SECP proposes amendments to recognize non-banking microfinance

March 19, 2025 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has issued a concept note proposing amendments to the Non-Banking Financial Companies (NBFC) framework to introduce non-banking microfinance services as a distinct business category within the regulatory structure.

The proposed changes aim to establish a clear and dedicated regulatory framework for microfinance services within the broader NBFC ecosystem.

Recognizing Non-Banking Microfinance Services as a separate category, shall enable the Commission to provide tailored regulations that better accommodate the unique needs of microfinance institutions.

This distinction will help streamline compliance processes, reduce regulatory overlap, and enhance the ability of microfinance entities to focus on serving underserved and vulnerable populations effectively, according to the press release issued today.

Currently, overlaps between investment finance services, digital-only lending, and microfinance licenses create ambiguity regarding mandatory requirements and operational scope.

As digital lending continues to expand, SECP underscores the importance of clearly distinguishing microfinance services to address the specific needs of both lending verticals.

SECP has invited stakeholders to review the concept note and provide feedback to help refine the proposed amendments, ensuring that the regulatory framework evolves in line with industry needs.

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