The IPO Pakistan Has Not Seen Yet: ABHI’s Next Chapter in Fintech

ABHI began in 2021 with eight residents working in a shared room and little else, driven by a question that seemed obvious once articulated: why should someone who has already earned their salary have to wait until payday to access it?

Key points

• The article is written by Omair Ansari, Co-Founder & CEO & Ali Raza Ladhubhai, Co-Founder, ABHI.
• When Nubank, Brazil's largest digital bank, went public in 2021, the event represented more than a milestone for one firm.
• Gold-backed lending is at present its largest business, alongside Earned Wage Access, payroll lending, merchant and SME finance, deposits and payments.
• The listing will be the first of its kind on the Pakistan Stock Exchange (PSX).
• ABHI Microfinance Bank holds a microfinance banking licence in Pakistan and operates through both branch-based and branchless banking channels.

Though similar examples existed in international markets, a few years afterwards, ABHI acquired a struggling microfinance bank, a move unprecedented for a fintech in Pakistan. The acquisition brought real depositors, physical branches and the challenge of turning around an established financial institution, rather than simply expanding a product portfolio. It took almost two years to restore the institution's financial health. From the outside, a stock market listing might appear to be a neat conclusion to the journey. Internally, nevertheless, it has been anything but straightforward.

ABHI Microfinance Bank holds a microfinance banking licence in Pakistan and operates through both branch-based and branchless banking channels. The institution is built around the speed and discipline of a technology firm rather than a traditional branch network. ABHI describes itself as a technology firm with a financial licence, rather than a financial institution that happens to apply technology.

Gold-backed lending is at present its largest business, alongside Earned Wage Access, payroll lending, merchant and SME finance, deposits and payments. Five years ago, these services did not exist together on a single platform. The firm views its current portfolio as part of a broader expansion journey, with further opportunities ahead.

Meanwhile, the listing will be the first of its kind on the Pakistan Stock Exchange (PSX). Nevertheless, ABHI believes that being the first does not produce it more than a firm that arrived at this milestone with considerable backing and some luck along the way.

ABHI frequently looks to Brazil for inspiration. When Nubank, Brazil's largest digital bank, went public in 2021, the event represented more than a milestone for one firm. It offered investors, numerous of whom had previously overlooked Latin American fintech, a tangible benchmark for valuing a digital-first bank at scale. In the years that followed, other Brazilian fintech firms identified it easier to attract capital and gain credibility, partly since Nubank had established a precedent and demonstrated that the business model could withstand market scrutiny.

Rather than hoping Nubank would stumble, the Brazilian market treated its success as evidence that the broader fintech sector deserved greater attention.

Other markets offer similar examples. Kaspi.kz's listing supported shape global investors' perceptions of Kazakhstan, a market that had attracted limited attention outside the region. In India, PB Fintech's listing established an early benchmark for insurance technology firms. Nevertheless, Paytm's more challenging market debut in the same year demonstrated that a successful listing does not automatically pave the way for others. It can create opportunities, but the outcome is not guaranteed.

What matters most, ABHI believes, is whether an ecosystem treats the success of one firm as progress for the wider industry or as an opportunity to find fault.

Such milestones are rarely achieved in isolation. The State Bank of Pakistan, the Pakistan Stock Exchange and the Securities and Exchange Commission of Pakistan have all worked through a listing that the local market had not previously witnessed, navigating the process without an established template. ABHI has expressed its gratitude for their backing and the seriousness with which they approached the process.

For context, the firm does not claim to know whether its listing will have the same impact on Pakistan that Nubank had on Brazil or Kaspi.kz had on Kazakhstan. That judgment, it believes, belongs to the market.

What ABHI does know is that five years ago, it was an eight-person team debating how individuals could access their earned salaries before payday, with more sceptics than supporters. Its listing represents the next chapter of that same argument, now playing out on a much larger scale.

If the milestone helps another firm raise its next round of funding or encourages regulators to consider new financial models, ABHI believes that impact would matter more than the listing itself. The firm sees an opportunity for Pakistan's business ecosystem to develop a stronger instinct for supporting entrepreneurs attempting challenging things, rather than waiting to see whether they fail.

Investing in ABHI Microfinance Bank, the firm emphasises, is not concerning backing the end of its story. It is regarding gaining exposure to the next phase of its expansion. ABHI believes its most significant opportunities still lie ahead.

Notably, the article is written by Omair Ansari, Co-Founder & CEO & Ali Raza Ladhubhai, Co-Founder, ABHI. Stay Connected with ProPakistani.

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