SBP greenlights TPL Corp and Abhi’s acquisition of majority stake in FINCA Microfinance Bank

The State Bank of Pakistan (SBP) has granted final approval for TPL Corp and Abhi to acquire a 94.8% stake in FINCA Microfinance Bank Limited, while also paving the way for investments in other Microfinance Banks (MFBs) seeking equity injections. Economic and technology analysts view this as a positive step for Pakistan’s struggling economy, reported The Express Tribune.

In a notification issued by the Pakistan Stock Exchange (PSX), the SBP announced its final nod for TPL Corp Limited (TPL) and Abhi (Private) Limited to proceed with the acquisition of a substantial shareholding in FINCA Microfinance Bank Limited pending adherence to relevant laws, regulations, and SBP conditions. TPL and Abhi are currently working to fulfill all necessary requirements to finalize the acquisition.

According to a prominent economist, FINCA has been facing significant losses due to management challenges, and SBP’s approval was a positive outcome, as it took several months for the central bank to reach the decision. “With the right expertise and qualified staff, MFBs can become profitable, ultimately benefitting smaller clients,” added Dr Shahid Hassan Siddiqui. He also noted the current difficulties MFBs face, particularly with larger commercial banks now offering microfinance solutions.

Syed Mohsin Ahmed, CEO of Pakistan Microfinance Network, said the acquisition, will open opportunities for investment in other MFBs seeking equity. While Fahad Sajjad, CEO of the Pakistan Fintech Network, described the collaboration as promising. TPL operates across diverse sectors in Pakistan, including mobile value-added services, tracking, and insurance, while Abhi is a dedicated fintech firm offering cutting-edge services. Sajjad remarked that the combination of innovation and funding could play a significant role in promoting digital lending and enhancing financial inclusion, thereby simplifying life for a large segment of the population.

Tech experts have welcomed this acquisition highlighting the robust capabilities of local entities in technology and finance sectors. TPL and Abhi bring substantial local market experience and an understanding of relevant challenges and solutions.

The duo could also capitalize on FINCA’s extensive network of over 100 branches to unify microfinance services across more than 100 cities in Pakistan, as well as introduce innovative offerings such as early wage access and insurance products.

In the past decade, FINCA Pakistan has empowered millions of families through lending, savings, and financial education while consistently earning accolades for its customer service excellence. The bank has pioneered several innovations in the microfinance sector, including the first mobile network-agnostic digital wallet in Pakistan, and has played a significant role in supporting women entrepreneurs.

The new entity will continue to provide an array of innovative financial products aimed at equipping individuals and small businesses with the necessary tools to succeed, furthering Pakistan’s journey toward economic empowerment and heightened inclusion.