DEFINITION of 'Credit'

A contractual agreement in which a borrower receives something of value now and agrees to repay it to lender at specified date in the future, generally with interest. The term also refers to the borrowing capacity of an individual or company.

DEFINITION of 'Creditworthiness'

An assessment of the likelihood that a borrower will default on his or her debt obligations. It is based upon factors, such as his/her history of repayment and  credit score. Lending institutions also consider the availability of assets and extent of liabilities to determine the probability of default.

DEFINITION of 'Credit Rating'

An assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation. A credit rating can be assigned to any entity that seeks to borrow money – an individual, corporation, state or provincial authority, or sovereign government. Credit assessment and evaluation for companies and governments is generally done by a credit rating agency such as Standard & Poor’s, Moody’s or Fitch. These rating agencies are paid by the entity that is seeking a credit rating for itself or for one of its debt issues.

JCR-VIS Rating ProcessIssuer/Client 1. Signs agreement for an initial rating

2. Submits preliminary information materialsJCR-VIS 3. Conducts a preliminary study

4. Submits a detailed questionnaire to the issuer/clientIssuer/Client 5. Provides detailed information in response to detailed questionnaireJCR-VIS 6. Conducts pre due diligence meeting analysis

7. Conducts due diligence meetings4 - 5 weeks

JCR-VIS 8. Conducts post due diligence analysis9. Brief for internal rating committee meetings is prepared10. Sub Committee recommends preliminary/initial rating11. Rating Committee decides the preliminary/initial rating12. Discusses the rating rationales and rating issues with client

13. Notifies issuer of the preliminary/initial rating, deliberates on appeals by client, if any

Issuer/Client 14. Consents to release of preliminary/initial rating to the public in case of non-mandatory ratings

JCR-VIS 15. Releases the preliminary/initial rating to the press2 - 3 weeks

 Company Profile Shareholders     Japan Credit Rating Agency, Ltd. - 15.0%     Vital Information Services (Pvt.) Ltd. - 67.5%     Karachi Stock Exchange Limited - 12.5%     Islamabad Stock Exchange Limited - 5.0%

 Joint Ventures & Affiliations     Islamic International Rating Agency - (IIRA)     Credit Rating Information & Services Limited - (CRISL)     Association of Credit Rating Agencies in Asia - (ACRAA)

Company ProfileJCR-VIS Credit Rating Co. Ltd. (JCR-VIS), approved by Securities & Exchange Commission of Pakistan and State Bank of Pakistan, is operating as a ‘Full Service’ rating agency providing independent rating services in Pakistan. JCR-VIS is a joint venture between Japan Credit Rating Agency, Ltd. (JCR) - Japan's premier rating agency, Vital Information Services (Pvt.) Limited (VIS) – Pakistan’s only independent financial research organization, Karachi Stock Exchange and Islamabad Stock Exchange. JCR-VIS is not an NRSRO and its ratings are not NRSRO credit ratings. As per the technical agreement with JCR, JCR-VIS may seek JCR’s assistance on any conceptual and methodology related matter. However, JCR is not represented on the rating committee and JCR-VIS does not seek JCR’s opinion on individual ratings. In January 2001 JCR and VIS entered into a Joint Venture Agreement whereby JCR acquired 15% share in DCR-VIS Credit Rating Co. Ltd. of Pakistan. As a result of this agreement, the name of the company changed from DCR-VIS Credit Rating Co. Ltd. to JCR-VIS Credit Rating Co. Ltd. (JCR-VIS). The DCR-VIS Credit Rating Co. Ltd. was incorporated in 1997 as a joint venture between VIS, Karachi Stock Exchange, Islamabad Stock Exchange and Duff & Phelps Credit Rating Co. (DCR). Subsequent to DCR’s merger with Fitch IBCA, DCR sold its interests in DCR-VIS to VIS. Top Major PromotersJapan Credit Rating Agency, Ltd. - (JCR)

JCR was established in April 1985 by a group of major Japanese institutional investors and was authorized by Japan’s Ministry of Finance (MOF) as a recognized rating agency in 1987. JCR’s rating services cover broad range of financial products including long-term bonds, senior debts, medium-term

notes, and commercial paper for resident and non-resident entities, and multilateral development banks. In addition, JCR rates ability to pay insurance claims for the Japanese life and casualty insurance companies as well as structured financing for both residents and non-residents including asset-backed securities. JCR enjoys a strong support from Japan’s prominent institutional investors. The 109 shareholders include Japan’s major life and casualty insurance companies, all trust banks, 60 of 64 regional banks, The Norinchukin Bank and The Bank of Tokyo Mitsubishi.TopVital Information Services (Pvt.) Ltd. - (VIS)Vital Information Services (Pvt.) Limited (VIS) was incorporated in 1994 with the equity participation of leading financial institutions, the largest publication house of Pakistan (The Jang Group), Mr. Faheem Ahmad and other professionals. The company provides independent capital market research based services to companies, small and large investors, etc.VIS’ major strength is its exhaustive database on corporate Pakistan and ability to perform statistical and financial analyses on this database. VIS has a major interest in a credit bureau - NEWS-VIS Credit Information Services (Pvt.) Ltd.TopKarachi Stock Exchange Limited - (KSE)The Karachi Stock Exchange (KSE) is the premier stock exchange of the country. KSE came into existence in 1947. In 1949, KSE was converted into a company limited. Initially, five companies were listed on the KSE with a paid up capital of Rs. 37 million. As of June 30, 2011, there are 639 listed companies with a listed capital of Rs. 943.7 billion and an approximate market capitalization of Rs. 3,288.7 billion.TopIslamabad Stock Exchange Limited - (ISE)Stock Exchange serving the northern part of Pakistan.Top

Board of DirectorsThe Board of Directors of JCR-VIS consists of the following:Mr.Faheem Ahmad – President & CEO (Nominee of VIS)Ms.Faryal Ahmed Faheem (Nominee of VIS) Ms.Farzeen Ali Allawala (Nominee of VIS)Mr.Saeed Khan (Nominee of VIS)Mr.Muhammad Sohail (Nominee of KSE)Mr.Ahmed Ali Mitha (Nominee of KSE)Mr.Mian Ayyaz Afzal (Nominee of ISE)

 Joint Ventures & AffiliationsIslamic International Rating Agency IIRAThe Islamic International Rating Agency (IIRA) is the sole rating agency established to provide capital markets and the banking sector in predominantly Islamic countries with a rating spectrum that encompasses the full array of capital instruments and specialty Islamic financial products, and to enhance the level of analytical expertise in those markets.IIRA is sponsored by multilateral development institutions, leading banks, other financial institutions and rating agencies. Its shareholders operate from eleven countries which constitute the agency’s primary marketing focus.

In order to further augment its technical capacity, in May 2011, IIRA entered into a formal technical affiliation agreement with its two rating agency shareholders. This initiative provides a platform for IIRA to collaborate with MARC and JCR-VIS on the development of new rating product offerings for the Islamic financial services sector, enhance its quality of service and promote best practices in order to meet the requirements of Islamic financial industry.world.TopCredit Rating Information And Services Limited (CRISL)

CRISL is the first ever joint venture rating agency operating in Bangladesh since 1995. It is a joint venture of Malaysia Berhad (RAM), JCR-VIS Credit Rating Company of Pakistan, few financial institutions and a host of celebrated professionals of Bangladesh. With a license from the Securities Exchange Commission (SEC) under Credit Rating Companies Rules 1996, CRISL now appears as the flagship organization of Bangladesh.CRISL is a public limited company dedicated for credit rating and related services and is being recognized by Bangladesh Bank as the External Credit Assessment Institution (ECAI) to offer its services to the banking community for banking client rating.Top

The Microfinance Rating and Assessment Fund (MFI Rating Fund).JCR-VIS has been pre-approved as a rating agency by MFI Rating Fund for ratings of microfinance institutions (MFIs) in Pakistan and other South Asian countries.The MFI Rating Fund seeks to improve the quality, reliability and availability of information on the risk and performance of MFIs by helping MFIs to obtain independent rating and assessment services by professional rating agencies and specialized funds by providing partial funding for these services to the MFIs. The MFI Rating Fund is managed by the Consultative Group to Assist the Poorest (CGAP) and the Inter-American Development Bank (IDB).

CGAP is a consortium of 29 bilateral and multilateral donor agencies that support microfinance. It is managed by the World Bank and in addition to the World Bank; its donor agencies include the United Nations Development Program, the Department for International Development and the Asian Development Bank. 

IDB, the oldest and the largest regional multilateral development institution, was established in December 1959 to help accelerate economic and social development in the Latin American and the Caribbean regions.