The Karachi-based lender, which is backed by the Kuwait Investment Authority sovereign wealth fund, has completed its pilot phase and will start commercial operations in February, according to Chief Executive Officer Umair Aijaz. The digital bank aims to attract at least a million customers within three years with a focus on small commercial lending.
“We are very excited to explore this opportunity of a digital bank in the small- and medium-sized enterprise space,” Aijaz said in an interview in Karachi Wednesday. “Globally, it has already picked up with a lot of traction.”Pakistan is seeing a new wave in its financial sector after the central bank granted licenses to five new digital banks in 2023. The liberalization drive pits lenders with overseas backing, such as Telenor ASA’s Easy Paisa and the United Arab Emirates’ Mashreqbank PSC, which has already started operations, against local lenders Hugo Bank and Buraq Bank Pakistan. The lenders will initially operate under certain limitations but will be eligible to upgrade to a fully fledged digital bank license in three years that will allow them to do corporate banking.
Raqami intends to invest most of the planned $100 million in people, technology and information security. It has already spent 8 billion rupees ($28.6 million) to bring it to the launch phase. The bank will focus on lending to small- and medium-sized enterprises, independent entrepreneurs and others segments that find it difficult to get loans, said Aijaz. The bank plans to break even in four years.
Kuwait’s sovereign wealth fund owns a stake in one of Pakistan’s largest lenders, Meezan Bank Ltd. and Raqami through Pakistan Kuwait Investment Co.
Source: Bloomberg
