Tajikistan-based Mahmood Shamsher Ali, the Country Representative for Alif Capital Holdings, told The News International that Alif wants to use Pakistan’s fintech space to help the country’s many “unbanked” people.
Alif was started in Tajikistan in 2014 by Abdullo Kurbonov, Firdavs Mirzoev, and Zuhursho Rahmatulloy. It is a microcredit organisation that lends money to people who need it.
The company is also one of about 20 businesses and start-ups that have applied for a licence after the State Bank of Pakistan started a digital banking framework for businesses.
People from all over the world are interested in what the central bank is doing, says Ali, CEO of Alif Digital Bank. “It is said that more than 20 applications were submitted on March 31, 2022.”
People who work for traditional banks are going to have to come up with new ways to make money in the future, and the State Bank of Pakistan will be a part of a new ecosystem that should help them meet their many goals.
In the last few months, Ali has been working with the people who run Alif to look at the market and think of ways to help small businesses that aren’t well-served by banks.
According to reports, banks had only been able to get access to Rs6-7 trillion, while Rs17-18 trillion worth of transactions were not.
Then Ali said: “Alif is also Shariah-compliant, too.”
As a result of Alif’s time in Tajikistan and Uzbekistan, he has a lot of power to serve a market like Pakistan.
Omer Bin Ahsan, the founder and CEO of another Shariah-compliant fintech called Haball, said that there was a lot of room for growth in the country’s fintech space, but most transactions were not recorded, so there was a lot of risks. In Pakistan, there aren’t enough Sharia-compliant products for people, Ahsan said, which is one of the main reasons there isn’t a lot of banking there.
In Ali’s words, Alif wants to offer BNPL, short-term loans (month), B2B finance, and remittances. A paid-up capital of Rs1.5 billion will be put into the company at the start, and it will eventually grow to Rs4 billion when the company is fully operational.
With four people at the start, two of them worked part-time. Due to the fact that the company did not have Core Banking software, it did not work well.
In the end, Alif decided to build its own Core Banking system in-house, which set the stage for building one of the best IT teams in the Central Asian region later on.
A core banking system that Alif built and used in-house had been in use by 2017. The products were made and kept track of in a Shariah-compliant way. By 2018, Alif had more products and services, like alif mobi (the largest and most widely used finance mobile application in Tajikistan). By then, they have joined cross-border money transfer systems.
In 2019, Alif came to Uzbekistan. Over the course of three years, Alif became the biggest Buy Now Pay Later service provider in Uzbekistan.
Tajikistan’s central bank is going to give Alif a full banking licence in 2020. This will make them the first Central Asian fintech company to work with Visa.
At the start of the year 2021, Alif was the fastest-growing retail bank in Tajikistan. Alif also had an e-money and payments licence in Uzbekistan at the time.
In September 2021, the founders of Alif went to Pakistan to see what the market was like. There was a lot to learn about the credit ecosystem for BNPL, the banking options, and the gaps that could be filled by a fintech, especially one that was Shariah-compliant and customer-focused. Alif used the last three months of the year 2021 to get ready to enter the Pakistan market.
At the same time, the SBP shared the framework for Digital Retail Banking in Pakistan with people who might be interested in applying.
Alif knew that the situation was perfect before he even arrived. There were a lot of unbanked and underbanked people, women were underserved, migrants’ families were underserved, and the young people of Pakistan didn’t have a bank that would fit their needs, Ali said.
As long as they were freelancers or contributors, it was clear that they were tech-savvy. They used smartphones for communication, to learn new things, and to serve their international clients.
A change was inevitable. Also, he said, one of the most positive things he heard about was a regulator that was willing to be creative, work with local businesses, and come up with new ideas that could help Pakistan move from a cash-based economy to one that is more digitally-based.
That’s what Ali told me. Alif’s founders knew that the local solution would need to be quickly changing, tech- and customer-focused.
It would have to be one that was made for the Pakistani market, he said, as well.
“Alif was able to do this because it had all of its own solutions built in-house.” Alif can now say that they have its own Core Banking System, Customer Relationship Management System, and an Android and iOS app, Ali said.
Because Alif isn’t a traditional business, its only goal is to get to know the customer’s ecosystem and figure out how to help them save, manage their money, and save money through a single “application” solution.
Among Alif’s main goals in Pakistan are consumer financing, mobile payments, SME financing and mobile remittances, says a representative from the company. Alif is one of the fastest-growing market leaders in these fields.