Abhi partners with TPL to buy out FINCA Microfinance Bank

Abhi, the lending fintech platform best known for its earned wage access (EWA) product, announced that it has teamed up with TPL Corporation to acquire FINCA Microfinance Bank, in an announcement both companies made on Friday.

While the transaction is still subject to regulatory approvals, it represents a major advance in Abhi’s path towards becoming a fintech powerhouse in Pakistan. The company’s core business lines include various lending products, and while EWA is the one it is most well-known for, it derives the majority of its revenue from small business lending operation.

Abhi has been cash flow positive for over a year now, but being in the lending business, it is likely on the hunt for cheap sources of funding, as is just about any fintech company that is a lender. And there is no better source of cheap funding for a lender than deposits, which is why buying a bank – even a small microfinance bank like FINCA – can make sense.

There are four key reasons why lending fintechs have a tendency to pursue acquisitions of deposit-taking institutions.