Habib Bank Limited (HBL) became the first bank in Pakistan to invest in a FinTech startup with its significant participation in the last tranche of Finja’s $10.15m Series A1 round.
With its $1.15m participation, HBL joined leading global funds that are invested in Finja including BeeNext, Vostok Emerging Finance, Quona Capital and ICU Ventures.
All investors from previous rounds topped up their investment in this round of financing.
HBL’s investment in Finja serves two of the bank’s strategic priorities – investing in digital financial inclusion and development finance companies, especially ones making an impact in agriculture and SMEs and proactively reinventing HBL to become a “technology company with a banking license”.
Since the beginning of the Covid-19 pandemic, Finja has built its digital lending portfolio by 550%, disbursing over 50,000 digital loans to micro, small and medium-sized enterprises. The funding will help the firm to aid small businesses in Pakistan as they have traditionally struggled to obtain credit to grow. In partnering with commercial banks and telecom companies, Finja aims to increase its reach to the mass population of Pakistan, 77% of whom are still unbanked.
Commenting on thee round, Finja CEO and co-founder Qasif Shahid said, “Our ground-breaking success in digitally scoring undocumented small businesses has resulted in a 64% month-on-month portfolio growth for us since the outbreak of the pandemic earlier this year. Undoubtedly, HBL’s financial clout, massive network and progressive leadership will help us elevate the country’s most important segment, the SMEs.”
Building on the firm’s growth, Finja co-founder Monis Rahman added, “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.”
HBL president and CEO Muhammad Aurangzeb added, “We are delighted 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 Startup 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.”
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