— CCP greenlights acquisition of Advans group’s Pakistani microfinance bank
ISLAMABAD: The Competition Commission of Pakistan (CCP) has finally given the green light to the acquisition of Advans Pakistan Microfinance Bank Limited by MNT–Halan Pak B.V., a holding company of a Dutch-Egyptian financial market player.
The share purchase agreement between the companies was signed, in August 2023, following which the State Bank of Pakistan (SBP) gave its approval in October 2023. The approval of CCP and “certain conditions precedents” needed to be satisfied before the deal was considered official.
MNT–Halan Pak B.V. is a holding company headquartered in the Netherlands, with subsidiaries operating in Pakistan under the names Halan Wallet (Private) Limited and Halan Finance Limited. MNT-Halan is backed by Dutch microlending company MNT and Egyptian fintech startup Halan, both of which entered a share swap agreement in 2021, giving rise to MNT-Halan, with the purpose of accelerating digital transactions in the lending and payments industries.
On the other hand, Advans Pakistan Microfinance Bank Limited is a public limited company active in Pakistan’s microfinance banking landscape. Advans Pakistan is the Pakistan branch of Advans group, a leading international microfinance group that operates out of nine developing countries.
Advans Pakistan Microfinance Bank Limited (APMBL), was granted a license by the State Bank of Pakistan on June 28, 2012 to operate as a microfinance bank in the province of Sindh. The Bank’s principal business is to provide microfinance banking and related services to the poor and underserved segment of the society as envisaged under the Microfinance Institutions Ordinance, 2001.
The bank has since been showing wayward performances in the scarce microfinance market of Pakistan. Advans ran a loss of Rs 102 million in the calendar year 2022, and a loss of Rs 256 million, after only earning a profit of Rs 53.8 million in 2021. As of September 2023, the accumulated losses of Advans Pakistan stood at Rs 1.3 billion. With accumulated losses accounting for more than 65% of the company’s share capital APMBL had become a bleeding business for the Advans group international.
The aforementioned acquisition entails the purchase of 100% shareholding of Advans Pakistan Microfinance Bank Limited from Advans S.A SICAR, Advans’ Luxembourg-incorporated financial services firm. After conducting a thorough review of the pre-merger application, the CCP concluded that there are no overlaps between the merging entities, ensuring that market conditions will remain unaffected post-merger.
This approval holds significant implications for Pakistan’s microfinance banking sector, which plays a pivotal role in the country’s financial inclusion initiatives. According to the World Bank, the sector caters to 76% of all borrowers within the financial domain and contributes to approximately one-third of all outstanding agricultural advances.
