China’s Ant Financial Services Group on Tuesday entered into an agreement to acquire a 45 per cent stake in Pakistan’s Telenor Microfinance Bank (TMB), a subsidiary of Norwegian telecom giant Telenor Group, for $184.5 million.
The investment marks a foray by Ant Financial, the payment affiliate of Chinese e-commerce giant Alibaba, into Pakistan.
TMB offers Easypaisa, Pakistan’s first mobile financial services platform. Launched in 2009, it has since developed into the largest branchless banking service in the country in terms of agent network, active accounts and transaction value, according to the State Bank of Pakistan. It also provides micro-finance and related financial services to the less privileged and unbanked segment of the Pakistani society.
The strategic partnership between Telenor Group and Ant Financial combines TMB’s knowledge and local market presence with more than 20 million customers, and Ant’s technology in Alipay, and other financial services, to bring mobile payment and inclusive financial services to individuals as well as small and micro businesses in Pakistan, Telenor said in a statement.
“The establishment of this partnership is well in-line with the expressed Telenor strategy of focusing our financial services efforts in emerging markets, making sure that we’re able to build and modernize the businesses in line with customer needs,” said Sigve Brekke, CEO of Telenor Group.
About 100 million adults in Pakistan don’t have access to formal and regulated financial services. This number accounts for about 5 per cent of the world’s unbanked population, which stands at 2 billion, said a World Bank report in February 2016. In May 2015, Pakistan launched its National Financial Inclusion Strategy (NFIS), a roadmap to help a country achieve its financial inclusion goals.
Pakistan’s goal is to achieve universal financial access, with a headline NFIS target of expanding formal financial access to at least 50 per cent of adults, including women and youth, and to increase the percentage of SME loans in bank lending to 15 per cent by 2020, the report added.
“Today, we are very happy to share our technology knowhow with Telenor Microfinance Bank to bring improved user experience on the Easypaisa mobile payment platform, as well as provide inclusive financial services in a transparent, safe, low cost and efficient way to the unbanked and underbanked population in Pakistan,” said Eric Jing, CEO of Ant Financial.
Telenor currently operates in 12 markets across Scandinavia, Central Eastern Europe and Asia, connecting 178 million customers.
Ant Financial is focused on serving small and micro enterprises. Its brands include Alipay, Ant Fortune, Zhima Credit and MYbank. The company has been bolstering its presence in Southeast Asia over the past one year.
In April last year, it acquired Singapore-based payment service helloPay Group. The same month, it announced a tie-up with Indonesia’s Elang Mahkota Teknologi (Emtek) to roll out a mobile payments service. In September, it announced buying a 45 percent stake in Philippines-based Globe Fintech Innovations Inc. (Mynt), a unit of Globe. Ant Financial is also present in India via its investment in digital payments firm Paytm.