- Despite the massive opportunity for fintechs in Pakistan, the market is largely untapped
- There are only about 45 fintechs in operation in Pakistan, the bulk of which operate in the payments sector
- We highlight five companies that could drive fintech growth in Pakistan: EasyPaisa, JazzCash, Finja, Tez and SadaPay
Pakistan offers a huge opportunity for fintechs, but the market remains largely untapped. We estimate there are only about 45 fintechs in operation in Pakistan (see appendix), the bulk of which operate in the payments sector.
One reason for this is that Pakistani fintech start-ups are able to attract much less funding than other comparable markets. However, we think the market is at an inflection point – activity levels seem to be picking up, with SadaPay's recent US$7.2mn funding round throwing the spotlight on the market’s huge potential.
In this report, we highlight five companies that could drive fintech growth in Pakistan.
This subsidiary of Telenor Microfinance Bank was launched in 2009 to provide branchless banking services, and was the first mobile payments platform in the country. It is the only Pakistani fintech to be certified as a mobile money service provider by the Global System for Mobile Communications (GSMA). At end-2020, EasyPaisa had around 8.1mn active mobile wallet accounts and processed transactions worth PKR1.5tn (US$9.5bn) in 2020.
JazzCash (formerly known as MobiCash) is a branchless banking service provider launched in 2012 by mobile network service company, Mobilink, which is backed by international telecom giant Veon. JazzCash is now a leading mobile payments platform in Pakistan, competing closely with EasyPasia. In 2019, JazzCash had 6.5mn active digital wallets and processed transactions worth PKR2.0tn (US$13bn).
Finja aims to to fulfill the needs of financially-excluded individuals and SMEs on its digital platform. It is primarily a lending platform, but is also in the process of acquiring an e-money licence from SBP, which would enable it to launch full-fledged digital payments platform for consumers, businesses and merchants. Finja attracted the highest volume of fintech funding in 2020, at US$9mn, taking its total funding to US$15mn. To date, Finja claims to have disbursed over 50,000 loans.
Tez Financial Services (Lending)
Tez is the first fully digital non-bank microfinance company in Pakistan that aims to play a primary role in financial inclusion. Tez uses technologies such as Artificial Intelligence to monitor customer preferences and tailor their offerings accordingly on their one-stop mobile phone application. Tez has also recently expanded to offer insurance products to its customers in partnership with EFU, a leading domestic insurance company.
SadaPay's mission is to replace complexities and high costs in traditional financial services with simple and free digital financial services. The firm is collaborating with MasterCard and has secured the largest fintech funding round so far in 2021, at US$7.2mn, taking its total funding raised to US$9.3mn. SadaPay is still in its pilot phase and already has 200,000 customers on its waiting list. As a fully digital operator, the firm enjoys low marginal costs.
Acknowledgements: We would like to thank Rabail Adwani for his assistance with this report.
- 1 Macro Analysis/Global G7 reiterates support for SDR allocation and seeks to boost its impact
- 2 Strategy Note/Global G7's 'Build Back Better World' is not an answer to China's Belt and Road
- 3 Strategy Note/Vietnam Vietnam: The best emerging market is still spoilt by foreign ownership limits
- 4 Macro Analysis/Pakistan Pakistan's FY22 Federal Budget – Serious push on growth
- 5 Strategy Note/Global Egypt's military spend is not securing the Nile in its dispute with Ethiopia
This report is independent investment research as contemplated by COBS 12.2 of the FCA Handbook and is a research recommendation under COBS 12.4 of the FCA Handbook. Where it is not technically a res...