Pakistan's Finja raises $9 million for its digital lending platform

Lahore-based fintech Finja has closed $9 million in a $10 million Series A financing round, it announced in a statement today to MENAbytes. The investment came from ICU Ventures and the existing investors BeeNext, Vostok Emerging Finance, Quona Capital, and Gray MacKenzie Engineering Services (a Descon company). It takes total financing raised so far by the company to about $15 million. Finja, under the terms of the latest round, has the flexibility to raise an additional $1 million.

Founded in 2016 by tech veterans; Qasif Shahid, Monis Rahman, and Umer Munawar, Finja started as a mobile wallet but has evolved into a digital lending platform with a focus on micro SMEs (mainly grocery stores) and salaried professionals; offering them different types of lending and payments services.

The merchants (mainly neighborhood grocery stores locally known as kiryana stores) and small businesses, can use Finja to request inventory financing, make payments to their vendors, order inventory, and track their invoices.

The startup also partners with corporates and businesses of different sizes to help them manage their business payments, payroll, vendor relations, and enable their employees to request salary advances through its mobile app. It also offers credit to salaried professionals who are not part of its network, through a different product called Finja Credit Line.

These segments, in Pakistan, are not catered by the banks who do not have any products for them and even if they do, the process is too much of a hassle for any individual or business to even consider them an option.

Finja disburses these loans with the support of the credit books of its partner banks. It claims to have disbursed over 50,000 of unsecured digitally scored Islamic and conventional loans to businesses and salaried individuals to date.

"Small business and consumer lending represent a $60 Billion market in Pakistan of which less than 4% is currently penetrated. As a result of this sector being neglected, small businesses have largely struggled to grow due to unavailability of capital," said the fintech that operates with dual licenses from the country's central bank (SBP) and financial regulatory agency (SECP).

Finja claims to have clocked over $620 million (PKR 100 billion) in transactional volume to date with its assets under management growing by over 110 percent (YoY) in 2020.

Qasif Shahid, the co-founder and CEO of Finja who previously launched and led mobile banking products in different parts of the world, said, "With this new capital injection along with our strong partnerships with SECP, SBP, banks, FMCGs, distributors and so many other parts of the supply chain and payment ecosystem, we are fully equipped and supported by the industry to rapidly scale to create unprecedented impact."

Monis Rahman, the co-founder and Chairman of Finja who is one of Pakistan's leading tech entrepreneurs and leads country's largest online employment portal Rozee.pk, said, "We are excited to scale our efforts to help small businesses and consumers reach their goals with dignity. We are grateful for the support of some of the world's best fintech funds which have invested in Pakistan for the first time through Finja."

Finja plans to use the investment to scale its product and marketing efforts. A part of the funds will also be used to furnish new lending portfolios.