Pakistan: A transformative phase in digital microfinance
- MD Finance Team
- Feb 13
- 2 min read
Pakistan’s non-bank digital lending sector is entering a decisive transformation phase — driven by macroeconomic shifts, regulatory reform, and accelerating fintech adoption.
With a population of nearly 260 million and a median age of just 21, Pakistan represents one of the youngest and most structurally underbanked large markets globally. Despite progress in financial inclusion, only around 67% of the population holds a bank account, and access to formal credit remains limited.
This structural credit gap has created fertile ground for non-bank digital lenders.
📊A Market at Scale — and Growing
Recent sector data shows:
Non-bank lending revenues grew from ~€233M (2023) to ~€368M (2025)
Net profits expanded in parallel
Non-Bank Microfinance Companies (NBMFCs) recorded ~51% asset growth
Over 111 licensed non-bank financial institutions operate in the market
Digital lenders are now a core financial access layer — not a niche segment
At the same time, enforcement efforts removed 141 illegal lending apps, improving transparency and protecting compliant operators.
The market is not shrinking. It is professionalizing.
⚖ Regulatory Reset: Commercially Attractive Framework
The Securities and Exchange Commission of Pakistan (SECP) introduced:
A 0.75% daily interest cap (~274% APR)
Explicit prohibition of compound interest
A formal Digital Lending Framework
Whitelisting of approved Digital Lending Apps
Expanded micro-loan size limits
New Credit Guarantee Institution category
Compared to the previous cap regime, the current structure significantly improves commercial viability while maintaining consumer protection standards.
💳 The Rise of Nano Lending
Digital lending is highly concentrated around two dominant players:
JazzCash
Easypaisa
In 2024 alone:
72 million loans were disbursed
~198,000 loans per day
~19 million unique borrowers
Nano loans contributed €102M+ in markup income
This shows enormous repeat usage and embedded behavior within mobile ecosystems.
🌐 International Validation
The market is attracting international groups:
FinVolution (China) entered via licensed NBFC
European groups preparing expansion
Major funding rounds and M&A activity are reshaping the landscape
Pakistan’s fintech ecosystem now includes 450+ fintech companies, with funding rebounding strongly in 2024–2025.
🔎 What This Means
Pakistan represents:
A now clearly defined regulatory framework
Rapid fintech penetration
Attractive pricing economics near regulatory ceilings
Strong growth at sector level
Early-stage consolidation opportunity
For digital lenders, infrastructure providers, investors, and strategic operators — Pakistan is no longer an emerging experiment.
It is a scaling market.
Download the full report to dive deeper into these insights.
