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Pakistan’s digital banking services will be powered by Nigeria’s Kuda Bank.


A digital banking license from the State Bank of Pakistan will allow the Nigerian-born digital banking platform Kuda to power digital banking services in Pakistan (SBP). 

This license will be granted to “KT Bank,” a joint venture between Kuda and two major Pakistani businesses, making the fintech one of the five organizations eligible to win the highly sought-after national license for digital banking. 

For this license, Kuda and four other banks prevailed over 15 other candidates, including all the Pakistani commercial banks that submitted an application.

More central banks are developing frameworks and licenses to assure market optimization and enable adequate regulatory oversight of the digital banks inside their borders as the digital revolution spreads throughout financial markets around the world. Nigeria’s apex bank published a new classification of licenses for the payments system in December 2020, establishing a six-month observation time between the issuing of an approval-in-principle and the license to conduct business as a supplier of payment solutions.

Following suit, Pakistan’s central bank introduced its own license and regulatory framework for digital banks in January 2022. The SBP claims that the new licenses will promote financial inclusion and allow for a pilot program with only five licenses. Due to the limited supply of licenses, major companies in the digital banking space like the Sequoia-backed Dbank, South Africa’s Tyme Bank, and domestic fintechs like Finja were unable to compete.

However, Kuda Bank made a tactical play with their offer. In order to submit an application for the SBP’s license in June of last year, the UK-based fintech joined forces with The City School Group and Fatima Group, two prominent Pakistani organizations. The Fatima Group is a conglomeration of businesses with subsidiaries that offers a range of high-scale solutions ranging from energy to agricultural manufacture and trading, while The City School Group is one of the major private school networks in the area.

The company’s [Kuda’s] collaboration with The City School Group and Fatima Group “leverages each partner’s distinctive reach and capabilities to create a powerful proposition with enormous potential to increase financial access and affordability in Pakistan, and most noticeably, with a focus on the agriculture and education sectors” According to Kuda’s Chief Expansion Officer, Mr. Ryan Laubscher, the partnership’s top aim is to scale its partners’ inclusion-focused activities in Pakistan by offering inexpensive banking.

Local Pakistani sources claim that a number of factors were taken into consideration when evaluating each candidate, including their business plan, implementation plan, fundraising and capital plan, IT and cybersecurity strategy, experience, and financial stability. Each of the five finalists must now establish a public limited company with the Pakistani Securities and Exchange Commission in order to receive an approval-in-principle to test their solutions.

The SBP anticipates that these digital banks would offer all Pakistanis access to digital financial services, like as credit services and low-cost money transfers, encouraging financial inclusion and providing for the unbanked or underserved, much as Kuda has been able to in its native Nigeria.

Babs Ogundeyi and Musty Mustapha started Kuda in 2019. Over the course of its first three years, the company has raised more than $90 million and added more than five million customers to its customer base. The Neobank claims rapid financing, debit card services, simple and free to low-cost transactions, and more recently, international remittances from the UK. Kuda, known as “the bank of the free,” introduces Nigerians to a new era of banking that is cost-free, simple, and entirely digital. And in its newest South Asian region, the neobank is prepared to rewrite the story.

Kuda’s CEO Ogundeyi hinted that the company would use the money to be ready for continental expansion as it sought to offer banking services to “every African on the earth” in 2021 when Kuda finished its $55 million Series B financing. The African diaspora in the UK, the second-largest sender of remittances to Nigeria after the US, has seen Kuda increase its operations, despite the fact that the company’s intentions for a continental expansion have not yet come to fruition. Africa may now have to wait as Kuda concentrates on breaking into the Pakistani market, its most recent venture, where it must contend with established rivals like Easypaisa DB to gain market share.

It’s simple to make a comparison between the Nigerian and Pakistani markets from a business standpoint. When Kuda is widely embraced, the two countries’ dense populations might generate enormous volumes of transactions. 

There is no reason why the fifth most populous nation in the world couldn’t adorn Kuda with a horn if Nigeria, the most populous nation in Africa, could give Kuda its $500 million worth. For perspective, TechCrunch featured Kuda as one of the African firms on the verge of becoming a unicorn.

Can African finance firms create global solutions?, TechCabal questioned in a recent article. Kuda is joining startups like Paga and Moniepoint in saying, “Yes, we can,” in light of recent developments.




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