Halan, Egypt’s Leading Fintech, Expands into Pakistan’s Growing Market

Ever wondered how millions of people in Pakistan still lack access to basic financial services? It’s a huge challenge, but it’s also a massive opportunity. Pakistan’s financial landscape is ripe for disruption, and that’s exactly what Halan, Egypt’s leading fintech innovator, is doing. They’re making a big bet on Pakistan’s potential, expanding their operations despite the hurdles. Think spotty internet, reliance on cash, and a tricky regulatory environment – Halan’s taking it all on. Their goal? To ignite a digital financial revolution and bring financial inclusion to communities across the nation. This isn’t just about business; it’s about empowering individuals and transforming lives.

Related: Egypt’s Agel Secures Pre-Seed Funding for Its Shariah-Compliant Fintech Platform

Untapped Potential in a Developing Economy

Pakistan’s financial sector, while navigating various complexities, presents a compelling opportunity for fintech innovation. The country’s increasing digitalization, a vast and largely underserved customer base eager for accessible financial solutions, and a growing appetite for innovative financial products are key factors attracting foreign players like Halan. The sector is experiencing rapid growth, propelled by advancements in digital banking, microfinance, mobile payments, and other fintech solutions.

The country’s payment systems infrastructure has undergone substantial expansion, with a network of traditional banks, microfinance banks (MFBs), payment system operators (PSOs), branchless banking service providers (BBs), and electronic money institutions (EMIs) all contributing to the broader push for financial inclusion, according to data from organizations like i2i and the State Bank of Pakistan. However, significant gaps remain, particularly in access to credit and financial services for underserved populations.

Halan’s parent company, MNT-Halan, recognizes the striking parallels between Pakistan’s economic landscape and that of Egypt. Both nations share significant cultural and economic similarities—large populations, substantial informal economies, and historically low levels of access to formal financial services. Mounir Nakhla, Founder and CEO of MNT-Halan, emphasizes this connection, stating, “With household loans to GDP at just a fraction of what it could be, there’s immense untapped potential in Pakistan. This mirrors the situation we successfully addressed in Egypt, and our mission is to bridge this financial gap through technology-driven banking, fostering greater financial inclusion and economic empowerment.” This understanding of shared challenges, coupled with Halan’s proven experience in navigating similar markets, provides a unique advantage in adapting its strategies to the specific needs of the Pakistani market.

Unveiling Pakistan’s True Economic Power

Nakhla challenges prevailing misconceptions about Pakistan’s economy, particularly the often-underestimated potential of its population and the size of its informal economy. “Pakistan is a cash-driven economy with significant informal lending,” he explains. “The official size of the economy is frequently underestimated. It’s a much larger and more dynamic market than perceived, with a huge population and strategic geographic location. Providing accessible small and micro-loans will not only help businesses grow and create jobs but also be a profitable and sustainable venture for us.” This perspective reveals Halan’s strategic vision and its confidence in Pakistan’s economic potential, recognizing the untapped opportunities within its diverse and dynamic market.

With a population exceeding 240 million and trillions of rupees in circulation, the need for accessible, efficient, and inclusive digital financial solutions in Pakistan has never been more pressing. The sheer volume of cash transactions, particularly in major business hubs where daily cash flows can reach staggering amounts, underscores the urgent need for digital transformation and greater transparency within the financial system. “That’s an enormous amount of money flowing through informal channels,” Nakhla observes. “We are motivated to digitize payments, reduce cash reliance over time, and bring greater transparency, security, and efficiency to the financial system, ultimately benefiting both individuals and businesses.”

A Shifting Landscape of Financial Services

Digital payment adoption is accelerating rapidly in Pakistan, as demonstrated by the growing number of users across various digital channels. Data from the State Bank of Pakistan and other sources indicate substantial user growth in branchless banking mobile apps, mobile banking, internet banking, and EMI/e-wallets. The increasing number of payment cards in circulation further reinforces the nationwide shift towards cashless transactions and the broader adoption of digital financial services. This growing digital literacy and comfort with technology creates a fertile ground for Halan’s innovative solutions, paving the way for greater financial inclusion.

Microfinance has emerged as a critical driver of financial inclusion in Pakistan, empowering small businesses, entrepreneurs, and individuals with access to much-needed capital and financial resources. The sector’s consistent growth, reflected in the increasing gross loan portfolio and penetration rates, demonstrates the rising demand for micro-loans and their positive impact on economic empowerment, poverty reduction, and community development. The expanding number of active microfinance borrowers further highlights the growing reliance on these financial resources as a vital tool for economic mobility and self-sufficiency.

Halan’s Strategic Entry

Halan Microfinance Bank has strategically entered the Pakistani market through the acquisition of Advance Microfinance Bank, a move that provided a crucial foothold and accelerated its entry. Nakhla describes the process as “complex,” involving significant restructuring, talent acquisition, system upgrades, and policy overhauls to align with Halan’s vision and operational standards.

Halan is launching its user-friendly digital app this year, providing seamless access to its financial services, while simultaneously expanding its physical presence with new branches across the country. This hybrid approach, combining the convenience of digital banking with the accessibility of physical branches, is designed to ensure inclusivity and reach all segments of society, particularly those in underserved and remote areas. This blended strategy recognizes the importance of human interaction and trust-building, especially in communities where digital literacy may still be developing.

Halan’s approach in Pakistan is deeply rooted in financial inclusion, with a strong focus on empowering women, supporting the agricultural sector, facilitating access to the auto market, and providing financial solutions for livestock farmers. “Our goal is to become the go-to financial institution for the masses,” Nakhla emphasizes, “prioritizing financial inclusion for underserved communities who have been traditionally excluded from the formal financial system and lack access to traditional banking services.” This commitment to inclusion is not only a social responsibility; it’s a key driver of sustainable economic growth, unlocking the potential of marginalized communities and contributing to a more equitable and prosperous society.

Betting on Pakistan’s Long-Term Growth

Halan Microfinance Bank has pledged a substantial investment in Pakistan, underscoring its confidence in the market’s long-term potential and its commitment to fostering financial empowerment across the nation. In addition to the acquisition cost, the company plans to invest millions more over the next few years, with ambitious targets for loan portfolio growth, customer acquisition, and market share. This significant financial commitment demonstrates Halan’s long-term vision for Pakistan and its dedication to building a robust and sustainable financial institution that serves the needs of all Pakistanis.

Halan is leveraging its valuable experience gained in Egypt and other markets to address the unique challenges and opportunities presented by the Pakistani market. Nakhla highlights the similarities between the two markets, particularly in terms of consumer and small business lending, emphasizing the importance of adapting proven strategies to the specific context of Pakistan. He stresses the critical role of robust credit scoring, profiling, and collection strategies in mitigating risk, ensuring responsible lending practices, and building a sustainable business model.

Dispelling Misconceptions

Nakhla challenges the widely held belief that Pakistanis are inherently averse to taking loans. He argues that the demand for credit is strong and widespread, but the real challenge lies in accurately assessing creditworthiness, managing repayment effectively, and building trust between lenders and borrowers. Halan’s expertise in credit evaluation, risk management, and responsible lending practices, honed in the Egyptian market, is crucial in navigating this critical aspect of the business and fostering a culture of responsible borrowing and repayment.

The decision to acquire Advance Microfinance Bank was a strategic move that allowed Halan to expedite its entry into the Pakistani market and leverage existing infrastructure and regulatory licenses. Nakhla explains that the existing license and branch network provided a solid foundation for growth, while the company’s restructuring efforts have transformed the bank into a more efficient, technologically advanced, and sustainable operation. This strategic acquisition significantly shortened the time to market and allowed Halan to focus on expanding its reach and developing innovative financial products.

Meeting Diverse Needs and Empowering Different Sectors

Halan Microfinance Bank plans to introduce a diverse and expanding range of loan products tailored to the specific needs of different demographics, sectors, and communities, going beyond traditional microfinance offerings. The company is particularly focused on empowering women entrepreneurs with access to capital, facilitating vehicle financing to improve mobility and economic opportunities, and providing financial solutions for the agricultural sector and livestock farmers, recognizing their vital role in the Pakistani economy. The emphasis on unsecured lending reflects Halan’s belief in the creditworthiness of the majority of the population and its commitment to providing access to finance for those who lack traditional collateral.

Halan’s Pakistan expansion is more than fintech; it’s a commitment to financial inclusion. Offering both conventional and Shariah-compliant options, they empower individuals and businesses. This inclusive approach provides greater access to diverse financial solutions. From microloans to digital payments, Halan aims to shape Pakistan’s financial future. They’re building a more robust and accessible financial ecosystem. Halan is poised to make a real difference.