NBFC & Business Finance
Licensing a Non-Banking Finance Company with SECP to lend, lease, or manage funds for businesses — from incorporation through to the SECP licence itself.
NBFC & Business Finance overview
A Non-Banking Finance Company is a business that provides financing — lending, leasing, investment, or asset management — without holding a banking licence. That distinction matters legally, not just commercially: NBFCs cannot accept demand deposits the way a bank does, and they answer to a different regulator entirely. Where banks and EMIs are licensed and supervised by the State Bank of Pakistan, NBFCs are incorporated under the Companies Act, 2017 and licensed by the Securities and Exchange Commission of Pakistan under the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 and the Non-Banking Finance Companies and Notified Entities Regulations, 2008. For a business whose model is providing capital to other businesses — leasing equipment, extending investment finance, or managing pooled funds — an NBFC licence is very often the correct structure, and getting the category and capital structure right at incorporation avoids a costly restructuring later.
SECP Incorporation & Structuring
Entity structure, sponsor shareholding, and capital set up to satisfy SECP’s fit-and-proper review from the outset, not retrofitted after a licensing setback.
NBFC Licence Application
Preparing and filing the licence application for the correct NBFC category with SECP’s Licensing Department.
Ongoing SECP Compliance
Prudential regulations, capital adequacy, and periodic reporting once the licence is granted — a standing obligation, not a one-time filing.
Which NBFC category fits the business
Since a 2015 amendment to the regulations, SECP splits NBFCs into two broad categories — Lending NBFCs and Asset Management NBFCs — each covering several specific licence types underneath.
Lending NBFCs
Covers Investment Finance Services, Leasing, Housing Finance Services, Discounting Services, and Non-Bank Microfinance Companies (NBMFCs). This is the category for a business whose core model is extending credit — equipment or vehicle leasing, term financing, housing loans, or invoice discounting — to other businesses or individuals.
Asset Management NBFCs
Covers Asset Management Companies (AMCs) that manage collective investment schemes and pension funds, and Investment Advisory NBFCs. This is the category for a business managing pooled investor capital rather than lending directly.
Venture Capital & Private Equity
Venture capital and private equity fund management also falls within the NBFC framework, licensed alongside the categories above where the vehicle is structured as a company rather than a fund managed under separate SECP fund regulations.
The NBFC formation and licensing procedure
SECP’s own published methodology for forming and licensing an NBFC, followed in sequence.
Apply for a No Objection Certificate (NOC) to form an NBFC
Submit an application to SECP’s Licensing Department for permission to incorporate a company for the purpose of NBFC business, before the company itself is formed.
Incorporate the company
Once the NOC is granted, incorporate as a public or private limited company under the Companies Act, 2017, with a capital structure sized for the intended NBFC category.
Meet the minimum equity requirement for the category
Minimum equity varies significantly by NBFC category and is periodically revised by SECP — historically ranging from roughly PKR 50 million at the lower end to PKR 1 billion or more for categories such as investment finance services, so the current threshold needs to be confirmed against SECP’s latest schedule before capital is committed.
Satisfy the fit and proper criteria
Directors, sponsors and key executives are assessed against SECP’s fit and proper test — professional experience, integrity, and financial soundness — before a licence is granted.
Apply for the NBFC licence itself
File the licence application for the specific category — Investment Finance Services, Leasing, Housing Finance, or another — with supporting documents under the checklist SECP publishes for that category.
SECP review and licence grant
SECP reviews the application, the company’s governance structure, and its compliance manual before issuing the licence to commence business.
Ongoing prudential compliance
Capital adequacy, asset classification and provisioning, and periodic reporting to SECP once operational — the NBFC Regulations set out prudential requirements that continue for as long as the licence is held.
Where this is heading
SECP has continued amending the NBFC framework in recent years — including relaxations to ease the transition of microfinance institutions into Non-Bank Microfinance Companies, and a 2022 update to the NBFC Rules removing some of the older approval requirements around subordinated loans, in line with SECP’s broader push toward easing the cost of doing business. SECP has also published a dedicated procedural guidebook for NBFC formation and licensing to make the process more transparent for prospective applicants. This is an active area of regulatory development, and KBL & Associates is building out this practice specifically to track it as it evolves.
Governing law & regulators
The statutes and regulatory bodies that actually govern NBFCs in Pakistan.
Base incorporation statute; an NBFC is a company incorporated under this Act before it is licensed as an NBFC.
secp.gov.pk →Governs the formation and establishment of NBFCs, including the NOC and incorporation stage.
secp.gov.pk →The comprehensive operating framework for licensed NBFCs — capital, governance, prudential and reporting requirements.
secp.gov.pk →Establishes SECP as regulator of the corporate sector, capital markets, and the NBFC sector specifically.
secp.gov.pk →Common questions, answered directly
You first incorporate a company under the Companies Act, 2017, then apply for a No Objection Certificate from SECP, meet the minimum equity requirement for your intended category, and file the NBFC licence application under the NBFC Rules, 2003.
Minimum equity varies by category and is periodically revised by SECP — historically ranging from roughly PKR 50 million at the lower end to PKR 1 billion or more for categories such as investment finance services. The current threshold should be confirmed against SECP’s latest schedule.
SECP splits NBFCs into Lending NBFCs (investment finance, leasing, housing finance, discounting, non-bank microfinance) and Asset Management NBFCs (asset management companies, investment advisory), plus venture capital and private equity fund structuring.
No. NBFCs cannot accept demand deposits the way a licensed bank does — this is the key legal distinction between an NBFC and a bank, and why NBFCs are regulated by SECP rather than the State Bank of Pakistan.
Other practice areas
Foreign-backed lenders and lessors
NBFC licensing for investment finance, leasing, housing finance and lending companies is regularly instructed by foreign-backed sponsors. Shareholding structures, fit-and-proper documentation and the SECP application are managed from Lahore.
Overseas instructions are a routine part of the firm’s work rather than an exception. Where a matter also touches family law — guardianship, succession or a child’s documents — it is handled by the same firm rather than referred out. See child adoption and guardianship from Pakistan or all thirteen practice areas.