ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued a concept note outlining proposed amendments to the Non-Banking Financial Companies (NBFCs) framework. These changes aim to introduce non-banking microfinance services (NBMFCs) as a distinct business category within the NBFC structure, offering greater clarity for microfinance institutions. By formally recognizing Non-Banking Microfinance Services as a separate regulatory category, the SECP seeks to implement tailored regulations that address the specific needs of microfinance entities. This distinction will streamline compliance requirements, reduce regulatory overlap, and enhance financial inclusion by allowing microfinance providers to focus on serving underserved and vulnerable populations more effectively. Currently, the overlap between Investment Finance Services (IFS), digital-only lending platforms, and microfinance licenses has created uncertainty regarding regulatory compliance and operational scope. With the rapid growth of digital lending, clearly differentiating microfinance services within the regulatory framework is essential to ensure effective governance and sectoral stability. The SECP has invited stakeholders to review the concept note and provide feedback on the proposed amendments. This collaborative approach aims to refine the regulatory framework and ensure that it evolves in line with the changing needs of the financial sector.