• Email Address : info@goldfin.com.pk
  • Office Address : 280, Khursheed Plaza,Maulana Shaukat Ali Rd, Kot Lakhpat, Lahore, Punjab 54600
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GoldFin Profile

Introduction

The financial industry in Pakistan holds a position of prominence, marked by the progressive outlook. It has effectively leveraged technology to promote mass financial inclusion and streamlined payment solutions. However, the development of financial products has lagged behind, failing to meet the rapidly evolving credit needs of ordinary customers and entrepreneurs. Presently, the credit stream is dominated by unsecured loans, with limited suit of secured loans backed by common collaterals such as; term deposits, property documents, vehicles/ machinery, agricultural passbooks and warehouse receipts.

Despite these developments, the centuries-old tradition of lending against gold collateral has not attracted the interest of banks and financial institutions. This lack of attention has perpetuated the dominance of the high-priced informal credit markets, where “Sonaras” (jewelers) have hold on the urban markets and “Aharties” (commission agents) hold the agriculture/ farmers. The formal microfinance sector launched in 2000: focused on research to create credit products that aligned with the sector’s ethos and unique dynamics. The gold-backed loan (GBL) emerged as a reliable secured offering, monetizing the dormant value of customers’ gold holdings (jewellery and ornaments). Over time, GBL reshaped the sector by diverting customers from high-priced informal credit markets to formal financial inclusion. The genesis of GBL in the banking sector can be traced to the Bank of Bahawalpur (of the state of Bahawalpur, later merged with Pakistan), that offered GBL to its customers. In 1974, when banks were nationalised, the Bank of Bahawalpur was merged with the National Bank of Pakistan (NBP) along with its active GBL portfolios. Later, NBP opened up GBL for its customers on a selected scale while retaining the operational model of the Bank of Bahawalpur. In 2006, Tameer Microfinance Bank (now Telenor Bank) assessed the value of gold holdings among Pakistani households and identified a vast untapped potential for using gold as collateral for loans. This discovery led to the refinement of the GBL product to address customer pain points and ensure the security of collateral through serialized, tamper-proof bags.

Customer satisfaction and trust prompted acceptance of higher markups for GBL compared to NBP’s lower offerings. Gradually, GBL became a cornerstone for nearly all microfinance banks (MFBs) in Pakistan, during the Covid-19 it emerged as a safer option when compared with the unsecured loans having high level of default. Despite these achievements, commercial banks remain hesitant to adopt GBL, citing perceived risks and market price volatility. Consequently, the tremendous potential of household gold is lying dead in lockers, homes, or pledged in the informal markets for high priced loans. At the national level, the cumulative holding of household gold is in the range of 1820 tons having a value of approximately USD 100 billions and only 2.5 % is serving as collateral for GBL. India, which has similar socio-cultural conditions has market penetration of 6 % against the gold holding of 25000 tons.

There is limited data to justify the use of GBL by farmers in Pakistan. However, in 2016, the practical juxtaposition of GBL portfolio by Tameer Microfiance Bank revealed that 55% comprised of the agriculture/ farmers. This trend is fairly close to India’s agriculture base having GBL usage of 65%. The demand for GBL among Pakistani farmers continues to rise, as the traditional “Aharrat” commission system finds it difficult to meet the growing financial needs of the farmers due to increasing cost of inputs and inconsistent price pattern that can support the repayment of credit. These challenges have made GBL an instant altenative for the financial needs of the farmers. Thus, helping them to gradually transition into the formal financial systems. In some markets, GBL may be viewed as akin to pawning, however in Pakistan, gold carries significant socio-cultural value and serves as a trusted means of family savings and a collateral for loans to meet their business needs.

GoldFin Team

GoldFin Team brings extensive experience in banking and has the distinction to raise Tameer Microfinance Bank, the first privately owned Microfinance Bank in Pakistan. The Team had an innovative approach to business marked by research and trials. It successfully introduced branchless banking in Pakistan with the launch of “Easypaisa”, that changed the financial landscape of the country with banking for “every home”. It served as the platform for extended reach and mass financial inclusion that paved the way for digitalization in the country. With the same approach; the Team identified GBL as a strong credit offering and successfully refined its traditional mode into a formidable product with scale and minimum risks.

Now, GoldFin Team aspires to upgrade GBL as an important part of the mainstream credit offering by banks and MFI, thereby trying to dilute the hold of the informal high-priced credit markets. The prime focus is to develop an echo-system that facilitates to leverage the dead asset of domestic gold holding for entrepreneurial and other financial needs of the customers. Particularly, the small urban traders (kiryana business) and the farmer with land holdings of less than 12 acres. When seen at the national level, there is an equal demand in the middle/ upper segment of the society, but they have the commercial banks to meet their credit demands leaving no room for the GBL. In the current economic scenario; commercial banks are under stress to scaleup the unsecured loan products due to high risk of default, where GBL is likely to serve as the profitable option with minimum risks.

The Founder Team

nadeem-profile
Nadeem Hussain
Chairman & Co-Founder
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Tariq Mohar
CEO & Co-Founder
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Tariq Anwar
COO & Co-Founder
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GoldFin Limited

In February 2022, the Founder Team pooled their personal capital to raise GoldFin Private Limited, as Pakistan’s first digitized aggregator platform facilitating GBL business on the balance sheets of partner banks and MFIs. In July 2022, it was converted into Public Limited Company (unlisted) in preparation for its transformation into a Non-Banking Finance Company (NBFC). Subsequent to the due diligence by the Securities and Exchange Commission of Pakistan (SECP), it was granted License as NBFC for Investment Finance Services on June 9, 2023. The unique and robust business model of GoldFin Limited (GoldFin) attracted the international investors, in March 2023, Asia Fund II Pte Limited invested USD 2 million in March 2023 as an advance against equity. Now, GoldFin is well positioned for expansion across Pakistan.

The Platform

GoldFin provides customer-friendly digital solutions for instant loans against gold (jewelry, ornaments, wafers, and bars) in collaboration with banks, financial institutions, and through its organic business. The two business streams are:

    1. Partnership Business: GoldFin collaborates with banks and financial institutions to facilitate GBL on their balance sheets. The focus is on SME, agriculture, consumer, microfinance, and salaried customers, adhering to the credit regimes of partner institutions. Founding partnerships include:
      • Damen Support Program (DSP)
      • Escort Investment Bank (EIBL)
      • Rural Community Development Program (RCDP)
      • Teleem Finance Company Ltd. (Taleem)
Negotiations are in process with the prospective partners.
  1. Organic Business: GoldFin operates its own GBL business, focusing initially on microfinance, small entrepreneurs, farmers, and salaried individuals, gradually expanding to other segments. GoldFin ensures end-to-end responsibility for its GBL business, including own safekeeping and also of the partners in accordance with the mutual agreement.

Innovative Measures

GoldFin’s forward-thinking initiatives include:

  • Machine-Based Gold Assessment: Introducing industry-first automated systems to enhance transparency and professionalism in collateral assessment.
  • Credit at Customers’ Doorstep: Offering secured mobile services equipped with qualified teams and advanced tools for on-site collateral assessment.
  • Digitization: Continuously refining the digital model to ensure regulatory compliance and quality.
  • Ecosystem Development: Establishing extended vault structures nationwide, enabling customers to deposit gold and receive “Certificates of Value” for later loans or potential integration into national reserves.
  • Savings in Gold: Develop saving products in collaboration with banks, allowing customers to purchase fractional gold amounts, thus accumulating savings over time.
  • Unsecured Loans: Introducing unsecured products for customers with improved credit profiles, targeting micro-enterprises, SMEs, and general traders.

Conclusion

GoldFin is a pioneer in promoting GBL as a vital component of Pakistan’s financial ecosystem, by focusing on customer-centric solutions and full regulatory compliance. GoldFin aims to unlock the potential of dormant gold assets, push financial inclusion and help drive formal economic growth that may ultimately outweigh the informal economy.
There is a profound hope that the success of the GoldFin operating model is going to attract more focus on NBFCs, as the vehicle for credit proliferation providing extended reach in remote areas with development of customized products / services for those isolated markets. Thus, fill the geographic gaps where banking sector is shy to move in. At the same time, it will increase the share of NBFCs in the national credit / financial services, which is presently less than 2%. The gradual shift towards NBFCs will sparkle it as the achievable destination for the upcoming Fintechs in Pakistan.

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Nadeem Hussain

Chairman & Co-Founder

Nadeem Hussain does not need introduction in Pakistan’s financial industry. He is one of the Asia’s leading social impact entrepreneurs, technology investors and financial inclusion pioneers. He is the founder of Tameer Microfinance Bank (later Telenor Bank) recognized by World Bank as the socially impactful banks in its field. Its EasyPaisa offering is the world’s second largest branchless banking payments solutions, moving more than 5% of Pakistan’s GDP. Later, he raised Planet N Group having social impact and technology investment firms with in Pakistan, Egypt, UAE and UK with focus on microfinance, fintech, data science / analytics, machine learning / AI, blockchain, and e-efforts in health, education, media and commerce.

Nadeem sees Pakistan, Egypt and the UAE as markets where digitization, data and nano-finance can have transformative social impact, furthering financial inclusion and ushering millions into the mainstream economy, while simultaneously boosting business efficiency and profitability. He is presently the Chairman of Pakistan Fintech Association and remained Chairman of Pakistan Microfinance Network for six years during that period microfinance sector became dominant with tremendous progress in all fields.

Nadeem is globally recognized for his untiring service for financial inclusion. He has chaired the United Nation’s MDG Session on Financial Inclusion, is a frequent speaker at the international forums on branchless banking and microfinance, the list is exhaustive, some of the prominent are; at Harvard University’s Kennedy School of Government in 2012, at Johns Hopkins University in 2012, where Tameer Bank was showcased as Asia’s solution to financial empowerment. Addressed the C5 convention in Geneva, while being honored with the Global Leader Award in 2011.

Nadeem has been on the Boards of: Hong Kong Commodity Exchange, Government of Pakistan Investment Advisory Board, Institute of Business Administration and recently the Board of State Bank of Pakistan. Nadeem previously spent 27 years at Citigroup in eight countries in regional management within commercial, consumer, retail and investment banking. He holds BA from Muhlenberg College, Pennsylvania, USA. Nadeem is a peoples’ man, enjoys traveling and try to spend maximum possible times with his team members and employees. A rare CEO, who travelled by road all across Pakistan to personally inaugurate the branches of Tameer Microfinance Bank.

Tariq Mohar

CEO & Co-Founder

Tariq is associated with the banking industry since 1997. In 2005, he joined Tameer Microfinance Bank (later Telenor Bank) as founder member and head of business. He was directly responsible for raising and managing the core business at the national level and articulated an operating model that was self-contained for extended reach and economies of scale with innovative integration of Easypaisa and the “bank on wheels”. Tameer created new benchmarks for the microfinance and won the prestigious awards for the years 2016 and 2017 as the “Best Microfinance Bank-” and the “Best Bank for the Unbanked”.

Before joining Tameer, he was the group head at United Bank Limited where he reorganized the government sector establishment into an agile and dynamic business support function that matched the long-term vision of the Bank and reinforced the brand image. He also served with Citibank Pakistan as Country Collections Head and turned around the business issue of collections and recovery into “the best practice of the business”. Later he took over as the Branch Banking Head and converted the loss-making liability business into a revenue engine that contributed the major share in EBIT, during the same period Citibank won the Euromoney award for being the best Bank in Pakistan.

Before joining the financial industry, Tariq had a successful army career, retired as a brigadier with extensive experience in command of troops and instructions in all the combat schools of the army. He has masters in political science, is a graduate of the Pak Army Command and Staff College and the US Army Finance School. He holds diploma of Kennedy School of Government, Harvard University, USA. Tariq is a frequent speaker on microfinance and was invited as guest speaker to Indonesia and Nigeria. He has been a senior trainer in microfinance at the National Institute of Banking & Finance under the State Bank of Pakistan.

Tariq Anwar

COO & Co-Founder

Tariq Anwar is a seasoned banker, who brings extensive experience in consumer and microfinance business covering all its critical functions. He started his career with Citibank Pakistan, later moved to Union Bank. In 2005, he joined Tameer Microfinance Bank (now Telenor Bank) as the founder member and was instrumental in raising the North business that helped to consolidate the branchless banking under the brand name of Easypaisa. Later, he assumed the position of National Business Head and rose to become the Chief Risk Officer, he left Telenor Bank in 2019 to join the founding Team of GoldFin Limited and played pivotal role in its conceptual design, raising and consolidation as the Head of Business.

He had the opportunity to refine his microfinance experience at the international level and attended “Boulder Microfinance Training”, in Italy and the “Program for Strategic Leadership in Microfinance”, at Harvard Business School, USA. In 2012, he joined the training session under World Bank and AgiFin; “Financing Agriculture Forum” at Kampala, Uganda. He is well recognized as the “Microfinance Specialist” and is a senior trainer in microfinance at the National Institute of Banking and Finance (NIBAF) under the State Bank of Pakistan.