Over the last few years, the global digital banking industry has gained prominence and is projected to reach $30.1b by 2026, with digital banks in some parts of the world already proving to be successful (e.g. China’s WeBank and Brazil’s NuBank).
In Southeast Asia, many countries have joined the digital bank party — Singapore, Indonesia, the Philippines, Malaysia, and recently Thailand. In South Asia, Pakistan is the latest to announce a new digital banking regulatory framework in January 2022. With South Asia being a secondary geographical focus for us at Integra, we’ve taken the opportunity to jump a little deeper into the developing digital banking landscape in Pakistan (we invested in two Pakistan-based startups so far, Udhaar Book back in 2021, and MedznMore¹ in 2022 ). We believe there is huge potential here — considering its 220m+ population, the ongoing transition to a digital economy and the relatively low valuations compared to markets like Indonesia. As one of the youngest countries in the world with a median age of 22.8 years, about 49% of the population being English speakers, and over 300k IT professionals, Pakistan is home to driven entrepreneurs and tech-savvy individuals who are leading the drive for increased digital adoption.
In this article, we will be zooming in on:
Pakistan’s new digital banking regulatory framework
The new digital banking regulatory framework was announced in January 2022 by the State Bank of Pakistan (“SBP”) and there will be up to 5 licences issued. Figure 1 below shows a summary of the regulatory framework.
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Written by Jennie Kosasih, Analyst at Integra Partners. Illustrated by Theodore Ng, Analyst at Integra Partners
¹ MedznMore is in final stage of closing