Fintech MNT-Halan Expands with Advans Pakistan Microfinance Bank Acquisition

fintech mnt halan expands with advans pakistan microfinance bank acquisition

MNT-Halan, a financial technology (fintech) company based in Egypt, has purchased Advans Pakistan Microfinance Bank, although the exact terms of the deal haven’t been disclosed.

Established in 2017 by Mounir Nakhla, MNT-Halan provides a wide array of financial and non-financial services such as lending, “buy now, pay later” options, e-commerce, payments, and on-demand logistics. Advans, on the other hand, is a company involved in microfinance banking in Pakistan.

In February 2023, MNT-Halan managed to secure up to $400 million in both equity and debt financing to support its plans for expanding globally.

The Competition Commission of Pakistan (CCP) has given the green light for the acquisition of Advans Pakistan Microfinance Bank Limited by MNT-Halan Pak B.V., a holding company associated with a Dutch-Egyptian financial player.

The share purchase agreement between the companies was signed in August 2023, with the State Bank of Pakistan (SBP) granting its approval in October of the same year. Before the deal could be finalized, certain conditions set by the CCP needed to be met.

MNT-Halan Pak B.V., based in the Netherlands, is the parent company with subsidiaries operating in Pakistan under the names Halan Wallet (Private) Limited and Halan Finance Limited. It’s supported by MNT, a Dutch microlending company, and Halan, an Egyptian fintech startup. Both companies entered into a share swap agreement in 2021, leading to the creation of MNT-Halan, aimed at boosting digital transactions in lending and payments.

Advans Pakistan Microfinance Bank Limited is a public limited company operating in Pakistan’s microfinance sector. It’s a part of the Advans Group, which operates in nine developing countries.

Advans Pakistan Microfinance Bank Limited received its license from the State Bank of Pakistan in June 2012 to function as a microfinance bank in Sindh province. Its main focus is providing microfinance banking services to the poor and underserved sections of society, as mandated by the Microfinance Institutions Ordinance, 2001.

The bank has been experiencing financial difficulties in the microfinance market in Pakistan. It incurred losses of Rs 102 million in 2022 and Rs 256 million in 2021, following a meager profit of Rs 53.8 million. By September 2023, Advans Pakistan had accumulated losses amounting to Rs 1.3 billion, making it a struggling venture for the Advans Group internationally.

The acquisition involves the complete purchase of Advans Pakistan Microfinance Bank Limited from Advans S.A. SICAR, a Luxembourg-based financial services firm. After a thorough review, the CCP concluded that there were no overlaps between the merging entities, ensuring that market conditions would remain unaffected after the merger.

This approval holds significant implications for Pakistan’s microfinance sector, which plays a crucial role in the country’s financial inclusion efforts. According to the World Bank, this sector serves 76% of all borrowers in the financial domain and contributes to about one-third of all outstanding agricultural advances.