MNT–Halan Pak B.V., a holding company of a Dutch-Egyptian financial market player, has finally received approval from the Competition Commission of Pakistan (CCP) to acquire Advans Pakistan Microfinance Bank Limited.
August 2023 saw the signing of the companies’ share purchase agreement, which was approved in October 2023 by the State Bank of Pakistan (SBP). The agreement had to be approved by the CCP and meet “certain conditions precedents” in order to be deemed official.
With operations in Pakistan under the names Halan Wallet (Private) Limited and Halan Finance Limited, MNT–Halan Pak B.V. is a holding company with its headquarters located in the Netherlands. The goal of MNT-Halan is to speed up digital transactions in the lending and payments industries. It was founded in 2021 by a share swap agreement between Dutch microlending company MNT and Egyptian fintech startup Halan.
However, Advans Pakistan Microfinance Bank Limited is a publicly traded business that operates in Pakistan’s microfinance banking market. Advans Group, a well-known global microfinance organization with operations in nine developing nations, has Advans Pakistan as its Pakistani branch.
The State Bank of Pakistan authorized Advans Pakistan Microfinance Bank Limited (APMBL) on June 28, 2012, to conduct business in the province of Sindh as a microfinance bank. As specified by the Microfinance Institutions Ordinance, 2001, the bank’s main line of business is to offer microfinance banking and associated services to the underprivileged and impoverished segments of society.
Since then, the bank has been performing erratically in Pakistan’s small microlending market. Advans saw a loss of Rs 102 million in 2022 and Rs 256 million in 2021, despite only making a profit of Rs 53.8 million in 2021. Advans Pakistan had accrued losses of Rs 1.3 billion as of September 2023.
APMBL had become a bleeding business for the Advans group international, with cumulative losses totaling over 65% of the company’s share capital.
The financial services company Advans S.A. SICAR, which is incorporated in Luxembourg, is selling 100% of Advans Pakistan Microfinance Bank Limited as part of the previously mentioned acquisition. The CCP determined that there are no overlaps between the merging entities after carefully reviewing the pre-merger application, guaranteeing that the post-merger market conditions won’t be impacted.
The microfinance banking industry in Pakistan, which is essential to the nation’s efforts to promote financial inclusion, will be greatly impacted by this approval. A third of all outstanding agricultural advances are financed by the sector, which serves 76% of all borrowers in the financial domain, according to the World Bank.
