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Pakistani fintech startup that gives employee salary advances banks $2m
Under Shariah or Islamic law, a loan that requires repayment with interest is forbidden because it’s considered exploitative. While most companies that operate in predominantly Muslim countries look to comply with these rules, financial inclusion in Pakistan stands at 14%.
But what if people could borrow money without taking out a loan?
A fintech startup is bringing in this facility to Pakistan – a country with more than 181 million mobile subscriptions – within a month. Abhi provides employees with salary advances based on accrued wages. The company’s name is derived from abhi, an Urdu word that means “right now.”
The company recently raised US$2 million in a seed round led by Vostok Emerging Finance (VEF). Abhi will use the funds to develop its platform’s technology and increase hiring as well as for marketing activities and other operational expenses.
Village Global, a US-based venture capital firm focused on early-stage startups, also participated in the round, marking its first fintech investment in Pakistan. Other investors include Sarmayacar, I2i Ventures, Zayn Capital, and Portman Wills, co-founder of Wagestream, a London-headquartered financial wellness platform.
“We believe financial wellness and access to credit are basic human rights, which we aim to bring to all our customers,” said Abhi co-founder Omair Ansari, a former Morgan Stanley executive. “Our goal is to digitize consumer credit, address pain points in the manual payments process and be there when consumers need us most.”
Before its launch, Abhi will conduct a three-month pilot program in Pakistan involving around 20 companies across sectors including insurance, steel manufacturing, pharmaceutical, textiles, and retail to gauge the effectiveness of its product and gather information for future growth metrics.
The fintech startup has also teamed up with companies such as TPL, Arena, Espresso, Dewan Towels and Industries, ACT Group, Novins International, and The Organic Meat Company.
This development comes amid a rising demand for financial inclusion Pakistan as the Covid-19 pandemic has upended the lives of many who don’t have access to alternative sources of borrowing.
“We hear companies talk about ‘digital transformation’ all the time. Modernizing the pay cycle is the most fundamental transformation a company can make to its relationship with employees,” said Dave Nangle, partner at VEF.
He adds: “The traditional pay cycle has tied up employees’ earned income for as long as we can remember, forcing workers to turn to overdraft, payday loans, and other punishing products.”
With the aim of becoming a “one-stop shop for a consumer’s financial needs,” Abhi will to add other features to its app, including a borrowing option that will be covered by an employee’s provident fund, increasing their pool of funds.
The startup is targeting a total portfolio value of US$10 million by the end of the year, onboarding about 150,000 employees on its platform. It also plans on expanding its services to South Asia and the Gulf Cooperation Council (GCC) region within the next two years.
Abhis entry into Pakistan’s fintech scene also underscores the country’s potential as funding activity in the market recently gained momentum. In April, SadaPay bagged US$7.2 million in a seed round led by New York-based Recharge Capital, while SafePay got a seven-figure investment from Stripe and others in February.
Deepti Sri · 20h ago · 3 min read
Pakistani fintech startup that gives employee salary advances banks $2m
Under Shariah or Islamic law, a loan that requires repayment with interest is forbidden because it’s considered exploitative. While most companies that operate in predominantly Muslim countries look to comply with these rules, financial inclusion in Pakistan stands at 14%.
But what if people could borrow money without taking out a loan?
A fintech startup is bringing in this facility to Pakistan – a country with more than 181 million mobile subscriptions – within a month. Abhi provides employees with salary advances based on accrued wages. The company’s name is derived from abhi, an Urdu word that means “right now.”
The company recently raised US$2 million in a seed round led by Vostok Emerging Finance (VEF). Abhi will use the funds to develop its platform’s technology and increase hiring as well as for marketing activities and other operational expenses.
The Abhi team / Photo credit: Abhi
Village Global, a US-based venture capital firm focused on early-stage startups, also participated in the round, marking its first fintech investment in Pakistan. Other investors include Sarmayacar, I2i Ventures, Zayn Capital, and Portman Wills, co-founder of Wagestream, a London-headquartered financial wellness platform.
“We believe financial wellness and access to credit are basic human rights, which we aim to bring to all our customers,” said Abhi co-founder Omair Ansari, a former Morgan Stanley executive. “Our goal is to digitize consumer credit, address pain points in the manual payments process and be there when consumers need us most.”
Before its launch, Abhi will conduct a three-month pilot program in Pakistan involving around 20 companies across sectors including insurance, steel manufacturing, pharmaceutical, textiles, and retail to gauge the effectiveness of its product and gather information for future growth metrics.
The fintech startup has also teamed up with companies such as TPL, Arena, Espresso, Dewan Towels and Industries, ACT Group, Novins International, and The Organic Meat Company.
This development comes amid a rising demand for financial inclusion Pakistan as the Covid-19 pandemic has upended the lives of many who don’t have access to alternative sources of borrowing.
“We hear companies talk about ‘digital transformation’ all the time. Modernizing the pay cycle is the most fundamental transformation a company can make to its relationship with employees,” said Dave Nangle, partner at VEF.
He adds: “The traditional pay cycle has tied up employees’ earned income for as long as we can remember, forcing workers to turn to overdraft, payday loans, and other punishing products.”
With the aim of becoming a “one-stop shop for a consumer’s financial needs,” Abhi will to add other features to its app, including a borrowing option that will be covered by an employee’s provident fund, increasing their pool of funds.
The startup is targeting a total portfolio value of US$10 million by the end of the year, onboarding about 150,000 employees on its platform. It also plans on expanding its services to South Asia and the Gulf Cooperation Council (GCC) region within the next two years.
Abhis entry into Pakistan’s fintech scene also underscores the country’s potential as funding activity in the market recently gained momentum. In April, SadaPay bagged US$7.2 million in a seed round led by New York-based Recharge Capital, while SafePay got a seven-figure investment from Stripe and others in February.
Executives with experience in tech firms such as Facebook, Google, Stripe, Coinbase, Uber, Careem, InstaCart, and LinkedIn are also looking to cash in early on the largely untapped opportunity in Pakistan.
Under Shariah or Islamic law, a loan that requires repayment with interest is forbidden because it’s considered exploitative. While most companies that operate in predominantly Muslim countries look to comply with these rules, financial inclusion in Pakistan stands at 14%.
But what if people could borrow money without taking out a loan?
A fintech startup is bringing in this facility to Pakistan – a country with more than 181 million mobile subscriptions – within a month. Abhi provides employees with salary advances based on accrued wages. The company’s name is derived from abhi, an Urdu word that means “right now.”
The company recently raised US$2 million in a seed round led by Vostok Emerging Finance (VEF). Abhi will use the funds to develop its platform’s technology and increase hiring as well as for marketing activities and other operational expenses.
Village Global, a US-based venture capital firm focused on early-stage startups, also participated in the round, marking its first fintech investment in Pakistan. Other investors include Sarmayacar, I2i Ventures, Zayn Capital, and Portman Wills, co-founder of Wagestream, a London-headquartered financial wellness platform.
“We believe financial wellness and access to credit are basic human rights, which we aim to bring to all our customers,” said Abhi co-founder Omair Ansari, a former Morgan Stanley executive. “Our goal is to digitize consumer credit, address pain points in the manual payments process and be there when consumers need us most.”
Before its launch, Abhi will conduct a three-month pilot program in Pakistan involving around 20 companies across sectors including insurance, steel manufacturing, pharmaceutical, textiles, and retail to gauge the effectiveness of its product and gather information for future growth metrics.
The fintech startup has also teamed up with companies such as TPL, Arena, Espresso, Dewan Towels and Industries, ACT Group, Novins International, and The Organic Meat Company.
This development comes amid a rising demand for financial inclusion Pakistan as the Covid-19 pandemic has upended the lives of many who don’t have access to alternative sources of borrowing.
“We hear companies talk about ‘digital transformation’ all the time. Modernizing the pay cycle is the most fundamental transformation a company can make to its relationship with employees,” said Dave Nangle, partner at VEF.
He adds: “The traditional pay cycle has tied up employees’ earned income for as long as we can remember, forcing workers to turn to overdraft, payday loans, and other punishing products.”
With the aim of becoming a “one-stop shop for a consumer’s financial needs,” Abhi will to add other features to its app, including a borrowing option that will be covered by an employee’s provident fund, increasing their pool of funds.
The startup is targeting a total portfolio value of US$10 million by the end of the year, onboarding about 150,000 employees on its platform. It also plans on expanding its services to South Asia and the Gulf Cooperation Council (GCC) region within the next two years.
Abhis entry into Pakistan’s fintech scene also underscores the country’s potential as funding activity in the market recently gained momentum. In April, SadaPay bagged US$7.2 million in a seed round led by New York-based Recharge Capital, while SafePay got a seven-figure investment from Stripe and others in February.
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Pakistani fintech startup that gives employee salary advances banks $2m
Under Shariah or Islamic law, a loan that requires repayment with interest is forbidden because it’s considered exploitative. While most companies that operate in predominantly Muslim countries look to comply with these rules, financial inclusion in Pakistan stands at 14%.
But what if people could borrow money without taking out a loan?
A fintech startup is bringing in this facility to Pakistan – a country with more than 181 million mobile subscriptions – within a month. Abhi provides employees with salary advances based on accrued wages. The company’s name is derived from abhi, an Urdu word that means “right now.”
The company recently raised US$2 million in a seed round led by Vostok Emerging Finance (VEF). Abhi will use the funds to develop its platform’s technology and increase hiring as well as for marketing activities and other operational expenses.
The Abhi team / Photo credit: Abhi
Village Global, a US-based venture capital firm focused on early-stage startups, also participated in the round, marking its first fintech investment in Pakistan. Other investors include Sarmayacar, I2i Ventures, Zayn Capital, and Portman Wills, co-founder of Wagestream, a London-headquartered financial wellness platform.
“We believe financial wellness and access to credit are basic human rights, which we aim to bring to all our customers,” said Abhi co-founder Omair Ansari, a former Morgan Stanley executive. “Our goal is to digitize consumer credit, address pain points in the manual payments process and be there when consumers need us most.”
Before its launch, Abhi will conduct a three-month pilot program in Pakistan involving around 20 companies across sectors including insurance, steel manufacturing, pharmaceutical, textiles, and retail to gauge the effectiveness of its product and gather information for future growth metrics.
The fintech startup has also teamed up with companies such as TPL, Arena, Espresso, Dewan Towels and Industries, ACT Group, Novins International, and The Organic Meat Company.
This development comes amid a rising demand for financial inclusion Pakistan as the Covid-19 pandemic has upended the lives of many who don’t have access to alternative sources of borrowing.
“We hear companies talk about ‘digital transformation’ all the time. Modernizing the pay cycle is the most fundamental transformation a company can make to its relationship with employees,” said Dave Nangle, partner at VEF.
He adds: “The traditional pay cycle has tied up employees’ earned income for as long as we can remember, forcing workers to turn to overdraft, payday loans, and other punishing products.”
With the aim of becoming a “one-stop shop for a consumer’s financial needs,” Abhi will to add other features to its app, including a borrowing option that will be covered by an employee’s provident fund, increasing their pool of funds.
The startup is targeting a total portfolio value of US$10 million by the end of the year, onboarding about 150,000 employees on its platform. It also plans on expanding its services to South Asia and the Gulf Cooperation Council (GCC) region within the next two years.
Abhis entry into Pakistan’s fintech scene also underscores the country’s potential as funding activity in the market recently gained momentum. In April, SadaPay bagged US$7.2 million in a seed round led by New York-based Recharge Capital, while SafePay got a seven-figure investment from Stripe and others in February.
Executives with experience in tech firms such as Facebook, Google, Stripe, Coinbase, Uber, Careem, InstaCart, and LinkedIn are also looking to cash in early on the largely untapped opportunity in Pakistan.
