MNT-Halan Pak B.V., a Dutch-Egyptian financial market player, has received final approval from the Competition Commission of Pakistan (CCP) for its acquisition of Advans Pakistan Microfinance Bank Limited in an undisclosed deal.
The share purchase agreement between the two entities was inked in August 2023, with the State Bank of Pakistan (SBP) granting its approval in October of the same year. However, the deal's official status awaited the fulfillment of certain conditions precedent and the CCP's approval.
Founded in 2017 by Mounir Nakhla, MNT-Halan boasts a diverse portfolio encompassing financial and non-financial services such as lending, buy now, pay later, e-commerce, payments, mobility, and on-demand logistics. In February 2023, the company secured $400 million in equity and debt financing to propel its global expansion plans.
Headquartered in the Netherlands, MNT-Halan Pak B.V. operates subsidiaries in Pakistan under the banners of Halan Wallet (Private) Limited and Halan Finance Limited. The company, formed through a share swap agreement between Dutch microlending firm MNT and Egyptian fintech startup Halan in 2021, aims to expedite digital transactions in the lending and payments industries.
Conversely, Advans Pakistan Microfinance Bank Limited is a public limited company entrenched in Pakistan's microfinance banking landscape. It serves as the Pakistan branch of Advans Group, a leading international microfinance conglomerate operating in nine developing countries.
Advans Pakistan Microfinance Bank Limited (APMBL) obtained a license from the State Bank of Pakistan on June 28, 2012, to function as a microfinance bank in Sindh province. Its core business revolves around providing microfinance banking and associated services to underserved segments, as outlined in the Microfinance Institutions Ordinance, 2001.
However, the bank's financial performance has been erratic in Pakistan's microfinance market. Advans incurred losses of Rs 102 million in 2022 and Rs 256 million in 2023, after registering a modest profit of Rs 53.8 million in 2021. As of September 2023, Advans Pakistan's accumulated losses stood at Rs 1.3 billion, representing over 65% of its share capital and rendering it a liability for the Advans Group.
The acquisition entails MNT-Halan purchasing 100% of Advans Pakistan Microfinance Bank Limited from Advans S.A. SICAR, the Luxembourg-based financial services firm of Advans. Following a meticulous review, the CCP determined that there are no overlaps between the merging entities, ensuring minimal disruption to market dynamics post-merger.
This approval bears significant implications for Pakistan's microfinance banking sector, which is crucial for the country's financial inclusion endeavors. According to the World Bank, the sector serves 76% of all borrowers and contributes to roughly one-third of outstanding agricultural advances within the financial domain.
