Islamabad: The Securi­ties and Exchange Commission of Pakistan (SECP) has introduced a comprehensive framework for digital lenders to offer innovative products such as buy now, pay later services, employer-integrated earned wage access, etc.

The Securities and Ex­change Commission of Pakistan, in partnership with industry stakeholders, conducted a comprehensive review of the current framework to promote innovation and ensure consumer protection.

After serious concerns by the digital lending Non-Banking Financial Compa­nies (NBFCs) that the operational framework has to be rationalised, the SECP has issued a new Circular 12/2024 that has also consolidated the require­ments of Circulars 15/2022, 10/2023, and 15/2023.

The integration of multiple NBFCs with whitelisted digital lending platforms via Application Program­ming Interface will facilitate the expansion of lending opportunities to a broa­der range of borrowers.

The revised framework introduces a host of new product verticals tailored to meet the evolving needs of borrowers and further strengthening the cybersecurity standards.

The SECP has said that among these innovations are the introduction of Embedded Lending thr­ou­gh APIs, Buy Now Pay Later services, and Emp­loyer Integrated Earned Wage Access. The revised guidelines aim to enhance the access to finance for Small and Medium Enter­prises thro­ugh Busi­ness-to-Business financing channels.

Amid serious pressures from the international donor agencies the SECP has decided to enhance the digital lending ecosystem in country that will cater to consumers and businesses, promoting transparency, data protection, and innovative financial solutions.

Published in Dawn, May 17th, 2024

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