Shershah Hassan likes to say that KalPay began in a classroom. He was an undergraduate at the Lahore University of Management Sciences when, in 2020, he and a friend from school and university, Waleed Amjad Islam, started working on an idea: let Pakistanis buy what they need now and pay in three equal instalments, with no interest and no hidden charges.
Today Hassan is cofounder and chief executive of KalPay, a Lahore fintech that structures its instalment plans on Shariah principles. The company says it reached profitability in 2024, a milestone for a consumer lender, and in May that year announced a funding round led by Orbit Startups.
His story is partly one of timing and partly of constraint. He launched a lender that charges customers nothing for deferral, then watched interest rates rise sharply. The question is how a company with that model paid its way.
A classroom idea with a gap to fill
Credit card penetration in Pakistan is under one percent and close to 90 percent of transactions are in cash, figures the Forbes profile of the company cites from the World Bank. Arab News, which interviewed Hassan in June 2023, added a second statistic from the same source: Pakistan has around 100 million unbanked adults, the third largest such population in the world.
KalPay's answer was to structure its instalment plans on Shariah principles and charge nothing for the deferral. Hassan told Arab News that his research suggested most Pakistanis do not want interest based financing, and that the service was not only for Muslims. By its own account, the company aims to make Shariah aligned credit available to the country's under banked population.
How the model works
The product is a buy now pay later service. A shopper at a partner merchant divides a purchase into three equal monthly payments, made by card, e wallet or bank transfer. Because the company charges the customer no interest, its revenue has to come from somewhere else, and neither Arab News nor the company's website explains where. Its survival depends on keeping defaults low and its own cost of money down. Hassan told Arab News in June 2023 that the default ratio was in single digits, and that value and volume were growing by double digits month on month.
Financing runs from Rs2,000 to Rs500,000. The company has two further lines. KalPay Rasayi covers productive assets such as smartphones and laptops, which Hassan argued can be a source of income for freelancers and delivery riders. KalPay Taleem covers education and skills fees. ProPakistani added in May 2024 that instalment plans for local and international travel had also been introduced.
Nine months on no salary
Hassan graduated from LUMS with a BSc in 2020, in accounting and finance according to Arab News, and had already worked at Habib Bank and EY. LUMS says he has founded three companies, the first at 18.
He bootstrapped KalPay for about nine months, then raised a first investment in June 2021 and left a job at a US company to run it full time, as he told Arab News. The product went live that month. The company formally launched with Islam in October 2021, and Profit reported that its first institutional round closed in January 2022, with On Deck and Pinetree Partners as investors. Hassan said funding came from venture firms and angels in Saudi Arabia, Europe, Singapore and the United States, though no amounts were given.
By mid 2023 KalPay was working with about 500 ecommerce merchants. The company's own website now says only that it works with hundreds.
Forbes and an honour for Pakistan
The Forbes recognition came in May 2023, in the finance and venture capital category, with Hassan and Islam both aged 25 according to Gulf News. The Friday Times reported the pair as listed on 19 May 2023.
“It is an honor for me, my team and of course, for Pakistan.”
The list was not only a prize. For a startup selling a financial product to people unfamiliar with it, being named by a business magazine is a trust signal in front of merchants, investors and universities.
Growing when money got expensive
The harder test was the economy. Interest rates in Pakistan rose sharply in 2023, and Hassan was candid about what it did to a lender that charges customers nothing. The cost of capital and of financing had gone up substantially, he told Arab News, and he acknowledged that some customers defaulted.
In September 2023 KalPay and Taleem Finance Company signed a three way agreement with LUMS to let students pay semester fees in interest free monthly instalments that can be tailored to the student. Taleem Finance chief executive Kamran Azim pointed to the lack of easy educational financing as a national problem, and the partners said they planned to extend the arrangement to other institutions. The university says up to 35 percent of its students receive financial support.
Profit before scale
In May 2024 the company announced an early stage round led by Orbit Startups, with Super Capital VC, Bansea and Sabr Capital among the investors, alongside the angel investor Yaser Alghamdi. Profit magazine put the round at more than $1 million, raised in tranches and as a mix of equity and debt. Hassan told Profit that the target was met only once debt was included. About a third of the money was earmarked for consumer loans made with several financial institutions, and the rest for scaling across the verticals.
“KalPay began as a simple idea in a classroom, and seeing it become profitable is a major achievement for us.”
Profit also reported that the company had positive unit economics and EBITDA level profitability, and that it counted Foodpanda, Careem, LUMS and the University of Central Punjab among its partners. ProPakistani listed Bank Alfalah as well. Hassan said high rates made KalPay's loans dearer for users, and that he expected investor caution toward Pakistan to last more than a year.
Profitability is a claim by the company. The magazine has not seen audited accounts, and the 2024 announcement did not publish revenue, margins or default rates beyond Hassan's remark in 2023. That caveat applies to many Pakistani startups, but it matters more for a lender, whose profit depends on how losses are measured.
New backing from the Aga Khan network
In December 2025 the investor list grew to include Accelerate Prosperity, an Aga Khan Development Network initiative, which invested an undisclosed sum, Digital Pakistan reported on 29 December. The money is meant to extend the company's reach nationally. Hassan said it strengthened KalPay's ability to scale transparent, Shariah compliant financing for education and essential assets, and the report added electric vehicles to the items KalPay Rasayi finances. No customer or loan figures were given.
The unicorn question
Whether KalPay can become the fintech unicorn he once told The Friday Times he wanted it to be is an open question. The market it addresses is large: credit is scarce, cash dominates, and large parts of the population are wary of interest. A product that meets religious and practical needs together has an obvious audience.
What Hassan has shown is narrower and rarer in Pakistan's startup scene: a consumer lender that, by its own account, got to profit before it got to scale. The next stage is to prove that the same discipline survives growth, and that the cost of capital, which hurt in 2023, does not return to hurt again.
