KARACHI: Pakistani fintech firm Oraan has raised $3 million in the largest seed funding closed by a women-led startup in the country, the company said on Monday.
The startup was founded in 2018 by former investment banker Halima Iqbal and design strategist Farwah Tapal, both of whom said they faced difficulty in accessing financial services when they moved back to Pakistan three years ago. Focusing on gender-specific innovation, Oraan has designed products and services around credit, insurance and savings in Pakistan – home to five percent of the world’s unbanked female population.
“Oraan was founded when we realized that the large majority of the Pakistani population struggles to access financial services simply because they are not designed for them,” said Iqbal, chief executive officer and co-founder at Oraan. “While there is a demand among women for credit, insurance and savings services, they are unable to approach financial institutions due to mistrust, complexity of products and challenges around mobility.”
Oraan today boasts a community of over 10,000 savers, 84 percent of whom are women, from over 170 cities, according to Faisal Chowdry, a general partner at Zayn Capital, which co-led the financing round with Wavemaker Partners.
Women use Oraan committees to save, borrow, build emergency funds and achieve other goals like travel and pay for education, working capital and medical treatments. The committees, the startup’s flagship product, are a digital reimagination of the Rotating Saving and Credit Associations (ROSCAs), an age-old method of group saving and credit in South Asia. They are also known as ‘beesees’ in Pakistan and used by 41 percent of the Pakistani population, with up to $5 billion rotating annually.
Using the Oraan app, savers are able to sign up for committees that suit their needs and save with groups beyond their immediate geographical and social networks.
Gavin Lee, general partner at Wavemaker Partners in Southeast Asia, said with half of Pakistan’s 200 million population being women, the country had one of the most serious gender gaps in banking access in the world.
“We believe that designing a female-friendly financial product to help women access the banking system, and in turn allow them to access credit, insurance, and investment, is one of the most critical ways to promote sustainable economic growth in Pakistan,” Lee said.
Oraan says it will use the latest round of funding to accelerate its expansion into other products that will position the company to become Pakistan’s first women-first digital, social bank.