Egyptian fintech leader Halan Microfinance Bank strengthening presence in Pakistan
Despite hurdles like slow internet speeds, Pakistan's growing digital landscape
and large customer base are proving attractive to foreign fintech companies. As
the nation’s financial sector undergoes a digital transformation, Egyptian
fintech leader Halan Microfinance Bank is strengthening its presence in the
country.
The fintech industry in Pakistan is expanding rapidly, driven by innovations
in digital banking, microfinance, and mobile payments. With 32 banks, 12
microfinance banks, and various other financial institutions, the
infrastructure supporting financial inclusion is improving steadily.
Mounir Nakhla, Founder and CEO of MNT-Halan, the parent company of Halan
Microfinance Bank, sees similarities between Pakistan and Egypt’s financial
systems. Both countries face challenges like large informal economies, limited
access to financial services, and relatively low household loans-to-GDP
ratios—around 3-4%. According to Nakhla, this creates a huge opportunity. “Our
mission is to bridge this financial gap using technology,” he said.
Nakhla was quick to address concerns about Pakistan’s economy, emphasizing
that the country’s informal lending market and strategic geography present an
underappreciated opportunity. “Pakistan’s economy is much larger than it’s
perceived to be, with significant potential for growth through small and micro-loans,”
he said.
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With a population of 241.5 million and Rs9.4 trillion in circulation, the
demand for digital financial solutions is high. The CEO pointed out that cash
transactions in major business hubs can reach up to Rs50 million a day,
showcasing the vast untapped market for digital payments.
The country’s push toward digital payments is evident, with 60.3 million
branchless banking app users and 40.9 million people using call centres or IVR
banking services. Additionally, the number of e-wallet users has reached 4.2 million,
indicating a clear trend toward cashless transactions.
Microfinance is becoming a key driver of financial inclusion in Pakistan.
Since 2018, the sector’s loan portfolio has grown from Rs275 billion to Rs565.8
billion, and the number of active microfinance borrowers has risen sharply,
from 6.94 million in 2018 to 10.78 million in 2024.
Halan Microfinance Bank recently entered the Pakistani market by acquiring
Advance Microfinance Bank. Nakhla described the process as complex but
necessary. “We had to restructure, bring in new talent, upgrade back-end
systems, and redefine policies,” he said. The fintech plans to launch its
digital app this year and open 100 new branches, all while waiting for a
national banking license to scale its operations.
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The bank’s strategy will combine both physical and digital banking services
to ensure accessibility for underserved communities, with a focus on women,
agriculture, the auto market, and livestock farmers. "Our goal is to be
the go-to financial institution for the masses," Nakhla stated.
In addition to the acquisition, Halan Microfinance Bank is investing $10
million in its operations over the next year. The bank plans to build a $500
million loan portfolio in the next five years, with current operations serving
50,000 customers in Pakistan. The CEO also noted that globally, the company has
already served 8 million people and disbursed $11 billion across Egypt, Turkey,
the UAE, and now Pakistan.
While Turkey’s banking sector is more advanced, Nakhla sees Pakistan’s market
structure closely mirroring Egypt's. “Pakistan has a similar financial
ecosystem, and we are eager to apply our experience here,” he added.
The CEO believes that contrary to the belief that Pakistanis shy away from
loans, there is substantial demand. The challenge, however, lies in assessing
creditworthiness and ensuring repayment. “The key is building strong credit
scoring, profiling, and collection strategies,” Nakhla explained.
Halan’s decision to acquire Advance Microfinance Bank allowed them to enter
the market quickly, leveraging an existing banking license. The bank’s initial
focus will be on microfinance products, but it plans to expand its offerings to
include a wide range of loan products, particularly unsecured loans for women
entrepreneurs and vehicle financing.
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Understanding the importance of Islamic finance, Nakhla confirmed that the
bank would provide Shariah-compliant options alongside conventional products,
allowing customers to choose what best fits their needs.
Additionally, Halan is exploring partnerships with local companies to offer
embedded financing solutions, such as advance salaries and third-party
installment payments at competitive interest rates. "We're not just
focused on interest rates; we're integrating financial services across various
sectors to make financing more accessible for everyone," he concluded.
Source: Express Tribune