VRG is seeking Rs1bn to
capture the unbanked.
What makes it tick?
Backed by PathFinder, the fintech company wants to bank the unbanked. How are they any different?
I
By Taimoor Hassan
f you are an investor, would you place your bet on a fintech company that has based its business case on what the banks have actively tried to avoid? Lets flip the question to make it more easily comprehensible: would you place your bet on financial inclusion? The popular belief, that Pakistan has a hugely unbanked population therefore the
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opportunity to provide financial services therefore create a great business is massive, comes with a caveat: the financially excluded are poor and there is not enough money that can be made off of them. This argument is enough for the banks to rest their case of not banking the unbanked or serving the underbanked. Unless these segments do not have money, it does not make sense for the banks to chase them. The flag bearers of financial inclusion, fintech companies JazzCash and EasyPaisa, have done phenomenally well in banking the unbanked
up until Covid-19. Without spreading physical brick-and-mortar branches like banks, both these fintech companies built a sprawling infrastructure of branchless banking agents to provide financial services to the segments untouched by the banks because it did not make a commercial case for them. The abilities of these fintech companies, however, were severed seriously when the State Bank of Pakistan (SBP) slashed IBFT charges during the pandemic, and kept most of the transactions free later as well, dampening
