The Competition Commission of Pakistan (CCP) has approved Bank Alfalah’s plan to acquire a 7.2% stake in Shariah compliant buy-now-pay-later (BNPL) fintech start-up Qist Bazaar in a PKR140 million (US$502,950) deal, marking the lender’s foray into the venture capital space.
“The purchase of shares by Bank Alfalah will provide the necessary financing for QistBazaar to provide better service and improve its infrastructure. It will also open up a new online market for consumers enhancing competition with retailers across the region. This will improve services to the consumers,” noted the CCP.
The CCP, through its Phase I assessment of the potential deal, concluded that the proposed acquisition would not result in the bank gaining a monopoly in the market post transaction.
The acquisition plan was first revealed in May this year when Bank Alfalah and Qist Bazaar signed an agreement to that effect. Bank Alfalah became the first commercial bank in the Republic to acquire a stake in a BNPL start-up.
Bank Alfalah, which offers Shariah compliant banking products through its Islamic arm, Bank Alfalah Islamic, had also signed an embedded financing agreement of up to PKR350 million (US$1.26 million) with Qist Bazaar.
Qist Bazaar last month secured Shariah approval from the Securities and Exchange Commission of Pakistan for its BNPL offering, making it the first non-banking finance company in the Republic to officially offer Muslim-friendly BNPL services.
Founded in 2021, Qist Bazaar’s offering is based on the concept of Musawamah.