MNT Halan, Egypt’s leading fintech player, is all set to acquire the operations of Advans Microfinance Bank as the State Bank of Pakistan gave its green signal for the acquisition deal recently.
According to the financial report, the transaction deal requires further legal formalities, including a No-Objection Certificate (NOC) from the Competition Commission of Pakistan (CCP). Advans Microfinance Bank is the subsidiary of Advans S. A. Sicar in Pakistan, with an ownership of a 99.99 percent stake.
The microfinance bank has been operating since 2013, with the footprint of branches expanded to 13 units within different cities of Sindh. The bank’s capital requirement stands above Rs. 745 million by the end of September 2023. Its assets stood at Rs. 5.2 billion and deposits at Rs. 3.8 billion by the end of three quarters of 2023.
By the end of 2022, the microfinance bank, with four foreign bankers on the board, maintained an ambitious plan to expand its operations from Sindh to apply for an extended license to operate countrywide.
However, the bank’s losses continued to pile up unabated in 2023. The bank reported a loss after tax of Rs. 228 million by September 2023 as against the losses of Rs. 30.9 million reported in the nine months of the previous year.
Losses brought forward surged to Rs. 1.31 billion this year as per the financial report. The bank’s profitability was severely affected by the COVID-19 pandemic and then floods in different cities of Sindh, which paralyzed the everyday lives of the residents and also damaged the businesses and assets of their borrowers with very remote chances of recovery. In 2023, the parent company of the bank, having subsidiaries in nine countries, decided to exit from Pakistan by selling its operations to MNT Hallan.
The upcoming bank is likely to be a subsidiary of Egypt’s most prominent financial group, MNT Halan, with a license for microfinance banking in the province of Sindh. MNT Halan is renowned for being created to digitally bank the unbanked and substitute cash with electronic solutions.
The bank has disbursed over $2.5 billion in loans to borrowers in Egypt. The microfinance banking industry is witnessing a consolidation in Pakistan. Besides the COVID-19 pandemic and floods, the competition among microfinance banks also grew mainly in the selected coverage areas, which apparently intensified the challenging situation of business for microfinance providers.
Are they going to operate nationwide?