Umer Munawar and Zain Bhatti

Early life and background

Munawar's parents wanted him to become a doctor. Bhatti's family has a history in the garment sector. Bhatti says his interest in technology began in class two, when his mother got him a computer. [1]

Education

Munawar completed his A-levels at Lahore Grammar School. He completed ACCA in two years, and says it gave him knowledge and skills but no practical application of them. He completed a bachelor's degree by writing a research thesis and a research paper. He also did a master's in finance. [1]

Bhatti completed O-levels and A-levels before his undergraduate degree at Lahore School of Economics. [1]

Umer Munawar's career

Munawar worked in investment banking. He was involved in raising capital for the company of a friend of his father. He said he wanted to start something of his own and that fintech was the space where he wanted to end up. [1]

Zain Bhatti's career

Bhatti worked with his brother for about two years. He says his brother continued with textile while he started looking for jobs, and that he was not built for textile. In 2006 he started working with a company that was doing cutting-edge work. He says the work he was doing was really the beginning of electronic payments in Pakistan. [1]

Bhatti says Mobilink partnered with a company on a product, and the advertisement for it caught the regulator's eye. He says draft regulations came in 2008. He moved to Karachi during tough times. [1]

Bhatti worked with a consulting company that was consulting the Bill and Melinda Gates Foundation on its grant to expand a service. He says he launched internet banking and launched another product. He said he did not want to spend his whole career in banking. [1]

Finja

Munawar is one of Finja's three founders. He says the name Finja came from "financial ninjas". Finja began under branchless banking regulation, bringing in a microfinance bank as its banking partner, and he says it could not afford its own bank or microfinance licence at the start. Munawar says Finja raised its first funding "at the back of a napkin", when three of them pitched a plan to an investor. [1]

Munawar says that in 2016 Finja brought in what he described as the first, second or third international investment into Pakistan. He says it took four to five years to do the tech development and gather the licences. Finja holds three licences. It holds an NBFC licence to lend to businesses and individuals. Its e-money licence is in its pilot phase, and it expects to go commercial soon. [1]

Munawar says Finja was recently the first company to get a lending pilot approval, under a sandbox licence, from SECP. He says SECP is drafting regulations so that Finja can go commercial and scale up. [1]

Finja's lending model

Munawar says Finja's vision is to give MSMEs, supply chains and company employees access to credit. Finja lends to salaried professionals and to businesses such as kiryana stores and MSMEs. He says Finja has no branches and operates digitally, and that its digital model has reduced the cost of doing business. [1]

Finja's algorithm estimates a business's profitability and probability of default, according to Munawar. Finja has partnered with FMCG companies such as Unilever and Nestle and takes data from them. Munawar says Finja co-lends with banks on the back end. He says that once Finja has lent to a person four times out of its own capital, the bank lends to him the fifth time. [1]

Finja gives credit for buying products such as Unilever's, with repayment after 30 days when the product is sold. Munawar gives the example that if Finja helps a person buy stock worth 100 rupees and he pays back after seven days, he pays 101 rupees. He says Finja does not sell goods, only finances them. He also says Finja collaborates with companies across the ecosystem, including Retailo. [1]

Finja Business is a tool that businesses use to manage cash flows and payments, according to Munawar. He describes it as kind of a ledger that does not store value. Munawar says that people who want to lend to a kiryana store can sign up and give their money to the store. He says lenders receive returns of up to 20 per cent on the capital given to a kiryana store. He says that in the pilot phase only 100 people can invest. [1]

Finja's team and technology

Munawar says Finja has six people in its management team. He says its average employee age is 28, and that most of its product heads and product managers are women. He says its data science and data engineering teams are core in-house teams. He says Finja builds, runs and uses its own technology. [1]

Finja and the pandemic

Before March 2020, most of Finja's lending was salary advances. Finja had to pivot completely during the pandemic, as March 2020 changed the business. It ran a small pilot project on the sidelines with Unilever, lending to kiryana stores. Munawar says Finja thought the world was moving towards hyper-local. He says Finja was one of the largest earned-wage-access lenders in the country during COVID. [1]

Views

Munawar says Pakistan is the fifth largest market but the most underserved for credit. He says people need a financial identity and access to credit. He says banks are largely shut to SMEs, which he calls the biggest problem in banking. He says traditional data sets cannot work in Pakistan because the economy is cash-based. He says a person who lacks education can still leave a huge data footprint through his business. [1]

Munawar says people in Pakistan have never been trained to handle credit. He says payments will not grow unless they come with a promise of credit, and that incentivising payments destroys the data. He says financial service providers have an onus to educate people. He says a person who has worked 15 days and earned his salary should be able to access it. [1]

Bhatti says over-regulation in Pakistan is a consequence of banks not taking risks. Munawar says the regulator is becoming more proactive and tells firms not to wait for regulations but to come to it. [1]

Munawar says Finja aims to empower every MSME to grow its business. He says Finja is empowering small businesses, nano businesses and home chefs with capital. [1]

Munawar says Pakistan is on the right track in business, education and empowerment. He says Pakistan could make 30 years of progress in 15 years by working together, and that poverty has fallen and household incomes have risen. He predicts Pakistan will produce at least 10 unicorns in the next five years. Bhatti says population growth is a big challenge for Pakistan, even as technology spreads access. [1]

Personal life

Bhatti lived in Karachi for about 10 years. He talked to his wife and moved to Lahore. [1]

Timeline

2006

Bhatti starts working with a company doing cutting-edge work.[1]

2008

Draft regulations come, according to Bhatti.[1]

2016

Finja brings in what Munawar describes as the first, second or third international investment into Pakistan.[1]

2020

Finja pivots completely during the pandemic.[1]

Appearances

Frequently asked questions

References

1. Why Finja lends to the kiryana store the banks won't touch . Thought Behind Things , 2021-09-03.