The Securities and Exchange Commission of Pakistan (SECP) has unveiled a series of sweeping reforms to the lending framework for Non-Banking Finance Companies (NBFCs), aiming to strengthen fintech-led lending, enhance access to finance, and improve consumer protection across the country. The regulatory amendments, based on the NBFC Regulations, 2008, are expected to open new opportunities for startups, digital lenders, and underserved borrowers while promoting transparency and risk management in the financial sector.
One of the most notable changes is the relaxation of experience requirements for founders and CEOs of lending NBFCs. By lowering these barriers, SECP is encouraging young entrepreneurs and startups to enter the regulated digital lending ecosystem, creating a more dynamic and competitive market for financial technology services.
To increase transparency and simplify the borrower experience, SECP has introduced a streamlined Borrower Factsheet. This tool provides borrowers with clear information on loan terms, pricing, and obligations, ensuring that customers can make informed decisions before taking on financial commitments.
Another key development is the introduction of Credit Guarantee Institutions (CGIs), designed to expand credit access to underserved segments of the population. CGIs will provide guarantees to lenders, encouraging risk-sharing and responsible lending, while operating under enhanced exposure limits and sustainability standards. This move is expected to strengthen the resilience of the lending ecosystem and foster financial inclusion among small businesses and individuals who previously struggled to access formal credit.
The peer-to-peer (P2P) lending sector has also been restructured under the new regulations. The framework now includes securitized lending options, reinforced prudential limits, and stricter disclosure requirements. These measures aim to safeguard lenders, ensure responsible platform operations, and enhance transparency in digital fund flows, promoting trust and accountability in the growing fintech landscape.
Non-banking microfinance companies (NBMFCs) will benefit from higher lending ceilings, with loan size limits for microenterprise and housing finance doubled from Rs1.5 million to Rs3 million. Additionally, the definition of microenterprise has been revised, allowing a broader range of small businesses to access higher-value credit facilities, further promoting entrepreneurship and economic growth.
Governance reforms are also central to SECP’s agenda. NBMFC boards are now required to include at least two female directors, including one independent female director, enhancing gender diversity and inclusive leadership within the sector. Furthermore, credit reporting has been tightened, making it mandatory for all NBFCs to report to Credit Bureaus. This measure will strengthen credit history development, improve borrower assessments, and foster better credit discipline across Pakistan’s financial system.
Overall, these reforms reflect SECP’s vision for a responsible, transparent, and technology-driven lending ecosystem. By combining regulatory flexibility with robust governance and consumer protection measures, the initiatives aim to accelerate fintech innovation, broaden financial inclusion, and ensure sustainable growth in Pakistan’s financial sector.
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