Mahaana Wealth, a digital wealth management startup in Pakistan, has closed a $2.1 million pre-seed investment.
The Securities and Exchange Commission of Pakistan (SECP) has also announced that the startup has received regulatory approval to implement technology-led investment management in Pakistan.
Mahaana will run as a non-banking finance company (NBFC) with an SECP license, allowing clients to invest money in the products Mahaana will create. According to the business, it would provide investment solutions for all types of clients and mass-market services.
Another model allows businesses to only act as investment advisors. Examples include KTrade, which offers stock investment advice, and Elphinstone Capital, which offers stock and bond investment advice.
Companies that manage assets, like Mahaana, remunerate investors as a proportion of the assets they manage. However, Mahaana will only offer digital services, differentiating it from traditional asset management firms.
Muhammad Shamoon Tariq, the founder of Mahaana and a former partner of Tundra Fonder, claimed that there are roughly 40,000 pension accounts, 250,000 stock accounts, and 50,000 mutual fund accounts in Pakistan.
Therefore, investments are nonexistent in Pakistan, and the majority of savings are made in cash or deposited into low-yielding bank accounts. Savings and pension accounts aren’t being invested adequately, so unless that condition changes, people’s financial situations won’t get any better.
Mahaana intends to introduce the Swedish pensions and savings model—based on digitization, simple onboarding, and KYC—into Pakistan. According to a statement from the company, Pakistan trails well behind Sweden in terms of individual savings rates, with only 250k individual investors base (0.02% population penetration), compared to 6mn in Sweden (60% penetration), where the savings and pension model has been in use for decades.
90% of people in Sweden have investing accounts. The social safety net is significantly larger as a result, according to Shamoon.
Shamoon Tariq did not provide any additional information other than to say that the company would be developing its savings or retirement solutions. Mahaana Wealth plans to launch in September, pending regulatory approvals.
“Investing your money is the main message we want to convey in Pakistan. It is preferable to invest your money to develop it as opposed to keeping it in your bank account, according to Shamoon.
“The company sees opportunities for every person in Pakistan to create a financial security net in the form of building their savings and retirement funds,” said Muhammad Shamoon Tariq, the founder of Mahaana and former partner of Tundra Fonder. “In a country where more than 50% of the population is under debt and spends 30% of their monthly income on repaying debts” (Sweden).
“The savings revolution in Sweden took place in the 1980s and 1990s, and it was crucial to achieving our status as a welfare state. Pakistan currently has a fantastic chance that it has to seize given its low savings rate and young population, according to Mattias Martinsson, founder of Tundra and the company’s early investor in Mahaana.
According to David Nangle, CEO of VEF, “Mahaana is addressing one of the most significant long-term financial concerns that exist in Pakistan today” with savings and pensions.
The financial infrastructure of IGI Insurance has built up capabilities that the company will be utilizing. “IGI is a crucial local partner of Mahaana and is more than just a key investor. IGI Insurance, IGI Securities, and a digital wealth management firm like Mahaana, which has a staff with a track record of fund management in international markets, have clear synergies, according to Tahir Masaud, CEO of IGI Holdings.
Image Credit: Mahaana Wealth
