CCP Grants Exemption to Microfinance Bank On Non-Compete Clauses Until December 2025

The Competition Commission of Pakistan (CCP) has granted exemption over specific clauses of the Sale Share Agreement (SSA) signed between MNT Halan Pak B.V and Advans S.A SICAR as to non-compete clauses for a period till December 2025. Advans Pakistan Microfinance Bank is duly licensed by the State Bank of Pakistan (SBP) to carry out the business as a microfinance bank. The Bank has been acquired by MNT Halan Pak B.V. Meanwhile, MNT Halan Pak B.V. a Netherlands-based financial holdings company is already offering various financial services through its two Pakistani subsidiaries namely Halan Wallet Pvt ltd and Halan Finance ltd. MNT group has a diversified portfolio in other countries on digitalizing traditional banking and innovative business solutions and is also at the forefront of Egypt’s growing fintech ecosystem. Under the non-compete and non-solicitation covenants, Advans S.A SICAR, a Luxembourg-based company and also the seller of Advans Pakistan Microfinance Bank, undertakes not to engage in certain competing businesses for a specific period of time. MNT Halan Pak accordingly submitted an application to the CCP seeking exemption on relevant non-compete clauses of the SSA Agreement. The CCP while granting the exemption has included conditions that inter alia include certain disclosures and due compliance to be ensured to the SBP’s license. While allowing time-bound exemption along with conditions therein, CCP aims to facilitate a ‘relevant market’ towards improved financial inclusion as the incoming MNT group is likely to leverage its expertise for the provision of financial services to the peripheral customers that intend to avail microfinance credits. Moreover, the existing customers will also be able to benefit from the innovative tech-driven solutions being offered by the MNT group to its customers globally. The CCP grants exemption under Section 9 of the Competition Act, 2010, ensuring that such exemption offers and translates into economic benefits that outweigh any anti-competitive effects besides they promote technical and economic progress. It is envisaged that this exemption will facilitate a ‘relevant market’ of microfinance banking in Pakistan wherein players like MNT with vast experience on consumer financing and effective digital fintech would yield more choices, and better and more advanced services for customers.