ISLAMABAD: A fintech company - Finja is actively engaged in digital partnerships with banks, fast moving consumer goods (FMCGs), distributors and kiryana stores providing digitise credits to small businesses with disbursements of nearly Rs 10 billion by over 1,000 businesses using Finja Business portal.
Talking to Business Recorder here on Monday, Qasif Shahid (CEO and Co-Founder Finja) highlighted that support from both regulators, the company has clocked over Rs 100 billion in transactional volume with its assets under management growing in excess of 110 percent during the pandemic year.
Upon enquiring how the company managed to scale during peak pandemic, Qasif elaborated that Finja quickly leveraged the two regulatory licenses - one of which is the NBFC (Non-Banking Financial Company) by the Securities and Exchange Commission of Pakistan (SECP) which allows Finja Lending Services Ltd to lend digitally and the other, an EMI (Electronic Money Institution) approval by the SBP (State Bank of Pakistan) that enables Finja (Pvt) Ltd to take deposits, both digitally.
In 2020, Pakistani tech startups raised a record breaking $60 million across 50 deals, which is 57.34 percent more than the previous year.
One of the most significant funding from this pool is accredited to Lahore-based fintech Finja which closed a groundbreaking $9 million in a $10 million Series A financing round.
The investment came from ICU Ventures and the existing investors BeeNext, Vostok Emerging Finance, Quona Capital, and Descon Engineering Services.
It takes the total financing raised so far by the company to about $15 million.
Finja subsidiaries operate under dual licensing regimes of the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) for its lending and digital payments businesses, he informed.
He commented that P2P lending mandated by the SECP is an innovative alternative digital platform that connects borrowers with individual lenders, who come together to meet the borrowers’ loan requirements.
The P2P lending helps the borrowers give out short-term loans that enable the SMEs to scale up their business, eventually qualifying them to take bigger bank loans.
Finja, in anticipation of Pakistan transforming into a virtual work space, capitalised on its EMI status to upgrade and retool its new-age payments platform called “Finja Business”.
Under the new design, institutions and corporates could sign up instantly without any paperwork or face-to-face meetings and manage essential business operations such as payments, disbursements, e-invoicing/collections for their employees, vendors, suppliers, partners and clients.
Built on top of the EMI payment plumbing, Finja Business portal is now compatible with all bank accounts and wallets in the country and is not just limited to disbursements or collections into the Finja App.
Till date, more than a thousand businesses have made disbursements close to Rs10 billion using the portal already.
Similarly, under the NBFC status Finja is also focused on digitizing the Kiryana network which has been severely underserved despite being a major component of the economy, Qasif added.
During peak lockdown periods, “Karyana” stores gained preponderance over large grocery malls as consumers preferred these to safely purchase daily essentials from. Hence, this segment has been in dire need of credit to optimize their sales cycle and achieve business growth.
With an aim to grow the hyper-local, Finja through its partnership with multiple FMCGs and their distributors such as Nestle, Unilever, Sigma, Phillip Morris, Reckitt Benckiser and Punjab Beverages digitally processed loans close to half a billion rupees, using Finja’s proprietary machine learning and artificial intelligence-led algorithms and analytics.
These loans are disbursed and collected digitally, eliminating cash-heavy, time and cost intensive processes.
He delved further that supported by the credit books of its partner banks, Finja has disbursed over 50,000 unsecured digitally scored Islamic and conventional loans to businesses and salaried individuals.
Small business and consumer lending represents a Rs10 trillion (USD $60 billion) market in Pakistan of which less than four percent is currently penetrated.
He concluded that with this new capital injection along with Finja’s strong partnerships with the SECP, the SBP, banks, the FMCGs, distributors and many other parts of the supply chain and payment ecosystem, the company is fully equipped to scale.
Qasif invited banks, distributors, lending institutions and other cross-industry incumbents to join forces with Finja to digitize credit for small businesses and consumers facilitating them to reach their goals with dignity and for the overall economy to experience unprecedented growth.
Copyright Business Recorder, 2021
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