Supported by an upcoming generation of talented tech professionals, the Fintech industry is evolving rapidly in Pakistan. Fintechs could begin to make major contributions to the Asian country’s nearly $400 billion GDP.
Professionals leading the country’s finance ministry and its reserve bank (the State Bank of Pakistan or SBP) are planning to introduce initiatives that will improve the Pakistani economy.
New companies or businesses now operating in the country’s Fintech space such as SadaPay aim to enable greater financial inclusion while offering innovative and user-friendly digital financial services.
As reported by the Business Times, Mutaher Khan, an IT worker who’s been following the growth of the Fintech sector, revealed that they’ve seen over a dozen firms obtaining in-principle approval from the SBP in order to provide different types of financial services. These include establishing digital commerce gateways and bill payments facilities.
Khan claims that payments, bills and money transfers are some of the key areas where there’s considerable activity, along with a shift towards mobile and Internet banking – which may have accelerated following the COVID-19 outbreak.
Khan, who’s working on a directory for the Pakistani technology industry, called DataDarbaar.com, where you can obtain all the information on domestic startups and new technologies, noted that a lot of the growth on this front is being driven and supported by telco-backed Fintech apps, such as JazzCash and Easypaisa.
Khan confirmed that these apps have acquired a significant user base via their agent-based network that has now penetrated some of the most remote areas in Pakistan. He explained that the same over-the-counter or OTC transactions have now been digitized. Meanwhile, there are traditional Pakistan banks that are also developing a strong online presence so that they can remain competitive in this fast-evolving Fintech space, Khan revealed.
In another update from the Business Times, the news outlet reported that there might be some scope for Pakistan and Singapore to work on Fintech projects and the broader tech industry as well. Singapore is now home to a major Fintech sector so there could be a lot that Pakistan might be able to learn from these initiatives.
An industry professional suggested that these collaborations might be as simple as knowledge exchange programs, which has become quite popular due to events like the Singapore Fintech Festival (SFF) where people are able to participate in masterclasses conducted by experienced business owners.
According to industry professionals, there could be a major investment opportunity for investors looking to establish some type of operation in Pakistan. Golden Gate Ventures and Stripe Asean are working on some projects, however, there’s still a lot of room for more growth and development.
It’s worth noting that Pakistan still faces many socioeconomic challenges with the vast majority of the nation’s population not having access to modern banking services, quality education, or decent job opportunities.
Most mainstream business and global financial services offered by platforms such as Amazon and PayPal (among many others) are still not available in Pakistan because the nation’s regulators have failed to implement a proper framework so that businesses can operate smoothly.
Despite these issues, Pakistan is home to one of the largest freelancer communities in the world and the country is on track to potentially become a leading or more prominent world economy by 2030. Pakistan is also considered a “middle-power” (so not completely a third-world country) which could be, in large part, due it being a nuclear power.