In 2017, Pakistan’s fintech sector was in its infancy but gaining steady momentum. Driven by mobile penetration, a youthful demographic, and the State Bank of Pakistan’s (SBP) vision of financial inclusion, the landscape began to shift from traditional banking to technology-driven financial solutions. Fintech firms, telecom operators, and banks were increasingly experimenting with branchless banking, mobile wallets, and digital payments.

JazzCash and Easypaisa led the market, offering mobile wallet services to millions of unbanked Pakistanis. Easypaisa, a product of Telenor Microfinance Bank, had already established a vast agent network across rural and urban areas. By 2017, Easypaisa had reached over 20 million users, while JazzCash boasted significant growth after partnering with Mobilink’s subscriber base and financial institutions. These services enabled peer-to-peer transfers, bill payments, and mobile top-ups — laying the groundwork for deeper financial engagement.

The regulatory environment also began to adapt. The SBP launched the 'Branchless Banking Regulations' and promoted the use of Asaan (basic) accounts with simplified KYC procedures. It was also drafting frameworks for digital payments providers and electronic money institutions (EMIs), acknowledging the importance of fintech in driving the national financial inclusion agenda. The National Financial Inclusion Strategy (NFIS), backed by the World Bank, outlined targets to increase account ownership, digital payments, and SME credit.

New startups entered the scene. Finja, launched in 2016, began offering digital lending solutions for SMEs and salaried individuals. CreditFix and Tez Financial Services also started experimenting with credit scoring models using alternative data such as mobile usage and social behavior. SimSim, a digital wallet developed by FINCA Microfinance Bank, went live in 2017 with ambitions to provide interest-free mobile accounts and microloans.

Despite progress, Pakistan’s fintech sector faced considerable obstacles. The cash-based economy, low digital literacy, and lack of trust in digital transactions hindered adoption. Internet connectivity, though improving, remained unreliable in remote areas. Moreover, collaboration between banks and fintechs was limited, often stifled by legacy mindsets and risk aversion in the traditional banking sector.

However, the long-term potential was clear. According to a Karandaaz Pakistan study, only 23% of the adult population had access to formal financial services in 2017. This gap represented a massive opportunity for inclusive fintech solutions. As mobile phone usage approached 140 million subscribers, and smartphone adoption accelerated, digital financial services were poised to become mainstream in the coming decade.

References:

[1] State Bank of Pakistan – Branchless Banking Newsletter 2017. https://www.sbp.org.pk

[2] Karandaaz Pakistan – Fintech Ecosystem Report 2017. https://www.karandaaz.com.pk

[3] GSMA Mobile for Development – Mobile Money in Emerging Markets Report, 2017. https://www.gsma.com