KalPay: the Pakistani lender that chose profit before scale
A Shariah aligned buy now pay later service launched into a cash economy just as borrowing costs soared. It survived by raising little, working with merchants and lending for school fees.
When KalPay went live in June 2021, buy now pay later was the hottest category in fintech, but the Pakistani thesis was different. Fewer than one in a hundred adults held a credit card and roughly 90 per cent of transactions were in cash, figures Forbes cited from the World Bank in its 2023 profile of the company. The opportunity was to offer credit to people who had never had any, in a form their faith permitted.
Shershah Hassan and Waleed Amjad Islam, school and university friends, started on the idea in 2020 while Hassan was finishing a BSc at LUMS. They bootstrapped for about nine months, raised a first investment in June 2021 and formally launched in October that year, Hassan told Arab News in June 2023. The product: buy from a partner merchant and pay in three equal monthly instalments, by card, e wallet or bank transfer, with no interest and no extra charges. The company says the plans follow Shariah finance principles; it has not published details of the contract structure it uses.
Finding merchants in an online bazaar
KalPay's first customers were ecommerce stores. By June 2023 Hassan put the merchant count at about 500, and the ticket size at anywhere from Rs2,000 to Rs500,000. Partnerships with larger platforms gave it reach: Forbes and The Friday Times name Foodpanda and Careem, and in September 2022 KalPay signed with Muawin, a B2B lender, to run end to end digital financing for its retailers.
Two verticals followed. KalPay Rasayi finances productive assets such as smartphones and laptops. KalPay Taleem finances education and skills fees, and it is where the company found institutional partners. In September 2023 KalPay and Taleem Finance Company signed a tripartite agreement with LUMS to let students pay semester fees in interest free monthly instalments; the University of Central Punjab is also listed as a partner, and in October 2025 The Millennium Education signed a memorandum of understanding covering tuition, courses and laptops.
Small cheques, in tranches
The money came in modest amounts. A round in January 2022 brought in On Deck and Pinetree Partners, Profit reported. Forbes listed Singapore's Sabr Capital, which backs Shariah compliant ventures, among the company's investors by May 2023. The cofounders were named to the Forbes 30 Under 30 Asia list that month, in the finance and venture capital category.
Then rates went up. For a company whose own borrowing funds interest free consumer loans, the rise in Pakistani interest rates through 2023 and 2024 was a direct hit. The cost of capital had risen substantially, Hassan told Arab News, and the high rates made its products more expensive for end users, he told Profit.
“Now that we are able to cover the operating costs, we will be scaling rapidly across all our verticals.”
KalPay's response was to get to break even before raising again. In May 2024 it announced an early stage round led by Orbit Startups, with Super Capital VC, Bansea, Sabr Capital and the angel investor Yaser Alghamdi participating. The company did not disclose the amount; Profit reported it exceeded $1 million, raised in tranches as a mix of equity and debt, with about a third earmarked for funding consumer loans. KalPay said it had reached profitability at the EBITDA level. It was the first Pakistani startup round announced that year, Profit noted.
Still standing in 2026
In December 2025 Accelerate Prosperity, an initiative of the Aga Khan Development Network, invested an undisclosed sum to help KalPay expand nationally and finance more households' education and essential assets, Digital Pakistan reported. The website was live in October 2026. KalPay has never published user numbers, loan volumes or revenue, and its merchant count has not been updated since 2023, so the scale of the business is the company's word. What is on the record is rarer: a Pakistani consumer lender that says it makes money.
