Pakistan’s Abhi Issues Region’s First-Ever Fintech Islamic Bond

Karachi-based fintech startup, Abhi has raised the region’s first Sukuk bond for a fintech firm, opening a new funding line for startups hit by a drop in venture capital, reported Bloomberg. The venture capital firm raised Rs. 2 billion ($6.8 million), an industry first for the Middle East, Africa, and Pakistan region, according to Abhi’s chief executive officer and co-founder Omair Ansari. He said demand exceeded expectations, with subscriptions reaching twice the anticipated amount. The bond issuance immediately follows ABHI’s qualification for the international selection panel (ISP) by Endeavor, and its selection by Hub71 to boost expansion into the Middle East, where it is partnering with companies to financially empower them and their employees. Pakistan is experiencing the highest rate of inflation in Asia as it tries to reactivate a loan from the International Monetary Fund. People are accessing salaries from Abhi much more than before. Companies are also increasingly gaining access to working capital funds, according to the fintech’s top executive. “With this new funding, we can help ease the financial burden on struggling companies. The market is still so deep in Pakistan as banks have stepped away when it comes to lending to the real economy. We believe this is the environment for us to really grow,” he stated. Local startups are facing a funding crisis in the midst of one of the country’s worst economic crises. In 2022, Vitol-backed VavaCars and trucking startup Trella left Pakistan, Swvl Holdings of Dubai suspended daily rides, and Uber’s Careem suspended food delivery. In the midst of this financial moratorium, Abhi provides working capital to businesses as well as early salary access to employees who register on its platform. Within a year of its launch last year, it raised funds at a $90 million valuation and entered the UAE market. Currently, it is in the process of acquiring a stake in Universal Network Systems Ltd, a Pakistani courier company.