Karandaaz Pakistan and DigiKhata Financial Services (DKFS) have signed a strategic partnership to launch Pakistan’s first Embedded Finance Facility (EFF), a groundbreaking initiative that transforms everyday merchant payments into a pathway to formal credit for small retailers. The facility addresses two persistent challenges facing the retail sector: low adoption of digital payments and limited access to formal financing for micro, small, and medium enterprises.
Pakistan’s retail and wholesale trade remains a major contributor to GDP yet operates overwhelmingly on cash, leaving most merchants without a verifiable digital financial history and effectively invisible to lenders. The EFF breaks this cycle through a feedback-loop model where every transaction builds a merchant’s credit profile, enabling accurate scoring and progressively larger financing as their digital footprint matures. The initiative transforms Raast from a payments rail into a gateway for financial inclusion and a catalyst for formalising Pakistan’s retail economy.
Waqas ul Hasan, Chief Executive Officer of Karandaaz Pakistan, stated that by embedding credit directly into the digital payments journey, the partnership creates a self-reinforcing cycle where merchants adopt digital payments to access financing, which in turn enables them to grow and formalise. Adnan Aslam, CEO and Founder of DigiKhata, added that the partnership combines the lending infrastructure of financial institutions with DigiKhata’s extensive merchant reach and transaction data, bringing the scale, data depth, and merchant trust required to make embedded finance work at the last mile. The initiative offers a replicable blueprint for digital financial inclusion across Pakistan.
