KIA-backed Raqami Islamic Digital Bank to launch operations in Pakistan

Pakistani lender Raqami Islamic Digital Bank aims to invest $100 million as it prepares to launch operations next month. 

The Karachi-headquartered digital lender, that is backed by Kuwaiti sovereign wealth fund – Kuwait Investment Authority – aims to rope in at least a million customers over the next three years, Bloomberg reported its CEO Umair Aijaz, as saying. 

“We are very excited to explore this opportunity of a digital bank in the small- and medium-sized enterprise space,” Aijaz said in an interview to Bloomberg in Karachi. 

Khurram Schehzad, advisor to Pakistan’s finance minister said that the launch is a strong vote of confidence in the country’s improving economic outlook and reform momentum. 

“These developments signal rising investor confidence in Pakistan and highlights the strengthening investment partnership between Pakistan and Kuwait, with deeper ties in the financial and digital economy,” he wrote in a post on social media platform X. 

The State Bank of Pakistan granted in-principal approvals to five digital retail banks in 2023, to launch online financial services, ushering in a new era of fintech innovation and greater financial inclusion. 

The move pits lenders with foreign backing such as Easypaisa Bank Limited, Raqami and Mashreq Bank Pakistan Limited against locally-backed lenders such as HugoBank and Buraq Bank Pakistan.

Mashreq Bank Pakistan is a subsidiary of UAE lender Mashreq while Easypaisa is a joint venture between Telenor Pakistan and Alipay Holding Limited, a subsidiary of Chinese fintech firm Ant Group.  

The regulator granted a digital banking license to EasyPaisa last January to commence commercial operations, with Mashreq receiving a restricted license to begin pilot operations the same month.