Karandaaz, DKFS launch financing facility for retailers

KARACHI: Karandaaz Pakistan and DigiKhata Financial Services (DKFS) have entered into a strategic partnership to launch an Embedded Finance Facility (EFF), aimed at expanding access to formal financing for small retailers by linking credit availability with digital payment transactions.

According to a joint statement, the initiative is designed to encourage the adoption of digital payments among small merchants while addressing the limited access to formal credit faced by the retail sector.

The partners said Pakistan’s retail and wholesale trade sectors are major contributors to the country’s economy and micro, small and medium enterprises (MSMEs), but remain largely cash-based. The lack of a verifiable digital transaction history prevents many small retailers from qualifying for formal financing.

Under the Embedded Finance Facility, merchants’ digital payment transactions will be used to build their credit profiles, enabling financial institutions to assess creditworthiness and provide financing based on transaction history. The model is intended to allow merchants to access progressively larger financing facilities as their digital payment footprint grows.

The statement said the initiative seeks to leverage Raast, Pakistan’s instant payment system, as a platform to support financial inclusion and encourage greater formalisation of the retail sector.

Waqas ul Hasan, Chief Executive Officer of Karandaaz Pakistan, said embedding credit into digital payment systems would help create incentives for merchants to adopt digital transactions while improving their access to financing.

Adnan Aslam, Chief Executive Officer and Founder of DigiKhata, said the partnership combines the lending infrastructure of financial institutions with DigiKhata’s merchant network and transaction data to facilitate financing for small businesses.

According to the statement, the initiative aims to improve access to finance for participating retailers and provide a model for expanding digital financial inclusion in Pakistan.

Copyright Business Recorder, 2026