairs, litigation and management, due diligence, mergers and acquisitions, risk assessment and advising the board of directors. Muhammad Usman Bajwa Director A corporate fnance professional with over 10 years of experience in treasury and fnancial management. Mr. Bajwa is a qualifed Chartered Financial Analyst (CFA) with a proven record of managing extensive operations, large teams and various types of fnancing, debt and capital transactions. Salim Nooruddin Jiwani Director With over 15 years of experience in policy planning, fnancial management, institutional assessment and transformation of microfnance institutions, Mr. Jiwani believes in poverty reduction and economic empowerment. He has previously served on the Board of Directors of the First Microfnance Bank, Kashf Microfnance Bank and Pakistan Microfnance Network. page 21 Ghazanfar Azzam Director Ghazanfar Azzam is the President and CEO of Mobilink Microfnance Bank Limited. He has vast experience and exceptional achievements to his credit in retail, commercial, consumer, SME and micro-banking segments. In a career spanning over 30 years, Ghazanfar has worked for some of the best banks in Pakistan including HBL, Union Bank, Prime Bank & Bank Alfalah in retail, commercial, consumer, SME Banking and Training & Development. In recognition of his contributions to HR Development in banking industry, he was awarded the prestigious Hubert Humphrey Fellowship by the United States Government for the year 2000-01 under Fulbright Program. He has attended advanced seminars and management development programs at LUMS, World Bank Institute in Washington DC and Harvard Business School. David Leslie Christopher Dobbie Director A young professional having 14 years’ experience in Legal and corporate afairs. He is an expert in International Transactions with specialties in international cross border transactions and mergers & acquisitions. Mr. Dobbie is a graduate from University of Auckland with in Law & Accounting. He is currently working as Deputy General Counsel in Vimpel Com. Azfar Manzoor Director Mr. Azfar is a seasoned professional having 22 years’ experience in the Telecommunication industry. He had done his Electrical engineering from USA & MBA from Lahore University of Management Sciences. He presently is board member of Universal Service Fund and Regional Chair of Massachusetts Institute of Technology. Currently serving