Fintech company OneLoad an nounces $11m raise from Bill & Melinda Gates Foundation, others

source, since these actions were carried out by TAG Fintech, with which the rest of TAG Innovation’s management and wallet operations had no connection since TAG Fintech is only the holding company of TAG Innovation, and that TAG’s wallet operations in Pakistan had no irregularities, as an entity, TAG Innovation is not directly implicated of any wrongdoing.

The source further says that the arrangement, therefore, most likely is going to be that TAG Innovation’s operations will continue with changes in shareholding in the holding company, changes in the management, and without any involvement of both the original co-founders. According to one of the sources, the scenario for TAG Innovation now will be something like “touching the bottom and then coming back up.”

The central bank has further asked TAG Innovation to submit an audit report of refunds to customers in September but gave no timeline by which the co-founders are required to be removed from the company.

According to SBP’s letter, following the satisfactory completion by TAG Innovation of the removal of both co-founders and refunds to customers, the SBP will convey the future of TAG’s EMI license approval, which affirms the State Bank’s willingness to keep the startup alive, though prompting them to start all over again.

It is pertinent to note that the State Bank has not asked for any action against the CTO of TAG Innovation, Alex Lukianchuk, who is the third co-founder and a shareholder in the holding company. Alex was not named in the document submission fiasco.

The Germany-based CTO of TAG Innovation was made the CEO of TAG Fintech, the holding company in the US after Talal’s resignation in March.

Both Talal and Alex are said to be close and one option left for Talal would be to transfer his shareholding to Alex, in an attempt to retain a say in the company’s decision-making. Profit reached out to Talal for comments on his future course of action but no comments were received. Profit asked Alex about his association with Talal as well as his future plans but no response was received till the filing of this report.

Founded in 2020, TAG was at the pilot stage of the Electronic Money Institution (EMI) licensing process when the State Bank suspended its operations because of a forged document submitted by TAG Fintech while aiming to buy Samba Bank Limited.

TAG Innovation, the operating company has among its present management Talib Rizvi, a senior banker, who has now been given charge to run the affairs under the supervision of new CEO Muhammad Afzal.

In its press release, the SBP says that the recent action requiring refunds to customers has been taken after the identification of violations of SBP’s regulatory requirements and other concerns during the pilot operations of TAG. The central bank did not specify what these violations were. n

Fintech company OneLoad announces $11m raise from Bill & Melinda Gates Foundation, others

With an EMI license on the cards, OneLoad aims to become a bank without physical branches

By Taimoor Hassan

Pakistan’s fintech company OneLoad has announced raising $11 million in new funds as it focuses on the next phase of growth.

OneLoad’s round was led by Pakistan’s Sarmayacar and Abu Dhabhi-based Shorooq Partners, with participation from the Bill & Melinda Gates Foundation’s strategic investment fund. The fintech company also has International Finance Corporation (IFC) as its prior funder. OneLoad, owned by System’s Ltd subsidiary EP Systems, is digitising micro retailers for banking functions. The Lahore-based fintech company is also an aspirant for the Electronic Money Institute (EMI) license and received the in-principle approval from the State Bank in January 2020. Muhammad Yar Hiraj, the founder and CEO of OneLoad, tells Profit that they have fulfilled the central bank’s requirements and are expecting approval for the pilot operations in a few weeks.

Founded in mid-2014, OneLoad acquired retailers by enabling them to sell airtime of telecom operators digitally. With its retailer base now intact, it has moved on to enable them to accept payments and plans further to equip them for cash-in and cash-out services.

OneLoad plans to use the EMI license to convert OneLoad accounts into bank accounts and issue debit cards. “OneLoad trained retailers to keep money with the company as a store of value. With EMI, that store of value is going to become a bank account on which OneLoad will be able to issue a debit card,” Hiraj told Profit.

“Since it will become a bank account, retailers will be able to accept payments from other digital wallets as well as through QR codes.” Hiraj further says that the most important function that they plan to enable retailers for is that instead of doing it through physical ATMs, customers cash-in and cash-out services through OneLoad’s retailer network.

Retailers are further being offered digital loans to address their working capital requirements. OneLoad does the lending through the NBFI license of partner companies and its EP Systems, is also in the process of acquiring an NBFI license. Hiraj says that the entire suite of OneLoad offerings is essentially aimed at fulfilling financial needs of retailers, as well as enabling them to provide banking services without physical bank branches.

OneLoad will use the fresh funds to expand its suite of products and services, targeted at the large unbanked population in Pakistan, estimated at 100 million adults. “We are a grassroots company for the grassroots,” Hiraj said in a press statement.

“We are excited to bring new partners to the company like Sarmayacar and Shorooq Partners. Our vision is to fully digitise the financial needs of the unbanked and the financially excluded masses in Pakistan,” Hiraj says. “We cannot have financial inclusion without a solid infrastructure that integrates into people’s daily lives; if the products we build don’t seamlessly integrate with people every day, we will not achieve that,” said Tamer Azer, a partner at Shorooq Partners. “This is what we learned in Egypt and this is what we see as a tremendous opportunity in Pakistan as well.” n