Kuda gets digital banking license in Pakistan

Nigeria-based fintech Kuda is set to acquire a digital banking licence from the State Bank of Pakistan (SBP) and will be one of five companies to receive the licence. The digital banking platform will operate under the name “KT Bank”, a joint venture between Kuda and two leading Pakistani companies.

The fintech company has partnered with Fatima Group and The City School Group to apply for the SBP’s licence. The City School Group is one of the largest private school networks in the region, while Fatima Group is a conglomerate of companies with subsidiaries that offer a range of high-scale solutions ranging from energy to agricultural manufacturing and trading.

The SBP’s new licensing and regulatory framework for digital banks was launched in January 2022, with the aim of spurring financial inclusion and piloting with only five licences. The five selected companies will now incorporate a public limited company with the Securities and Exchange Commission of Pakistan, after which they will get an approval-in-principle to pilot their solutions.

Kuda is expected to provide digital financial services, including credit services and low-cost movement of money to all Pakistanis, thereby promoting financial inclusion and serving the unbanked or underserved.

Kuda was founded in 2019 by Babs Ogundeyi and Musty Mustapha, and has raised more than $90 million while expanding its customer base to over five million users.

The neobank is known for its easy and free to low-cost transactions, instant lending, debit card services, and more recently, international remittances from the UK. In 2021, when Kuda closed its $55 million Series B round, CEO Ogundeyi hinted that Kuda would use the funding to prepare for continental expansion as it seeks to provide banking services for “every African on the planet.” However, it appears that the company will now focus on penetrating the Pakistani market before expanding to other African countries.