Here Are Pakistan’s Biggest Fintech Developments in 2024

Fintech is one of the emerging sectors in the financial industry, expected to act as a catalyst in Pakistan by bridging the gap between the unbanked population and the banking sector through innovative financial services. Although the growth is remarkable, competition among players has intensified this month, highlighting an interesting trend in their presence in Pakistan. ABHI fintech operator made an exceptional achievement on the global fintech landscape. It has become the first fintech operator in Pakistan that teamed up with another tech company, TPL Corporation, to acquire a foreign microfinance bank, FINCA Microfinance Bank. The banking regulator allowed the two entities to acquire a microfinance bank. This was an ambitious step and direction for other fintech operators to follow in the same direction in the future with consistent profitability, growth, and expansion of the business. A local fintech operator recently acquired a foreign microfinance bank, while a pioneering fintech company in Pakistan made headlines with its unexpected exit from the market. Finja sold its operations to the rapidly growing fintech giant, Opay. Finja was considered the pioneer startup and fintech operator that began its operations in 2021. It obtained dual licenses from the State Bank of Pakistan (SBP) for digital wallets and SME lending from the Security and Exchange Company. The operator grew and expanded its operations over the ensuing years. In 2023, its management made a surprising decision to sell its operations to OPay and exited finally from Pakistan’s market in 2024. Four new operators are set to join the fintech sector in Pakistan. Cerisma, a subsidiary of Pakistan State Oil (PSO), has been granted a license to operate as an Electronic Money Institution (EMI). The company plans to launch financial services, including e-money wallets for both consumers and merchants. With over 3,500 outlets and cash flows amounting to billions of rupees, the subsidiary has a favorable environment for establishing its operations. In 2024, the banking regulator also granted in-principle approval to Toko Lab, which plans to launch e-money wallet services for both consumers and merchants. EduFi Financial Services has launched its operations under a Non-Banking Financial Company (NBFC) license. The company offers loans to students pursuing their education, allowing them to repay the loans to the fintech operator at a later stage. Neem Exponential Financial Services also launched earned wage access or advanced salary. The company raised funds in different rounds before and after the launch of the services. In addition to these operators, a fintech operator, CMPECC, also rolled back its operations. A subsidiary of Systems Limited has commenced its operations with approval from the banking regulator. The company offers e-money wallet services to consumers, merchants, and agents. Additionally, Akhtar Fuiou Technologies and Hubpay have been granted permission to launch their pilot operations, providing e-money wallet services to targeted segments of society. By the end of 2024, five fintech operators will be providing commercial services to their customers under the regulation of the State Bank of Pakistan. Three operators are currently conducting pilot operations, while three others have received initial licenses. Meanwhile, four operators have withdrawn their plans to continue operations in Pakistan. As many as 10 tech companies from Pakistan participated for the first time in the largest global Singapore Fintech Festival in 2024. The participation of these Pakistani companies is expected to attract business and investment opportunities in Pakistan, especially if tech companies continue to explore international markets through such mega events. Adding to the encouraging news, CEO of ABHI, Omair Ansari, was invited as one of the guest speakers to share the success story of his founded companies. Hakeem Tech also received a cash award at the festival for its exceptional services. The Securities and Exchange Commission of Pakistan (SECP) has updated its list of whitelisted fintech operators licensed under the Non-Banking Financial Company (NBFC) framework. Currently, nine operators, including JazzCash, are authorized to provide digital lending services to customers. Additionally, the SECP has issued licenses to eight operators offering various financial services, such as Earned Wage Access (EWA), B2B financing, and Pay Later solutions. The competition among the market players will intensify mainly in the common area of services such as digital lending, e-money wallets, and Buy Now and Pay Later. Operators with better service will get an edge and those with innovative service will grow gradually in the available market.