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Dawaai raises investment from Sarmayacar and London-based Kingsway Capital

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Dawaai – the largest digital platform catering to healthcare in Pakistan – primarily operates as an online pharmacy targeting both the B2B (retail pharmacies, medical stores and businesses) and the B2C segments across the entire country. 

Pakistan’s pharmaceutical market is estimated to be at least $3 billion in size and growing at a double-digit rate (excluding the rampant counterfeit market of $1+ billion).

Despite its size and growth, the sector remains extremely fragmented with incumbents including a handful of regional chains and a large number of single-location retail players reliant on an inefficient and expensive supply chain riddled with counterfeit products. Dawaai instead sources products directly from manufacturers and established distributors to ensure authenticity and subsequently fulfils demand aggregated across the country through its managed end-to-end logistics function. 

Furquan Kidwai, a former investment banker from London, started Dawaai in 2013 with a mission to digitize pharmaceutical logistics in Pakistan. After a prolonged period of establishing a foothold in the highly regulated and complex pharmaceutical space in the country.

Furquan’s business appears to be thriving – growing more than 6x in scale in less than a year. The increased scale has also appealed to manufacturers who previously struggled to have their products reach far-flung areas of the country, which in turn has helped Dawaai win more attractive terms from manufacturers. The challenge for Dawaai, it appears, is not the addition of customers rather ensuring efficient logistics and sufficient inventory supply to fulfil orders from across the country. 

Furquan believes: “Healthcare should be accessible and affordable for everyone, and to make that happen we are setting up the infrastructure, supply chain and logistics. The way consumers access essential items is changing fast and we expect the same trend with their healthcare needs.

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Dawaai is positioning itself to lead the charge on fulfilling that customer demand. With the capital we have raised and support of partners like Sarmayacar and Kingsway, we are focused on driving scale in the most capital efficient manner and ushering Pakistan’s healthcare system into the new era.” 

The investment round brings together Sarmayacar, Pakistan’s leading venture capital firm, together with London-based investment firm Kingsway Capital (also investors in Zameen.com’s parent entity EMPG) and San Francisco-based Mentors Fund. Rabeel Warraich, Sarmayacar’s Founder and Managing Director said: “Moving pharmaceutical products across Pakistan comes with logistical challenges, impacting margins in a price-controlled market.

This creates the opportunity for a parallel counterfeit market to thrive as consumers cannot access affordable and authentic medicines. Dawaai, in our view, is tackling these very real pain points – by aggregating demand across the country and managing logistics end to end, customers now have a company that will bring authentic drugs direct from manufacturers and distributors to their doorstep.

We believe Pakistan is quickly moving through its digital revolution and an increasing proportion of its population, much like other developed countries, will buy its drugs online in the years to come. We have absolute conviction in Furquan being the leader that will make Dawaai the protagonist in that transformation across Pakistan and beyond.”

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Digital

SadaPay to launch e-money services in Pakistan after Green Signal from SBP

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SadaPay has announced that it has been granted the in-principle approval by the State Bank of Pakistan (SBP) for an Electronic Money Institution (EMI) license. This approval allows SadaPay to ready its operations for the pilot phase, during which the digital wallet will be available on a limited scale, under supervision of the regulator. 

The startup is founded by American serial entrepreneur Brandon Timinsky, who ventured to Pakistan after his last startup in the US was acquired. Over the last year, Timinsky has assembled a team of banking veterans, liaised with the regulatory authorities, and built the foundation for a “digital first” financial institution in Pakistan. Dr. Waqar Masood Khan, Pakistan’s former Finance Secretary, has joined SadaPay as Chairman of the Board.

Pakistan is now the 5th most populous country in the world, with over 76 million 3G/4G subscribers and nearly 1 million new smartphones users coming online every month. In light of the COVID-19 pandemic, internet adoption is only accelerating and more people turn to digital solutions for everyday payments. This presents a tremendous opportunity for SadaPay not only in Pakistan, but also a number of other regional markets that the team hopes to expand to. 

“Sada” translates to “simple” in both Urdu and Arabic. SadaPay’s mission is to do away with the cost and complexities of traditional banking through their simplified digital-first experience. SadaPay offers a smartphone-based digital wallet accompanied by a free Mastercard debit card.

As soon as a SadaPay account is activated, a virtual debit card is provisioned for immediate use. Also, users can perform free and instant transfers to any bank in Pakistan, and withdraw cash from all of the 14,500+ domestic ATMs with no fees (3x per month). Furthermore, users can also load their account with cash at any of 30,000+ retail locations across the country.  

Speaking about the news on the approval, Brandon stated “It’s really amazing to see how committed the State Bank of Pakistan is to adapting to changes in consumer behavior and advances in technology. In the last few months alone, we’ve witnessed tremendous progress by SBP with the release of a number of new regulations that are certain to make an incredible impact on Pakistan’s economy by catalyzing the digitization of its financial system. We’re also very grateful for the support we’ve received from the Bank of Punjab and Mastercard, which will certainly spur our journey towards rapidly expanding financial inclusion in the country”

BRANDON TIMINSKY, FOUNDER OF SADAPAY

Speaking on the occasion, Dr. Waqar said “The role the Central Bank is playing in laying the foundations of a broad-based and user friendly digital payment system in Pakistan is laudable. These efforts have gained momentum since last July. Pakistan would soon be a leading country in digitizing its payment system and SadaPay would play a prominent role to achieve this goal”.

DR. WAQAR MASOOD KHAN, CHAIRMAN OF SADAPAY

Early access to SadaPay will be available for those who have signed up for the waitlist through the website; www.sadapay.pk. SadaPay also has a very feedback-centric approach to their product development roadmap, and they’re also welcoming suggestions via email, [email protected].

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Covid-19

Companies should avail SBP’s new refinance scheme to avoid layoff of workers and crisis due to covid-19

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To support the employment of workers in the face of economic challenges posed by the spread of COVID-19, the State Bank of Pakistan (SBP), has introduced a temporary refinance scheme for businesses entitled Refinance Scheme for Payment of Wages and Salaries to the Workers and Employees of Business Concerns.The core objective of this facility is to incentivize businesses to not lay off their workers during COVID-19 Pandemic.

The scheme will be available to all businesses in Pakistan through banks and will cover all types of employees including permanent, contractual, daily wages as well as outsourced workers. The scheme will provide financing for wages and salaries expense for three months from April to June 2020 for those businesses which do not layoff their employees for these three months.

The mark-up on the loans under this scheme will be up to 5%. Borrowers that are on the active taxpayers list, will be able to get loans at a further reduced mark-up rate of 4%. The scheme has been designed to give preference to smaller businesses. Businesses with a 3 month wage and salary expense of up to Rs. 200 million will be able to avail the full amount of their expense in financing while those with a 3 month wage and salary expense of greater than Rs. 500 million will be able to avail up to 50% of their expense. Businesses in the middle category will be able to avail up to 75 percent of their 3 months’ salary and wage expense.

The banks will not charge any loan processing fee, credit limit fee or prepayment penalties for loans under this scheme. A grace period of six months will be allowed to the borrowers while the repayment of the principal amount will be made in two years. Banks will provide weekly reporting to SBP on the take up of the scheme and in particular the reasons for any denials of financing requests under this scheme.

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SBP expects that one of the main benefits of the scheme is that employers that retain workers on their payroll will be able to restore or increase production quickly once the situation normalizes. The scheme will ease the liquidity constraints of the businesses and they can use their available financial resources to meet other working capital requirements.

Interested businesses can access details of the scheme at http://www.sbp.org.pk/smefd/circulars/2020/C6.htm and http://www.sbp.org.pk/smefd/circulars/2020/C7.htm. For further clarification for any information not available at this website, interested businesses can get further information from SBP by writing to [email protected] or calling 021-111727273 during normal business hours.

SBP has taken a number of other measures in recent weeks to mitigate the impact of covid19 on Pakistan’s economy including an extension in repayment of loan principal amounts by one year, concessional financing for hospitals to procure equipment to combat covid19 as well as other measures.

A complete list of all measures is available at http://www.sbp.org.pk/corona.asp. SBP has been closely monitoring the credit conditions faced by the businesses and households and will take every possible measure to perform its due role throughout this disruption phase.

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Covid-19

Japan offers assistance, expertise to Pakistan to fight against Covid-19

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ISLAMABAD: Ambassador of Japan, Kuninori Matsuda said Monday that the Japanese government was ready to provide its expertise and any sort of assistance to the government of Pakistan if required in the current hard times.

“Japanese Government supports the people of Pakistan in these trying times and is ready to offer its expertise and any sort of assistance to the government of Pakistan if the situation so requires,” the Ambassador told Adviser to the Prime Minister on Finance and Revenue, Dr Abdul Hafeez Shaikh during a call on meeting.

The Ambassador shared with the adviser the steps being taken by the Japanese government to contain the Coronavirus pandemic and the impact they had created so far, according to statement issued by the Finance Ministry.

The Ambassador also discussed certain issues of the Japanese investors in Pakistan arising out of the restrictions on business activities.

Hafeez Shaikh appreciated the efforts of the Japanese government to control the Pandemic and thanked it for its support to the people of Pakistan.

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