By Omer Bilal ISLAMABAD, Feb 22 (INP-WealthPK): The Securities and Exchange Commission of Pakistan (SECP) granted six more licences to Non-Bank Finance Companies (NBFCs) in 2021, thus creating a favorable environment for financial inclusion. Recently, the SECP received applications seeking licences from two more fintech firms, namely Micro Creed Financial Services and Jingle Creed Financial. With the issuance of licences to six fintech NBFCs in 2021, the total number of such companies has reached 20 in Pakistan. In 2021, the regulator issued licences to Finja Lending Ser­vices Limited, SeedCred Financial Services Limited, Qisstpay BNPL Limited, Tez Financial Services Limited, Cashew Financial Ser­vices Limited and CreditFix Fina­ncial Services Limited. The other entities having been issued licences since 2019 include Autosoft Dynamics, CareemPay, CreditFix, Keenu Monet, Nayapay, Oneload, Fonepay, Foree, HBL Konnect, JazzCash, Ufone Pay/Upaisa, Telenor Bank, TEZ Fin and TPS. This firms are providing financial solutions in micro-lending, mobile wallets and payment gateways. To encourage innovative business models and promote financial inclusion, the regulator has also released procedural guidelines. Under the guidelines, fresh deposits for obtaining NBFC licences for investment finance services, leasing, discounting and housing finance services will now be Rs50 million. Under the fintech lending mode, the small amount request by the borrower is credited into his/her digital wallet within few hours as digital processing of loan is fast and does not require any guarantee. The total amounts disbursed were over Rs6 billion in 2021, over Rs1 billion in 2020 and Rs495 million in 2019. The total number of loans disbursed was 839,281 in 2021, 179,798 in 2020 and 129,266 in 2019. On the other hand, the number of borrowers in 2021 was 365,239, 71,941 in 2020 and 55,528 in 2019. The NBFCs can be categorised as investment banks, mutual funds, microfinance companies and asset management companies. The average loan size in these classes ran­ges from Rs1,000 to Rs80,000 depen­ding on the nature of business and target market of these entities. The mode of lending may also vary, including nano lending, peer-to-peer (P2P) lending and buy-now-pay-later models. The regulator in pursuance of the government’s objective of providing ease of doing business, has opened the doors for innovation, enabling the technology-based financial institutions to ensure quick disbursal of small loans to citizens. This mode of borrowing has eliminated the likelihood of default and any other fraudulent practices as fintech firms are digital-based, and the data of borrowers is shared with the State Bank of Pakistan. Therefore, defaulter of a fintech firm cannot avail any other financial service. The first fintech-enabled NBFC licence was issued in 2019, and 55,528 requests were entertained, disbursing Rs495 million in loans. The fintech services have made rapid inroads in the country’s lending landscape.