Karandaaz Discovery Challenge (KDC) – Round 2

Karandaaz Pakistan is thrilled to announce its request for proposals for the second round of Karandaaz Discovery Challenge, a grant-based initiative dedicated to advancing research within the financial inclusion space. Building on past success, this round focuses on the transformative theme of digital lending for micro and small enterprises (MSEs) in Pakistan. We invite innovative research ideas that bridge knowledge gaps, spark evidence-based solutions, and accelerate the shift to digital, fostering financial deepening and formal inclusion to power Pakistan’s journey toward an inclusive digital economy.

View Terms of Reference Explore Highlights from Round 1

Thematic Area

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Digital Lending for Micro and Small Businesses in Pakistan

Micro and small enterprises (MSEs) form the backbone of Pakistan’s economy, yet remain severely underfinanced by traditional banking channels due to limited collateral, informal operations, and lack of credit histories. While microfinance has expanded, outreach still falls short of the sector’s vast financing needs. Digital lending is redefining access to finance, leveraging mobile platforms, fintech partnerships, and alternative credit scoring to lower costs and expand inclusion. However, challenges around regulation, literacy, and trust remain. This round of the Karandaaz Discovery Challenge seeks research that explores the potential of digital lending, identifies barriers, and proposes scalable solutions to sustainably bridge Pakistan’s MSE financing gap.

How to apply?

To apply for the grant, please submit your proposal by emailing it at the following address: kdc@karandaaz.com.pk, with the subject line “Proposal Submission – Karandaaz Discovery Challenge Round 2” before the deadline, 6th November 2025. Please refer to the proposal submission guidelines provided in the Terms of Reference. For any related queries, please feel free to email us at kdc@karandaaz.com.pk

Key dates

October

23

Application open

October

28

Proposal Development Workshop

November

6

Applications deadline

View Terms of Reference

Deadline: 6th November 2025

Explore Highlights from Round 1

Launched in 2023, the inaugural Karandaaz Discovery Challenge round delivered two pioneering research studies that addressed critical gaps in Pakistan’s digital finance ecosystem. The first explored how digital banks can unlock savings and investments potential among Pakistan’s 18 to 22-year-old demographic, highlighting innovative youth-focused solutions such as gamified savings and Shariah-compliant products. The second examined offline digital payment models for low-connectivity areas, revealing strong adoption potential to expand financial inclusion and reduce Pakistan’s heavy reliance on cash.

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Driving Digital Deposits

This report by Karandaaz Pakistan explores how digital banks can unlock savings potential among Pakistan’s 18 to 22-year-old demographic—an increasingly important segment that is digitally connected, financially aware, but underserved by conventional banking. Based on survey data from students across seven leading Islamabad universities, the study highlights that while incomes are modest, young people are actively saving for emergencies, education, and future goals—often preferring mobile wallets and showing a strong interest in Shariah-compliant financial products.
Digital banks are uniquely positioned to meet these needs through innovative, youth-focused solutions such as gamified savings tools, micro-investments in gold or mutual funds, automated deposits, and personalized financial guidance. These offerings can build trust and deliver value in a way that aligns with Gen Z’s expectations around transparency, ethical finance, and convenience.
The report provides actionable insights on product design, partnerships, and digital engagement strategies that can help new banks build trust and deepen financial inclusion among Pakistan’s next generation of savers.

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Offline Digital Payments in Pakistan

The Offline Digital Payments in Pakistan report explores how digital finance can reach Pakistanis excluded by poor connectivity and low smartphone use. Despite strong growth in mobile and internet banking, cash remains dominant, costing the state over PKR 155B in printing over the past decade.
The study reviews offline payment models—USSD, NFC, SIM overlays, stored-value cards—and finds strong consumer and merchant interest if solutions are secure and easy to use. Survey results show 68% of consumers and 82% of merchants are likely to adopt offline options. Pilots in transit and retail settings demonstrate that such solutions could expand financial inclusion and reduce the country’s dependence on cash.

Karandaaz welcomes proposals from all entities, individuals, or firms, with relevant expertise and experience, that demonstrate good understanding of the research theme and respond well to the defined scope. In case of a firm apply, their pre-qualification criteria are provided as follows:

  • Applicant firms must be formally registered and have a valid NTN number.
  • The firm must have an operational history of at least 2 years.

Ideally, the consultant should have demonstrated experience within the digital financial services (DFS) and microfinance sectors.

Proposals will be evaluated based on their relevance to the thematic area, strength of methodology, and potential to generate actionable insights. Specifically, applications will be assessed on:

  • Understanding of the research scope and clarity in addressing knowledge gaps
  • Robustness of methodology and practicality of the proposed approach
  • Experience and expertise of the applicant in related fields
  • Innovation, practicability and impact potential of the proposed research in shaping policy, market practices, and financial inclusion

You may refer to the detailed evaluation criteria and relevant scoring under the ‘Proposal Evaluation Criteria’ in the Terms of Reference.

The project is expected to be completed within 4 months. The exact duration will depend on the proposed methodology and work plan, and will be agreed upon at the time of grant award.

Karandaaz may select more than one winner under this discovery challenge. The total funding available is up to PKR 7.2 million, which may be awarded to a single applicant or distributed among multiple applicants, depending on the quality and scope of the proposals received.

The total grant funding available under this challenge round is up to PKR 7.2 million. This amount may be awarded to a single winner or shared among multiple winners, depending on the quality and scope of proposals. The consultant shall be responsible for making all logistical arrangements for their team required with respect to the engagement.

No. The Karandaaz Discovery Challenge focuses exclusively on the announced thematic area for each round. For this round, proposals must directly address the theme of digital lending for micro and small enterprises (MSEs) in Pakistan. Research ideas outside this scope will not be considered. Applicants are encouraged to frame their proposals in ways that align with the defined theme while bringing forward innovative perspectives and solutions.

ہمارے ماہرین کی رائے اور تازہ ترین معلومات حاصل کریں

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