Marking its digital-first commitment, Habib Bank (HBL) has invested into fintech start-up Finja, a fast-growing digital lender in Pakistan which has partnered with Meezan Bank, the Islamic Republic’s largest Islamic bank.
HBL, itself one of the largest providers of Islamic banking services through its HBL Islamic brand, and its participation in Finja’s Series A1 round meet two objectives. Firstly, it is part of its wider strategy of investing in digital financial inclusion and development finance companies, particularly to support agriculture and SMEs in key economic sectors. Secondly, it is aligned with the bank’s brand reinvention: to become a “technology company with a banking license”.
“We are pleased to be investing in Finja. Pakistan’s fintech landscape has immense opportunities. At HBL, we believe that by making this investment we are not only developing the start-up ecosystem, but it will also pave the way for Pakistan to play a bigger role in the fintech space globally. SME lending is the future and therefore we are investing in Finja which enjoys a first-mover advantage over the market in digitally lending to SMEs in this country,” Muhammad Aurangzeb, the president and CEO of HBL, shared.
Finja’s latest funding round was participated also by the likes of BeeNext, Vostok Emerging Finance, Quona Capital and ICU Ventures. It is learned that all investors from previous rounds topped up their investment in this round of financing.
“We are pleased to have HBL participate in this funding round. Our know-how in digitally scoring undocumented small businesses has resulted in 64% month-on-month portfolio growth since the outbreak of the pandemic. HBL’s financial clout, extensive network and progressive leadership will help us support and nurture Pakistan’s most important business segment, the SMEs,” said Qasif Shahid, CEO and co-founder of Finja.
Finja, whose banking partners include Meezan Bank, FINCA and Easypaisa, has managed to grow its lending portfolio by 550% since April 2020 — at the start of the COVID-19 pandemic. Over 50,000 digital loans were disbursed to MSMEs across Pakistan.
“These loans are critical for Pakistan’s economic growth. Our productive loans result in a 40% increase in SME revenue with less than a 1% default rate,” shared Monis Rahman, the chairman and co-founder of Finja. Finja started in 2016 as a mobile wallet, growing steadily and expanding its services to become a digital financing platform focusing on MSMEs.