ISLAMABAD: Licensed digital lending Non-Bank Finance Companies (NBFCs) have made rapid progress and started to show disruption in Pakistan’s lending landscape and are proving to be significant in furthering the journey of financial inclusion, data shared by the Securities and Exchange Commission of Pakistan (SECP) showed on Friday.

The SECP has licensed six fintech-enabled NBFCs, which have collectively reached out to 365,239 borrowers with disbursement of over Rs6,139 million through 858,998 loans, which signifies that many borrowers have obtained more than one loan from these lenders.

The data released by the SECP shows that the average loans size of these digitally-enabled NBFCs ran­ges from Rs1,000 to Rs80,000 depen­ding upon the nature of business and target market of these entities.

“These are small loans available easily for the borrowers, but since these are digital-based, the borrowers cannot default and ignore the repayment,” said a senior official of the SECP adding that the data of defaulters is shared with the State Bank of Pakistan as a result the defaulter cannot avail any other financial service.

The official added under this lending mode, the small amount request by the borrower is credited into the digital wallet of the borrower within few hours as digital processing of the loan is fast and does not require any guarantee.

Newly licensed digital lending NBFCs include Finja Lending Ser­vices Limited, SeedCred Financial Services Limited, Qisstpay BNPL Limited, Tez Financial Services Limited, Cashew Financial Ser­vices Limited and CreditFix Fina­ncial Services Limited. These NBFCs are providing financial solutions to otherwise unserved and underserved through digital means and include Nano lending, Peer-to-Peer (P2P) Lending and Buy-Now-Pay-Later models etc.

All of these licences have been issued during the last three years to NBFCs that are engaged in digital lending using innovative fintech solutions.

The first fintech-enabled NBFC licence was issued in 2019 and only 55,528 requests were honoured, disbursing Rs495 million, while by the end of 2021, the six licence holders disbursed a total of Rs6.13 billion to 365,239 borrowers.

“This is a solution to the traditional complaint that the banks were not interested in small loans, and the majority of borrowers were those who either did not possessed credit cards or wanted to spend the amount in any sector which does not deal in credit cards,” the official added.

The SECP has said that fresh applications have been received for NBFC licence from investors who intend to engage in fintech based lending.

Published in Dawn, February 5th, 2022

Opinion

Editorial

Post-flood economy
Updated 24 Sep, 2022

Post-flood economy

WITH a third of the country — especially Sindh and Balochistan — under water, over 33m people displaced, and...
Panadol shortage
24 Sep, 2022

Panadol shortage

FROM headaches to fever to bodily pain — paracetamol is used ubiquitously in Pakistan as the go-to remedy for most...
Star-struck cops
24 Sep, 2022

Star-struck cops

IN this age of selfies and social media, it is easy to get carried away in the presence of famous people, even if ...
Timely remorse
Updated 23 Sep, 2022

Timely remorse

The country needs more leaders, not rabble-rousers.
Miranda Warning
23 Sep, 2022

Miranda Warning

BEATINGS, rape, sleep deprivation, electric shocks, even waterboarding — the Punjab Police is notorious for...
Nuclear geopolitics
23 Sep, 2022

Nuclear geopolitics

TWO key international issues — Iran’s stand-off with the West over the former’s nuclear programme, and Russian...