Ant Financial is to invest $184.5 million for a 45% stake in Telenor Microfinance Bank (TMB) in its first foray into Pakistan. A subsidiary of Norway’s Telenor Group, TMB launched Pakistan’s first mobile financial services platform in 2009 which has become the country’s largest branchless banking service. Ant Financial is expected to introduce the technology behind its Alipay platform to develop mobile payments in Pakistan.
While India has recently become quite the battleground for Chinese tech firms—to the extent that they are proving kingmakers—this is Ant Financial’s first move into neighboring Pakistan, a country where around 100 million people (over half the population) do not have a bank account, a perfect opportunity for the likes of Alipay.
Easypaisa, TMB’s mobile financial platform in Pakistan, has over 20 million users. It offers banking and micro-finance services. Alipay’s services and user experience have seen it grow to 800 million users. TMB has recognized the need for this expertise.
“Both parties are bringing complementary skills and expertise into the partnership. Telenor has done a significant job in building a traditional microfinance and OTC business. Ant will bring world-class fintech and payment expertise to the table, bringing in the necessary digital skills to build the digital banking business in Pakistan to new standards,” Atle Lessum, VP of Telenor Group Communications told TechNode
Telenor Group was founded in 1855 and claims over 160 years of telecoms experience in 12 markets across Scandinavia, Eastern Europe, and Asia. It has 178 million customers across the world including in other Asian markets where Alipay is already active and others where it is not.
TMD appears to be popular after winning awards for its microfinance and work to provide banking for the “unbanked.” A potential outcome of the partnership and increased mobile payments would be the reduced need to carry cash and greater ease of tracking payments. Street-level and organized crime are ongoing problems for Pakistan.
China is working heavily with Pakistan on infrastructure and development projects. Unlike India, Pakistan is part of China’s vast Belt and Road Initiative which seeks to rejuvenate China’s ancient trade routes in the modern world. China is also pumping billions of dollars through Pakistan for the China Pakistan Economic Corridor project which hopes to revitalize Pakistan’s economy (and stabilize the country) by creating a link from Xinjiang to the Indian Ocean for Chinese goods.