SECP Issues BNPL License to Alibaba-Affiliated Koko Tech Pakistan
Another Positive Step for Pakistan’s Digital Finance Ecosystem
SECP has awarded a Buy Now, Pay Later (BNPL) license to Koko Tech Pakistan Pvt. Ltd (KTPL) which is backed by the world’s largest online shopping site, Alibaba. This is a first for the Pakistan Fintech AND Digital Economy.
The expansion of Alibaba’s interest in Pakistan’s Financial Service Sector illustrates the growing international market confidence for the enormous consumer potential, the increasing digitization, and the financial viability of Pakistan.
BNPL and Importance
Purchase now, and pay later (BNPL) models allow consumers to buy products and defer payment to a later date. For many options, there are no credit checks.
With this new license, Koko Tech Pakistan is likely to implement systems for credit scoring and a new digital platform that offers efficient and simple financing options.
Young people, independent workers, and small/medium sized enterprises (SMEs) in particular, will benefit significantly from this, as they have been the most challenged when seeking financing from banks.
The Economy of Pakistan
Experts agree that this will:
- Increase the spending capacity of consumers
- Improve the growth of e-commerce
- Facilitate Financial Inclusion
- SME’s will be able to thrive
Additionally, the initiative is a first so the investment is coming directly to the Financial Sector in Pakistan. This will enhance the overall outlook for the economy of Pakistan.
From the Government’s Point of View
SECP Chairperson Dr. Kabir Ahmed Sidhu said that the introduction of the KTPL, Alibaba backed KTPL will bring innovation and will drive competition in the financial services of Pakistan.
He also noted that there are many reasons why global investors see Pakistan as an opportunity investment:
- Demographic Dividend
- Fastest growing digital economy
- Sustained growth in the regulation of the economy
Future Plans
Koko Tech Pakistan is anticipated to first offer its BNPL services in the big cities of the country and then spread its services to the rest of the country.
This initiative has the potential to greatly change the way credit is available to the general public in Pakistan and can help the country to create a digitally inclusive economic system.
Valediction
For a company owned by Alibaba to get approval to offer BNPL services in Pakistan is more than just the another business license for a business, but a first step for the country to participate in the global fintech business. It is bringing supply of services, demand of services, and investment to further develop the cashless economy in the country.
