Credit Rating Agencies of Pakistan

Credit rating business in Pakistan is dominated by two agencies i.e., Pakistan Credit Rating Agency
(PACRA) and JCR-VIS. Both Agencies offer almost similar services and are also endorsed by State Bank of
Pakistan (SBP) and Securities and Exchange Commission of Pakistan (SCEP).

1. PACRA
Credit rating culture in Pakistan was pioneered by PACRA. In 1994, Pakistan Credit Rating Agency
(PACRA), was established as a first credit rating agency of Pakistan. PACRA has provided
hundreds of ratings comprising of financial institutions rating, corporations and debt ratings.
Credit Rating Process of PACRA is shown in this picture.
 2. JCR-VIS
Though it was established in 1997 with the name of DCR-VIS, in 2001 DCR sold its share to VIS
and JCR acquired % of DCR-VIS, so its name was changed from DCR-VIS to JCR-VIS. Now it is a
joint venture of JCR, VIS , KSE and ISE. Credit Rating Process of JCR-VIS is shown in this picture.

Both of these agencies provide services like Entity Ratings, Instrument Ratings, Real State Grading,
Indicative Ratings and International Services. For a rating agencies, two main streams of business are
Entity Rating and Instrument Ratings which is offered by these both agencies. In Entity Ratings, these
both agencies rate Commercial Banks, Development Financial Institutions, Investment Banks, Leasing
Companies Modarabas, Security Firms, Housing Finance Companies, Mutual Funds, Asset Management
Companies, Insurer Financial Strength and Industrial Corporations. In Instrumental Ratings, these
agencies offer ratings of Long Term Corporate Debt Instruments and Short Term Corporate Debt
Instruments. JCR-VIS also offers Microfinance Rating which gives it edge over PACRA. JCR-VIS also
provide ratings based on Corporate Governance compliance to SECP and SBP, this gave JCR-VIS first
mover advantage in this area. To rate the real estate agencies and developers, PACRA has collaborated
with NESPAK. Indicative Rating is used by Management of companies to see where their company
stands before going into formal rating review, so it is not made public. For International Service, PACRA
has joined hands with Fitch while JCR-VIS has joined hands with JCR. Both Agencies offer local currency
ratings on international scale as well as national scale.