Other investors include Accion Venture Lab and Planet
KARACHI, Pakistan, Oct. 19, 2018 /PRNewswire/ — Tez Financial Services, the first fully digital Non-Bank Microfinance Company (NBMFC) in Pakistan, today announced that it has raised USD$1.1 million in a seed round led by Omidyar Network, the impact investment firm established by Pierre Omidyar, the founder of eBay. Other investors on this round include Accion Venture Lab, the seed-stage investment initiative of global nonprofit Accion, and Planet N. Funds will help the company build its credit portfolio, enhance its mobile technology platform, and secure the company’s NBMFC license.
You can learn more about the challenge, opportunity, and impact in this video.
“Our aim is to become the primary financial service provider for the unbanked and underbanked in Pakistan,” said Nadeem Hussain, co-founder and CEO of Tez, who has more than 30 years of experience in the global financial services industry. “Tez delivers a seamless experience for our customers, providing loans in under 15 minutes as opposed to the usual month timeline from local commercial banks. Soon, we will be able to process life and health insurance claims in a similar timeframe.”
In Pakistan, more than 50 percent of the population is unbanked, with only 23 percent of the population served by formal channels, and another 24 percent by informal channels, according to the World Bank. Despite the fact that the country has 43 banks, low penetration of formal financial services including credit (14%), savings (12%), and insurance (2%) is persistent.
Most unbanked and underbanked consumers use a variety of informal financial tools to manage their finances, but those can be unreliable, expensive, and inefficient. With more than one-third of the population living below the poverty line, minor fluctuations in income can raise significant short-term financing needs. That can mean the difference between paying a bill at the end of the month, such as tuition, or buying groceries.
Mobile phones are changing all of that. The GSMA estimates that in two years, more than 80 percent of Pakistan will have 3G/4G coverage. The country already boasts 28 million mobile accounts—an indicator of consumers’ readiness to adopt digital financial services, especially in remote areas not served by traditional banking.
“New technologies, higher smartphone penetration, and falling data costs are fueling a great momentum for financial inclusion in frontier markets such as Pakistan. Tez is leveraging this to push the boundaries of banking in the country with an all-digital offering,” said Kabir Kumar, head of Policy and Ecosystem Building at Omidyar Network. “Tez’s diverse team is also well-positioned to bring about the products and services that really speak to the next generation of consumers in that country.”
“Tez marks our first investment in Pakistan, a country with a significant need for innovative products that can bring its population into the formal financial system,” said Michael Schlein, President and CEO of Accion. “By supporting Tez’s all-digital model, we can help make an important difference for millions of underserved Pakistani families and businesses.”
Tez uses some of the latest technologies, such as artificial intelligence, to analyze consumers’ digital footprint trends, social behavior, and consumption patterns in order to customize its offerings to meet each individual’s needs through an all-encompassing, easy to use app, as follows:
- Cater to their short-term liquidity needs through Tez Advance
- Enable them to park their funds in short-term savings avenues through community-led savings (Digital ROSCAs) through Tez Committee
- Provide them security and protection via health and term-life insurance Tez Bima
- Economically empower them to grow their wealth by investing in tailored investment plans through Tez Sarmaya
Tez has integrated with EasyPaisa, UBL Omni, and SimSim as its branchless banking partners, resulting in the largest combined agent network for its customers. Tez has also partnered with two of the largest insurance companies in Pakistan—EFU Life and Jubilee General—to provide life and health coverage. VentureDive is the technology partner, fostering technological innovation at a global scale, with offices in Pakistan, UAE, and Germany. Tez will soon launch additional products that will help further advance financial inclusion in Pakistan.
How it works
- Visit Google Play to download the app
- Create your Tez Account
- Get your profile verified
- Link your mobile wallet with Tez
- Choose the amount to borrow and the tenure to apply for Tez Advance
- The amount will then be deposited in the mobile wallet
Tez is available for download on Google Play and for actively disbursing credit to the masses.
About Tez Financial Services
Tez Financial Services (Tez) is Pakistan’s first fully digital Non-Bank Microfinance Company. Tez aggregates credit, savings, insurance, and investments into a single platform—a smartphone app—and provides access to these financial services from the comfort of your palm. You can learn more about Tez here: www.tez.com.pk.
About Omidyar Network
Omidyar Network is a philanthropic investment firm dedicated to harnessing the power of markets to create an opportunity for people to improve their lives. Established in 2004 by eBay founder Pierre Omidyar and his wife Pam, the organization invests in and helps scale innovative organizations to catalyze economic and social change. Omidyar Network has committed more than $1.3 billion to for-profit companies and nonprofit organizations that foster economic advancement and encourage individual participation across multiple initiatives, including Financial Inclusion, Digital Identity, Education, Emerging Tech, Governance & Citizen Engagement, and Property Rights. You can learn more here: www.omidyar.com.
About Accion Venture Lab
Accion Venture Lab is a seed-stage investment initiative focused on fintech for the underserved. Venture Lab invests capital in and provides support to innovative fintech startups that improve access, quality, and affordability of financial services for the underserved at scale. Since launching in 2012, Venture Lab has invested in more than 35 early-stage startups that operate in over 25 countries worldwide. Venture Lab is a part of Accion, a global nonprofit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. Accion catalyzes financial service providers to deliver high-quality, affordable solutions at scale for the three billion people who are left out of – or poorly served by – the financial sector. For more than 50 years, Accion has helped tens of millions of people through its work with more than 90 partners in 40 countries. For further information, visit https://www.accion.org/
About Planet N
Planet N Group of Companies focuses on Financial Inclusion and facilitation of entrepreneurship in Pakistan through technology and has added 24 companies to its portfolio across e-commerce, fintech, edutech, mobile television, retail, and renewable energy. You can learn more here: www.planetngroup.com.