Alif, a fintech company, is eager to reach Pakistan’s ‘underbanked’ sector

Tajikistan-based, Mahmood Shamsher Ali, Country Representative Alif Capital Holdings, claimed that Alif is trying to penetrate Pakistan’s fintech industry to cater to Pakistan’s massive ‘unbanked’ population.

Abdullo Kurbonov, Firdavs Mirzoev, and Zuhursho Rahmatulloev founded Alif as a microcredit organization in Tajikistan in 2014.

Following the announcement of the digital banking framework by the State Bank of Pakistan, the company is one of roughly 20 organizations and startups that have sought a license.

“The central bank’s initiative has gained tremendous interest from players from around the world,” said Ali, billed as the CEO of Alif Digital Bank after the approval of license, adding, “It is rumored that over 20 applications were submitted on the 31st of March, 2022.”

“This makes for interesting times ahead with legacy banks being pushed to reinvent themselves, and the participation of fintechs making for a new ecosystem that should achieve the many objectives of the State Bank of Pakistan.”

Ali has been exploring the market with Alif’s founders in order to come up with solutions that will provide the most value to Pakistan’s underbanked and ignored SMEs.

Banks have access to only Rs6-7 trillion, according to sources, while Rs17-18 trillion in transactions remained unreported.

“Alif is also Shariah compliant,” said Ali.

“Alif has immense potential to serve a market such as Pakistan for its stints with similar markets, although smaller markets, of Tajikistan and Uzbekistan.”

The country’s fintech market, according to Omer Bin Ahsan, founder and CEO of another Shariah-compliant fintech Haball, has enormous potential, but most transactions are undocumented. Lack of Sharia acceptable products for consumers, according to Ahsan, is one of the key reasons for Pakistan’s poor banking penetration.

According to Ali, Alif intends to provide BNPL, month-long loans, B2B financing, and remittance services. The company intends to invest Rs1.5 billion in paid-up capital at the outset, increasing to Rs4 billion once fully operational.