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Home » Sector » FinTech » Abhi to issue Sukuk bond worth $7.1 million

Abhi to issue Sukuk bond worth $7.1 million

12 May 2023
in FinTech
Reading Time: 3 mins read
Abhi Team

Abhi announced on Friday that it had issued the first-ever Sukuk bond for a fintech in the Middle East, Africa, and Pakistan (MENAP) region. The Rs2 billion ($7.1 million) bond may create a new funding source for businesses that have had difficulty attracting capital in recent months.

Due to its strong credit ratings, creditworthiness, and profitability, the Karachi-based startup that allows salaried employees to access funds before payday reported that demand for the Sukuk exceeded expectations, with subscriptions reaching twice the anticipated amount.

Omair Ansari, CEO and co-founder of Abhi, was quoted in a statement as saying, “We are honoured to have the support of the Pakistan Credit Rating Agency (PACRA) and all the investors in launching this first-of-its-kind Sukuk.”

Ansari added, “With this new funding, we will be able to provide much-needed relief to struggling businesses through working capital financing during these difficult times.”

The Abhi platform allows partners’ personnel to withdraw salary advances based on their accrued wages at any time. These advances are funded by the fintech, so there is no impact on the partner employer’s balance sheets, and repayments are deducted from the employee’s paycheck.

In 2022, PACRA assigned Abhi a ‘AA’ long-term instrument rating and a ‘A1+’ short-term rating, allowing the fintech to issue Islamic bonds.

Abhi stated that the successful issuance of Sukuk, a financial instrument that complies with Islamic law, is a major accomplishment for the company and the financial industry in Pakistan as a whole.

“It represents a new era of financial innovation in the country and is expected to have a positive impact on the economy,” the report stated.

The startup stated that the issuance of bonds immediately followed its qualification for the international selection panel (ISP) by Endeavour and its selection by Hub71 to boost expansion into the Middle East, where Abhi is partnering with companies to financially empower them and their employees.

Abhi announced in 2017 that it had raised $17 million in a Series A funding round led by the international venture capital (VC) firm Speedinvest and supported by Global Ventures, VentureSouq, VEF, Sturgeon Capital, Rallycap, and FJ Labs.

In June 2021, the company secured a pilot investment of $2 million, led by Vostok Emerging Finance. Later, in November, it announced that it had raised additional funds, this time at a $40 million valuation, just a few months after launching its business. The quantity of funds raised during this round is unknown.

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