Fintech, one of the rising industries in the financial industry, is going to act as a catalyst in Pakistan by bridging the gap between the unbanked population and the banking sector through new financial services.
Despite the impressive development, players’ competition has increased this month, revealing a curious pattern in their presence in Pakistan.
An outstanding accomplishment on the global fintech scene was made by the ABHI fintech operator. It has joined forces with another digital company, TPL Corporation, to buy FINCA Microfinance Bank, a foreign microfinance bank, making it the first fintech operator in Pakistan.
The banking authority permitted the two organizations to purchase a microfinance bank. This was a bold move and a path that other fintech companies could use in the future to maintain steady profitability, corporate growth, and expansion.
A leading fintech company in Pakistan made news with its sudden exit from the market, while a local fintech operator just purchased a foreign microfinance bank. Finja sold its business to Opay, a quickly expanding fintech behemoth.
When it started operating in 2021, Finja was regarded as the first fintech operator and startup. It received two licenses from the Security and Exchange Company and the State Bank of Pakistan (SBP) for SME loans and digital wallets. Over the following years, the operator’s business continued to grow and expand. Its management unexpectedly decided to sell its business to OPay in 2023, and in 2024 it eventually left the Pakistani market.
New Players’ Arrival
Pakistan’s fintech industry is expected to welcome four new operators. A license to function as an Electronic Money Institution (EMI) has been given to Cerisma, a division of Pakistan State Oil (PSO). The business intends to introduce financial services, such as e-wallets for customers and businesses.
With more than 3,500 locations and billions of rupees in cash flows, the subsidiary has an ideal setting in which to launch its business. In 2024, Toko Lab received in-principle approval from the banking regulator to introduce e-money wallet services for merchants and consumers.
With a Non-Banking Financial Company (NBFC) license, EduFi Financial Services began operations. The business provides loans to students who are enrolled in school with the option to pay back the loans to the fintech operator later.
Additionally, Neem Exponential Financial Services introduced advanced salary or earned wage access. Before and following the services’ introduction, the business raised money in many rounds.
Alongside these operators, CMPECC, a fintech operator, also shut operations.
Business E-Processing System Expansion
The banking authority has given its approval for a Systems Limited subsidiary to begin operations. The business provides agents, merchants, and customers with e-money wallet services. Permission has also been given to Hubpay and Akhtar Fuiou Technologies to begin their pilot projects, offering e-money wallet services to specific societal groups.
Five fintech companies will be offering their clients commercial services by the end of 2024, all while being governed by the State Bank of Pakistan. Three operators have been granted first licenses, and three more are already engaged in pilot operations. Four operators, meanwhile, have decided not to carry on with their operations in Pakistan.
Fintech Festival in Singapore
In 2024, up to ten digital firms from Pakistan took part in the biggest international Singapore Fintech Festival for the first time.
It is anticipated that these Pakistani enterprises’ participation will draw commercial and investment prospects to Pakistan, particularly if tech companies continue to use these large-scale events to investigate foreign markets. The CEO of ABHI, Omair Ansari, was asked as a guest speaker to discuss the success story of his formed firms, which further added to the positive news.
For its outstanding services, Hakeem Tech was also given a monetary prize during the festival.
SECP Updates Fintech Operator List
The list of whitelisted fintech companies regulated under the Non-Banking Financial Company (NBFC) framework has been revised by the Securities and Exchange Commission of Pakistan (SECP).
JazzCash is one of nine companies that are now permitted to offer consumers digital loan services. Eight operators who provide various financial services, including Earned Wage Access (EWA), B2B finance, and Pay Later options, have also received licenses from the SECP.
Looking Forward to 2025
The common areas of services like digital loans, e-money wallets, and Buy Now and Pay Later will see the most intense competition among market participants. Better service providers will gain an advantage, and those offering creative services will progressively expand in the market.
