The Securities and Exchange Commission of Pakistan (SECP) has announced a set of major regulatory reforms designed to accelerate fintech-driven lending, expand financial access, and strengthen consumer protection across Pakistan’s financial sector. The amendments, which revise the Non-Banking Finance Companies (NBFC) Regulations of 2008, aim to modernize the country’s lending ecosystem while fostering innovation and inclusivity.
Under the updated framework, experience requirements for founders and CEOs of lending NBFCs have been eased. This change is intended to encourage participation from younger entrepreneurs and startups in the regulated digital lending space, providing opportunities for new players to offer innovative financial products and solutions. The SECP’s approach signals a clear commitment to supporting the growth of fintech-driven credit models and nurturing a new generation of financial service providers.
To improve transparency for consumers, the SECP has introduced a simplified Borrower Factsheet. The factsheet provides clear information on loan terms, pricing, and borrower obligations, ensuring that customers can make informed decisions and enjoy a more efficient onboarding experience. By making lending terms more understandable, these reforms aim to build trust and enhance accountability across the sector.
A major highlight of the reforms is the creation of a new category, the Credit Guarantee Institution (CGI). These institutions are designed to improve access to credit for underserved segments by offering credit guarantees to lenders. CGIs will operate under enhanced exposure limits and sustainability standards, encouraging risk-sharing and stronger risk management practices within the lending ecosystem. This initiative is expected to open doors for small businesses and low-income borrowers who previously faced barriers to formal credit.
The peer-to-peer (P2P) lending landscape has also been restructured. The SECP has introduced securitized lending options, strengthened prudential limits, and mandated stricter disclosure requirements. These changes aim to ensure responsible platform operations, safeguard lenders, and improve transparency in digital fund flows. Additional measures focus on reinforcing the governance and financial sustainability of P2P service providers, which will benefit both investors and borrowers in the digital lending market.
For non-banking microfinance companies (NBMFCs), the SECP has doubled loan size limits for microenterprise and housing finance from Rs1.5 million to Rs3 million. The definition of microenterprise has also been revised, allowing small businesses to access higher-value credit facilities. Governance standards have been strengthened as well, with a requirement that at least two female directors, including one independent female director, serve on NBMFC boards, promoting diversity and inclusive leadership in the sector.
The reforms also enhance credit reporting, making it mandatory for all NBFCs to report to Credit Bureaus. This step will improve the quality of borrower assessments, support comprehensive credit history development, and reinforce credit discipline across the market.
Together, these initiatives represent a comprehensive push by the SECP to create a responsible, transparent, and technology-enabled lending ecosystem in Pakistan. By prioritizing fintech adoption, consumer protection, and financial inclusion, the reforms are expected to drive sustainable growth, support startups, and strengthen the resilience of the country’s financial sector over the long term.
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