Pakistani Fintech Abhi Raises $2M in Seed Round
Under Sharia law, loans that require repayment with interest are forbidden because they’re considered exploitative. While most companies operating in predominantly Muslim countries look to comply with these rules, financial inclusion is at 14% in Pakistan.
Abhi has created a way around the loan problem and the possibility of borrowing instead of taking a loan. That’s where Waqf comes into play- A type of Islamic endowment or trust used by Muslims for philanthropic purposes such as education and healthcare.
Pakistani Fintech Abhi Raises $2m in Seed Round
Abhi, a fintech startup, will bring its innovative fintech solution to Pakistan where there are over 181 million mobile subscriptions in just a month. The company provides employees with salary advances based on their accrued wages and the name of this new startup is derived from Abhi which means “right now” in Urdu.
They recently raised $2 Million in seed funding led by Vostok Emerging Finance (VEF) for development purposes, including expanding technology offerings and marketing activities and hiring more people to provide even greater services quickly to businesses all across Pakistan.
Village Global, a US-based venture capital firm, focusing on startups at an early stage, also took part in this phase intending to make the first fintech investment in Pakistan. Other investors include Sarmayakar, I2I Ventures, Zion Capital, and Portman Wills, co-founders of the financial wellness platform Wazstream, headquartered in London.
Before the launch, Abhi will conduct a three-month pilot program in Pakistan involving about 20 companies across sectors including insurance, steel production, pharmaceuticals, textiles, and retail to assess the effectiveness of its products and gather information on future growth metrics.
The Fintech startup has worked with companies such as TPL, Arena, Espresso, Dewan Towel and Industries, Act Group, Novins International, and Organic Meat.
Dave Nangle, a partner at VEF, stated-
“We always hear companies talking about ‘digital transformation’. The modernization of the pay cycle is one of the most fundamental changes an organization can make concerning its employees”
He also added,
“The traditional fixed-wage cycle, for as long as we can remember, has tied up employees’ earnings, forcing workers to turn into overdrafts, pay-loans, and other punitive products.”
The recent debut in Pakistan’s fintech scene keeps an eye on the country’s potential as the fund’s activity in the market has recently gained momentum. In April, Sadpe Pay received $7.2 million in seed scholarships led by New York-based Recharge Capital, and SafePay received a seven-figure investment from Stripe and others in February.
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