Haball, a leading digital solutions provider, has been chosen by the State Bank of Pakistan (SBP) as the Multibank Technology Platform Service Provider for Supply Chain Financing (SCF). This selection comes after a rigorous and transparent bidding process, where Haball demonstrated its expertise in digitizing supply chain collections and streamlining business processes for its clients.
The SBP had invited expressions of interest (EOI) for the technology platform in October 2022, and Haball stood out among other bidders due to its unique offerings that had not been utilized in Pakistan before.
Omer Bin Ahsan, the CEO of Haball, highlighted that one of the key factors that set them apart from other bidders was the absence of similar solutions in Pakistan.
Furthermore, Haball’s successful implementation of the first fully digital and Islamic supply chain financing, boasting a recovery rate of over 90%, played a significant role in their selection.
Bin Ahsan emphasized that this “productive lending” approach would provide small businesses with a distinct avenue to access capital, aligning with Shariah principles. This innovative solution comes at a crucial time when businesses are grappling with soaring inflation and interest rates.
Pakistan is home to approximately 5.2 million small and medium-sized enterprises (SMEs). Unfortunately, only a mere 0.25 percent of these businesses can avail digital banking services, leaving the majority reliant on traditional brick-and-mortar operations.
Typically, the process of obtaining financing can take anywhere between 2 to 3 days, involving extensive due diligence, such as physical inspections of warehouses and stock verification.
Haball, however, asserts that by leveraging real-time inventory data, digital offer and acceptance, transparent fund utilization tracking, and digital confirmation of sales, this process can be significantly reduced to a mere 15 seconds.
Haball’s flagship product, Wisaaq, has already gained tremendous traction. In just five months since its launch, Haball processed a staggering $21 million and facilitated $12 million in digital payments, as per the company’s news release.
Wisaaq has empowered manufacturers and SMEs by equipping them with the necessary tools to minimize cash transactions, accelerate the reconciliation and financing processes, all while adhering to Shariah principles.
Pakistan’s supply chains present a $5 billion opportunity for digitization, with approximately 1.5% of that value currently being handled manually through financial services. This figure illustrates the immense potential for the SCF Multibank Technology Platform to capitalize on the digitization of supply chain payments.
Speaking at the Cashless Supply Chain Event 2022, Dr. Inayat Hussain, the Deputy Governor of the State Bank, underscored the platform’s ability to offer banks numerous cross-selling opportunities due to the wealth of information available on distributors.
Looking ahead, Omer Bin Ahsan addressed the risk management protocols in place and highlighted that all banking-side processes, including credit assessment, onboarding, disbursement, and recovery, adhere to stringent security standards similar to those followed by private banks.
He further emphasized that Haball’s business model, requiring minimal capital and operating on profitable unit economics, primarily focuses on strategic investments and business growth.
Bin Ahsan also expressed confidence in the company’s continued growth, particularly with the new order from the State Bank of Pakistan, which may necessitate collaboration with 10 to 12 banks in the next two years.
Haball’s solutions offer companies enhanced access to working capital, alleviate receivables burden on corporate balance sheets, and provide secure and agnostic digital payment solutions with same-day settlements, presenting opportunities for cross-selling.
These advancements pave the way for long-term economic growth across Pakistan and promote the inclusion of Islamic finance.
The selection of Haball as the SCF Multibank Technology Platform Service Provider aligns with the State Bank’s ongoing efforts to foster Islamic financing. This is particularly relevant following the Federal Shariat Court’s recent ruling on the adoption of Islamic banking and the Federal Government and State Bank of Pakistan’s prioritization of developing a structured implementation plan for Riba-Free banking.
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By leveraging the principles of transparency, fairness, and risk-sharing inherent in Islamic finance, SMEs and corporate supply chains can expand their business operations while benefiting from the liquidity offered by banks. This strategic partnership between Haball and the State Bank of Pakistan heralds a new era of digitization and growth for the Pakistani business landscape.
