Phygital system gains popularity

Attracts underbanked population as Buy-Now-Pay-Later option offers affordability

KARACHI:

As inflation skyrockets, people who are unable to purchase essential home appliances outright are increasingly turning to a phygital system that offers products on easy instalments. This system is particularly appealing to those looking for affordable solutions to acquire necessary items.

"I'm always on a tight budget, and with inflation breaking the back of the middle class, it's almost impossible to purchase hefty home appliances like refrigerators or laptops in one go. That's why I use a phygital system to get products on instalments," said Maryum Ahmed, a housewife from Buffer Zone, North Nazimabad.

Sharing her experience with The Express Tribune, she said that first she bought a mobile phone from Qist Bazaar, Pakistan's only Buy-Now-Pay-Later (BNPL) platform, which operates on a phygital system for the unbanked and underbanked. Over the next two years, she was able to purchase a washing machine, refrigerator, and other items within her budget. She explained that anybody could go through the online process and, for additional peace of mind, they could also drop by the store to check the physical products.

Syed Mohammad Faizanul Haq, an admin security official at a bank and another customer, said, "I consulted a Mufti to ensure it was permissible to buy products on instalments. He confirmed that if there is a fixed rate, it's fair. I've bought several items, including a ceiling fan and electronic devices, through this system. My relatives and colleagues also enjoy the convenience."

The platform offers Islamic Mowsawama flexible payment plans, allowing customers to spread payments over 6, 12, or 18 months, tailored to individual budgets. The simple eligibility process has enabled underserved groups like domestic workers, rickshaw drivers, students, and micro-entrepreneurs to access instalment-based financing.

As e-commerce platforms like Daraz and Foodpanda gain popularity, Qist Bazaar is also emerging as a preferred option, with physical stores in Karachi, Hyderabad, Sukkur, Lahore, and Gujranwala.

IT and Telecom Sector Analyst Muhammad Yasir noted, "This is a new and emerging business that will take time to penetrate a society. E-commerce also saves time and transport costs, especially in cities, like Karachi, plagued by traffic jams." Qist Bazaar, a fintech startup operating through a phygital system, recently secured $3.2 million in a Series A funding round led by Indus Valley Capital, with participation from Gobi Partners. Previously, Bank Alfalah invested in the platform, leading the seed round.

Licensed by the Securities and Exchange Commission of Pakistan (SECP) as a Non-bank Financial Company (NBFC), Qist Bazaar offers instalment-based payment solutions to unbanked and underbanked segments of the population. In just three years, the platform has disbursed over 55,000 product-based loans amounting to $12 million, helping Pakistanis acquire essential goods like mobile phones and home appliances through affordable monthly payments. The company has also introduced a hybrid scoring model, using both traditional and alternative methods to assess creditworthiness, making it easier for unbanked consumers to access the formal financial system.

Arif Lakhani, Co-founder and CEO of Qist Bazaar, said, "We are bringing the fundamental needs of Pakistanis within their reach. Items like ceiling fans, washing machines, and refrigerators are necessities, not luxuries, but many people can't afford them. With the support of our investors, we offer flexible payment plans to make these essential items more accessible to everyone."