Non-Banking finance companies can operate as P2P service providers

Non-Banking finance companies can operate as P2P service providers
Non-Banking finance companies can operate as P2P service providers

The Securities and Exchange Commission of Pakistan (SECP) has greenlighted regulations for Non-banking finance companies (NBFCs) to provide Peer-to-peer (P2P) lending services. 

What is a Non-banking finance company?

Non-banking finance companies (NBFCs) are entities providing banking and financial services but do not hold an official banking license.

Tez Financial, Muawin, and CreditFix are some of the many NBFCs startups operating in Pakistan. 

Tell me more: The SECP will amend the Non-Banking Finance Companies and Notified Entities Regulations 2008 to include P2P lending for NBFCs.

Once amended, NBFCs will be able to apply for a P2P lending license, enabling them to lend directly to creditworthy borrowers without involving banks in the underwriting process.


Any NBFC that applies for the P2P lending license will be responsible for: 

  • Maintaining at least Rs. 20 million in additional capital.
  • Contributing 15% or higher towards the loan amount.
  • Assessing the creditworthiness of borrowers.
  • Demonstrating strong technological, entrepreneurial, and managerial capabilities to deliver such services.
  • Storing all data related to due diligence, documentation, etc., on hardware within Pakistan.

BTW, if an individual or an institution lends money to another individual or business without the involvement of a traditional bank, it is known as peer-to-peer lending.

Before you go: Borrowers are restricted to a maximum of Rs. 1 million aggregate exposure per borrower per platform at any given time. In contrast, lenders are limited to a maximum of Rs. 500,000 per borrower per platform.

Also, the lending term needs to be 12 months or less. 

Big picture: Finja Invest already offers a version of P2P lending. It connects investors to Kiryana stores in need of working capital.

Investors earn a decent return, and Kiryana stores get to borrow at reasonable rates for short-term periods. 

Increasing competition in the P2P lending space by granting licenses to NBFCs will result in better rates for borrowers and more opportunities for lenders to earn returns.

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