The Securities and Exchange Commission of Pakistan (SECP) has issued a concep note proposing amendments to the Non-Banking Financial Companies (NBFC) framework.Â
The proposed changes aim to introduce non-banking microfinance services as a distinct category, providing clarity for entities engaged in microfinance, according to a press release issued on Wednesday.
The amendments seek to establish a clear regulatory framework for microfinance services within the broader NBFC structure. Recognizing non-banking microfinance services as a separate category will allow the SECP to implement tailored regulations that address the specific needs of microfinance institutions.
This distinction is expected to streamline compliance processes, reduce regulatory overlap, and enhance the ability of microfinance entities to serve underserved and vulnerable populations effectively. The overlap between investment finance services, digital-only lending, and microfinance licenses has created ambiguity regarding mandatory requirements and operational scope.
With the growth of digital lending, the SECP emphasizes the need to distinguish microfinance services within the regulatory structure to address the unique requirements of both lending verticals. The commission has invited stakeholders to review the concept note and provide feedback to refine the proposed amendments, ensuring the regulatory framework evolves in line with sector needs.
