Bank Alfalah acquires equity stake in, and partners QistBazaar

With this announcement, the company made an entry into the venture capital ecosystem, having agreed to acquire a 7.2% stake in QistBazaar, a Securities and Exchange Commission of Pakistan (SECP) licensed Buy Now, Pay Later (BNPL) non-bank financial company (NBFCs) platform.

BNPL in Pakistan and what the agreements entail

Per the press release, this marks a ‘breakthrough’ within the region’s fintech landscape, as Bank Alfalah is among the first commercial banks to have taken an equity stake in a BNPL fintech, with the bank aiming to transform BNPL in Pakistan and ‘pave the way’ for increased collaboration between commercial banks and fintechs.

Apart from the equity agreement, Bank Alfalah and QistBazaar signed an embedded financing agreement in Shariah Compliant mode, subject to terms and conditions. The bank is set to incorporate digital financing products within the QistBazaar platform to provide embedded consumer durables financing on BNPL, targeting customers with either limited or no access to formal credit. The collaboration is believed to bring forth a new era by improving the customer experience, together with financial inclusion, and offering ‘innovative’ solutions.

Atif Bajwa, President and CEO stated that Bank Alfalah is committed to collaborating with partners to address the needs of customers that have limited access to credit and decreased purchasing power. Per their statement, the partnership with QistBazaar via an equity investment and Islamic-embedded financing deal marks a step further, as it aims to provide ‘inventive’ financial solutions, thus creating opportunities for growth and support for underserved customers.

Adding on this, Arif Lakhani, CEO QistBazaar advised that the company has been on the mission of democratising purchasing power, stating that in the initial 18 months of activity, more than 17,000 Pakistanis served did not have bank accounts, nor were they able to complete the purchase without leveraging their services. The official believes that having Bank Alfalah as an equity and embedded financing partner together with their guidance and experience is set to help simplify QistBazaar’s work.

Based on the information provided in the press release, the BNPL facility is growing in popularity among consumers due to its capabilities of the likes of affordability, convenience, and financial flexibility, while providing a cost-effective solution to traditional means of purchasing in times of high-interest rates.

As Bank Alfalah is currently operating a BNPL product leveraging its ecommerce marketplace platform, Alfa Mall, and through this collaboration, the financial institution is looking to expand into customer segments that have either this or non-existent credit files.