SECP overhauls NBFC lending rules to boost fintech and credit access

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has unveiled a comprehensive set of amendments to the Non-Banking Finance Companies (NBFC) Regulations, 2008, marking a significant shift in the country’s non-bank lending landscape. The reforms are designed to encourage technological innovation, expand access to finance, and strengthen regulatory oversight.

A key focus of the amendments is the formal recognition and regulation of modern financial services. The SECP has introduced a official definition for “Buy Now Pay Later” (BNPL) arrangements and created a new category for “Credit Guarantee Institutions” aimed at enhancing risk-sharing and encouraging lending to underserved segments.

The regulatory framework for Peer-to-Peer (P2P) lending has been substantially revamped. The changes allow for secured lending on P2P platforms and introduce higher prudential limits for individual lenders. To protect participants, platforms are now mandated to use trust or escrow accounts managed by highly-rated banks and must submit to regular IT audits.

Furthermore, new eligibility criteria for lenders on P2P platforms have been established, and platforms must create a “platform contingent fund” from their brackly newss to act as a buffer.

In a move to support small businesses, the SECP has doubled the loan size limit for microenterprise and housing finance provided by Non-Bank Microfinance Companies (NBMFCs) from Rs. 1.5 million to Rs. 3 million. The definition of “Microenterprises” has also been broadened to include a wider range of small trades and services.

To promote inclusive governance, the amendments now require NBMFCs to have at least two female directors on their boards, one of whom must be independent.

The reforms make reporting to Credit Bureaus mandatory for all NBFCs, a move expected to improve credit discipline and risk assessment across the sector. Lending NBFCs are also now required to maintain a public website with key information, including financial statements and complaint handling mechanisms.

For digital lenders, a simplified “Borrower Fact Sheet” must be used to ensure transparent customer onboarding. The SECP has also relaxed experience requirements for founders and CEOs of digital lending NBFCs to encourage young entrepreneurs.

According to the SECP, these amendments reflect its commitment to fostering a “responsible, inclusive, and technology-enabled lending ecosystem” in Pakistan.