Micro Finance Bank and Electronic Money Institution
At SARN Consulting, we provide professional guidance for businesses and entrepreneurs looking to establish Microfinance Banks (MFBs) and Electronic Money Institutions (EMIs) in Pakistan. Our expert consultants help clients navigate complex regulatory frameworks, ensuring compliance with the State Bank of Pakistan (SBP), the Securities and Exchange Commission of Pakistan (SECP), and other financial authorities.
Microfinance Bank (MFB) License in Pakistan
Microfinance Banks (MFBs) play a crucial role in financial inclusion, providing banking services to underserved communities. The State Bank of Pakistan (SBP) regulates the licensing, operation, and supervision of MFBs under the Microfinance Institutions Ordinance, 2001.
Licensing Authority
The State Bank of Pakistan (SBP) is the sole authority for:
Licensing Microfinance Banks (MFBs)- Regulating microfinance banking operations
- Supervising MFB compliance with financial laws
No entity or individual can operate an MFB without an official SBP license.
Eligibility Criteria for MFB License
To establish an MFB in Pakistan, applicants must meet SBP’s eligibility standards, which include:
1. Institutional Eligibility
- Entities with proven experience in microfinance, locally or internationally.
- Companies with strong distribution networks or technological expertise for financial services.
2. Individual or Group Eligibility
- Pakistani or foreign individuals/groups must first operate a Microfinance Institution (MFI) for at least three years before applying for an MFB license.
- In exceptional cases, individuals with significant experience in Microfinance, Agriculture, or SME Finance may qualify directly for an MFB license.
Disqualification Criteria for Sponsors
Individuals cannot sponsor an MFB if they:
Have been convicted of a criminal offense in Pakistan or abroad.- Have engaged in illegal financial activities, especially violations of banking and corporate laws.
- Have defaulted on financial obligations to banks or financial institutions.
Capital Requirements for Microfinance Banks
- Nationwide MFB Operations – Minimum paid-up capital of PKR 500 million.
- Province-wide MFB Operations – Minimum paid-up capital of PKR 250 million.
- District-wide MFB Operations – Minimum paid-up capital of PKR 100 million.
Sponsors must subscribe to at least 51% of the minimum capital, which is held by the SBP in custody. These shares cannot be transferred or encumbered without SBP’s prior written approval.
Application Process for MFB License
Applicants must submit a detailed business proposal that includes:
- A comprehensive feasibility study.
- A business model demonstrating financial sustainability.
- A commitment to providing inclusive banking services.
- A plan for mobilizing funds for portfolio growth.
SBP evaluates applications based on:
- Sponsors’ financial & managerial capacity.
- Business plan viability.
- Adherence to SBP’s regulatory framework.
Need assistance with your MFB license? Contact SARN Consulting for expert guidance on meeting SBP requirements!
Electronic Money Institution (EMI) License in Pakistan
The State Bank of Pakistan (SBP) regulates the Electronic Money Institutions (EMIs) to ensure secure and efficient digital financial transactions. Obtaining an EMI license allows companies to provide e-wallets, online payments, and digital financial services.
Step-by-Step Process for Obtaining an EMI License
1. Company Incorporation
- Register a Limited Liability Company (LLC) with the Securities and Exchange Commission of Pakistan (SECP).
- Choose between a Private or Public Limited Company structure.
2. Submission of EMI License Application
Applicants must submit the following documents to SBP:
- Certificate of Incorporation from SECP.
- Memorandum & Articles of Association.
- Non-refundable application fee of PKR 200,000.
- Detailed business feasibility report, including: – Five-year financial projections. – Operational plans for e-money issuance & redemption. – Delivery channels for digital payment services.
- Customer fund protection plan, including: – Trust agreement with trustees for fund security.
- Internal compliance mechanisms for: – Anti-Money Laundering (AML) compliance. – Countering Financing of Terrorism (CFT) regulations.
- List of key personnel, including: – Sponsor shareholders, directors, CEO, and executives.
- Audited financial statements (if applicable).
All submitted documents must comply with SBP’s Electronic Money Institution (EMI) Regulations.
3. Licensing Stages for EMI Approval
Stage 1: In-Principle Approval
- SBP reviews the application and grants initial approval.
- The applicant must fulfill all conditions outlined by SBP before moving to the next phase.
Stage 2: Pilot Operations
- After meeting initial requirements, the EMI is allowed to conduct real transactions on a limited scale.
- This phase helps test operational systems and validate processes before full-scale launch.
Stage 3: Commercial Operations
- Upon successful pilot testing, SBP grants final authorization.
- The EMI can now start full-scale commercial activities in Pakistan’s digital financial ecosystem.
4. Compliance & Operational Requirements for EMIs
To maintain regulatory compliance, EMIs must adhere to:
- Financial Resource Requirements – Maintain sufficient financial resources to support operations. – Implement risk management policies for secure transactions.
- IT & Cybersecurity Systems – Use secure IT infrastructure for digital payments. – Ensure data protection and fraud prevention mechanisms. – Follow SBP’s Payment Systems and Electronic Fund Transfers Act, 2007.
- Customer Fund Safeguarding – Maintain a Trust Account with a licensed bank. – Ensure customer funds remain protected from operational risks.
- AML/CFT Compliance – Develop internal controls for anti-money laundering compliance. – Prevent financial crimes by adhering to SBP’s AML & CFT regulations.
Why Choose SARN Consulting for Licensing Services?
- Expert Guidance – Our team specializes in SBP licensing procedures.
- Hassle-Free Compliance – We handle the entire application process.
- Regulatory Advisory – Stay ahead with updated SBP regulations.
- Efficient Processing – We streamline approvals to reduce delays.
- Tailored Solutions – We design customized business plans to meet SBP requirements.
Get Started Today!
Want to establish a Microfinance Bank (MFB) or an Electronic Money Institution (EMI) in Pakistan? Call us at [Your Contact Number] 
Email us at [Your Email Address] 
Let SARN Consulting help you navigate the regulatory landscape and secure your financial institution license with ease!
