How Finja lost a wallet war, sold its licence and kept lending to kiryana stores
The Lahore fintech began as a free mobile wallet and found its customers among small shopkeepers. Then it sold its payments licence to OPay and fell into a dispute over the price.
Finja gave away a mobile wallet called SimSim in 2017 and lost the incentive war to JazzCash and Easypaisa. In 2023 it sold its payments licence to OPay and then spent months arguing over the price. Through all of it, the one product that kept finding customers was a short term loan to the owner of a kiryana store.
A wallet that ran out of incentives
Finja was founded in Lahore in 2016 by Qasif Shahid, Monis Rahman and Umer Munawar. It began as a mobile wallet. SimSim, launched in 2017, ran with FINCA Microfinance Bank, which supplied the banking licence while Finja supplied the technology.
It was a free wallet in a market where the two big operators were willing to pay people to use theirs. According to Profit, rival wallets matched Finja's discounts, and JazzCash took SimSim's place at the Coca Cola Food Festival in Lahore the next year. The competition eventually killed the wallet.
The setback shaped the company. After the State Bank of Pakistan opened the way for electronic money institutions, or EMIs, Finja applied for a licence of its own. It received in principle approval in October 2019, was ready for pilot operations by September 2020, and won approval for commercial operation in September 2021. It also held a licence from the Securities and Exchange Commission of Pakistan to lend as a non bank finance company. Holding both, Shahid said in an earlier interview, made Finja "a featherlight digital bank".
Lending to the shop on the corner
With the wallet gone, Finja turned to small businesses that banks rarely serve, above all kiryana stores. Its karyana product financed stock bought from distributors, and loans were scored digitally rather than against collateral. It worked through supply chain partners such as FMCG principals, distributors, agritech platforms and logistics companies, which could see how a shop actually traded.
The numbers grew quickly. In 2020 the company closed a $3 million convertible note led by BeeNext and Quona Capital, with Vostok Emerging Finance also taking part, and said it had disbursed more than Rs100 million in digital loans in the previous three months. On 29 December it announced $9 million of a $10 million Series A, with ICU Ventures joining as a new investor and total funding at about $15 million. It said it had disbursed more than 50,000 loans and processed more than Rs100 billion in transaction volume, and that its assets under management had grown more than 110 percent that year.
In 2022 it raised a further $10 million Series A2, with Sturgeon Capital and HBL participating. Finja told the market that small business and consumer lending in Pakistan was a $60 billion opportunity with less than 4 percent penetration, and that its loans were funded through the credit books of partner banks. It also ran Finja Invest, a peer to peer platform recognised by the SECP. By the time it sold its EMI, the company said, it had financed more than Rs11 billion across more than 200,000 loans to over 25,000 small businesses in 35 cities.
The cost of staying compliant
Growth did not make the numbers work. Profit's March 2024 analysis put the lending company's accumulated losses at Rs910 million to January 2024. Its equity stood at Rs65 million at the end of 2023, Rs35 million short of the Rs100 million minimum capital for a non bank lender. The EMI was reported to be losing about $100,000 a month. In 2021, Profit calculated, the average loan was Rs25,000 with a 2.5 percent fee, and raising the fee to 3 percent when interest rates rose still left Finja losing money on each loan once bad debt was provided for.
Finja also bid for a digital bank licence with HBL in 2022, and neither was chosen. "When you are spending significantly to stay compliant, then you have to scale," Shahid told Profit, explaining why an EMI loses money without volume.
In April 2023 Finja agreed to sell its EMI to OPay International, a payments company founded by the Opera Norway group, for up to $2.65 million, a ceiling and not a guaranteed price. The State Bank approved the buyer in September 2023, and control passed on 2 October. Finja's statement presented the sale as a way to focus on lending, arguing that EMI 2.0 and banking as a service from banks let it disburse and collect without running its own licensed institution. Shahid said creating working capital for small businesses in Pakistan was "a hard problem to solve."
A sale that turned into a dispute
The relationship soured within months. In March 2024 Finja publicly complained that OPay had not cleared payments owed under the sale, sought State Bank support and complained to the SECP. Profit reported that OPay had paid $543,000 up front, that Finja conceded $457,000 in deductions and that Finja calculated $1.65 million remained owed. The sharpest disagreement was over about $823,000 of technology that Finja had capitalised in its accounts. After OPay took management control, its representatives told the auditor the technology had no future useful life, which reopened the minimum capital shortfall and, OPay says, lets it deduct the amount from the price.
OPay said it would not pay a penny more than what is due, and served Finja a legal notice over statements it called defamatory. Profit's April report described layoffs in the EMI team and the departure of Rahman and a Vostok representative from the three member board in mid March. Finja asked the SECP to halt or cancel the transfer of its shares to OPay. HBL, which held close to 5 percent of Finja, had served a recovery notice on a working capital loan to the lending company.
What is left
Shahid was exploring a consolidation with logistics firms, Profit reported in March 2024, and if nothing came of it Finja might have to sell its lending business and peer to peer licence. That licence is its most distinctive asset: through the platform it had lent Rs1.5 billion to between 7,000 and 8,000 customers across 25,000 loans, with about 500 individual and institutional investors.
No public update after April 2024 on the outcome of the OPay dispute or the lending company's capital position could be found. The dispute figures are Finja's own calculations, and OPay contests them. The karyana page on Finja's site still offers shopkeepers credit of up to Rs50,000 when goods are delivered, repaid in 7, 15 or 30 days at profit rates of 2, 2.5 and 4 percent.
