The Khushhali Microfinance Bank awards announced at the Pakistan Microfinance Network’s 10th Annual Microfinance Conference tell a story of one of the country’s most dramatic banking comebacks. Khushhali Microfinance Bank Limited (KMBL) took home two honours in Karachi: Best Turnaround Microfinance Bank and Best Housing Finance MFB. The awards cap a year in which the bank swung from a Rs3.6 billion loss to a Rs4 billion pre-tax profit, a turnaround worth Rs7.6 billion.
For a lender that serves low-income households, small farmers and micro-entrepreneurs across Pakistan, the recognition matters well beyond the trophy shelf. It signals that one of the country’s largest microfinance banks has stabilised, is lending again with discipline, and is putting affordable housing at the centre of its growth.
What the Khushhali Microfinance Bank Awards Recognise
The two awards were presented at the 10th Annual Microfinance Conference (AMC-X), hosted by the Pakistan Microfinance Network (PMN) in Karachi on October 11, 2026. The conference was organised with the UN Industrial Development Organization under the EU-funded PAIDAR programme, and it drew leaders from across Pakistan’s microfinance sector.
According to the bank, the awards reflected its financial recovery, marked by reduced risk, stronger institutional fundamentals and expanded support for affordable financial services. When the Khushhali Microfinance Bank awards were announced, the bank pointed to housing finance, microenterprise lending and agriculture financing as the three pillars on which it has built its reputation since it was founded by the government in 2000 with Asian Development Bank support.
The Best Turnaround award is the headline honour. Few Pakistani banks have reversed course as sharply as Khushhali did in FY25, and the judges recognised a recovery built on fundamentals rather than one-off gains.
How the Turnaround Was Built
The numbers behind the recovery are striking. KMBL swung to a pre-tax profit of Rs4 billion in FY25 from a loss of Rs3.6 billion in FY24. At the same time, its 90-day portfolio-at-risk ratio, a key measure of loan quality, fell to 3.8 percent from 6.2 percent. Fewer bad loans and a healthier book gave the bank room to grow again.
Our turnaround has been driven by a strategic effort to de-risk our balance sheet, reduce cost of deposit, improve collection and portfolio quality, and by diversifying our lending book. – Aameer Karachiwalla, President and Chief Executive, Khushhali Microfinance Bank
Karachiwalla said the bank has invested in technology to improve credit underwriting, set up a dedicated loan verification function and deployed specialised teams to strengthen collection and recovery. The figures explain why the Khushhali Microfinance Bank awards went to KMBL this year: the approach pairs tighter risk controls with a deliberate push to diversify lending, so the bank is not dependent on any single segment.
The result is a lender that is once again able to expand credit to the households and small businesses that mainstream banks often overlook. That is the core purpose of microfinance, and it is why the turnaround award resonates across the sector.
Housing Finance Powers the Khushhali Microfinance Bank Awards Story
The second honour, Best Housing Finance MFB, reflects where Khushhali’s growth is now concentrated. Low-cost housing remains a strategic priority for the bank in 2026. It reported a 47 percent rise in housing borrowers and a 56 percent expansion in its housing portfolio during the year, with total housing and home-improvement disbursements reaching Rs21 billion as of September 2026.
The bank has also been an active partner in government-backed housing schemes. That housing momentum is a big reason the Khushhali Microfinance Bank awards included the Best Housing Finance honour. Under the Mera Pakistan Mera Ghar scheme, launched in 2021, KMBL disbursed 2,103 loans totalling Rs3.31 billion. Under the Wazir-e-Azam Apna Ghar scheme, it approved 437 loans and disbursed about Rs945 million to low-income households as of September 2026.
For families moving from rented rooms or informal settlements into homes of their own, a small housing loan can be life-changing. Khushhali’s housing push connects directly to Pakistan’s wider affordable-housing effort, including award-winning programmes such as Apni Chhat Apna Ghar, which earned UN-Habitat recognition.
What Comes Next: Capital Repair and the Road Ahead
The Khushhali Microfinance Bank awards celebrate real progress, but the bank’s balance sheet still needs repair. Shareholder United Bank Ltd won approval to inject up to Rs22 billion to strengthen the lender’s capital. UBL shareholders approved the injection on August 24 through a discounted rights issue at Rs2 a share against a Rs10 face value.
UBL’s disclosure put Khushhali’s equity at about negative Rs16.15 billion at the end of December 2025, below the State Bank of Pakistan’s minimum capital requirement, and said the central bank had directed the bank to make up the shortfall. The bank’s award statement did not address its capital position, but the planned injection shows the sponsor standing behind the turnaround. Even as the Khushhali Microfinance Bank awards recognise progress, the capital repair remains the bank’s most important unfinished job.
The road ahead will test whether the bank can hold its improved loan quality while it rebuilds capital. Key things to watch include:
- Whether the portfolio-at-risk ratio keeps falling as the loan book grows.
- How quickly the UBL capital injection restores the bank to full regulatory compliance.
- Whether housing finance keeps growing at its current pace under the government schemes.
- Whether the bank can keep its cost of deposits down while it expands lending.
Why It Matters for Financial Inclusion in Pakistan
Microfinance is one of Pakistan’s most important tools for financial inclusion. Millions of households and small businesses rely on microfinance banks for credit, savings and a first step into the formal financial system. When a lender of Khushhali’s scale recovers, the benefits flow to borrowers in villages and urban neighbourhoods alike.
The turnaround also comes at a moment of broader momentum in Pakistan’s financial sector. The Khushhali Microfinance Bank awards also signal that the sector’s recovery is being noticed at home. Investor confidence is returning, with the stock market drawing record numbers of new investors, and Pakistan’s digital economy earning global recognition, including a top-five ranking for digital services from the World Bank. A stronger microfinance sector fits that picture of a financial system modernising from the top down and the bottom up.
Khushhali’s story is a reminder that turnarounds are possible when institutions focus on fundamentals: cleaner books, better technology, disciplined lending and products that meet real needs. In short, the Khushhali Microfinance Bank awards show that two trophies in Karachi reflect something deeper, and the bank’s borrowers stand to gain the most.
Sources
- The News: Khushhali Microfinance Bank bags turnaround, housing finance awards
- LHR Times: Khushhali Wins Turnaround Award As UBL Readies Rs22bn Capital Boost
- Trade Chronicle: Khushhali Microfinance Bank secures two awards at PMN conference
- Khushhali Microfinance Bank: Awards and Achievements
Photo: The News
Umar is an engineer by profession and a passionate writer by passion. He has a deep interest in sharing good news related to Pakistan and has been working hard to promote the positive image of his homeland. Umar has written numerous articles on various topics related to Pakistan, such as technology, sports, culture, and economy.