Karandaaz Fleet Financing Programme with BAFL
Karandaaz Pakistan enabled Bestway Logistics Services, a transportation company to expand its fleet and operations.
When Malik Matiullah started Bestway Logistics Services in 1997, he could not have imagined that managing the business’s growth will become a challenge one day. Given that this transportation business began with only two vehicles, one can’t blame him for not being able to foresee the day its fleet would exceed a number of 50 vehicles.
This growth and expansion has resulted after many challenges but despite the financial, human resource, and other challenges he faced, Matiullah was persistent. Today his business has expanded not only in terms of vehicles and human resource but provides multiple solutions and services. Bestway Logistics Services provides transportation of goods, fleet across Pakistan, clearing and forwarding processes with Pakistan customs, and transporting those items across the country and shipping across the nation. With 10 oil tankers, 10 flat bed trailers, 15-container transport, 15 cranes ranging between 20 and 50 tons in its asset inventory, Bestway believes that this is just the beginning.
In the initial years, the business faced a plethora of challenges ranging from finances to human resource, mechanisms, guidelines and balance checks. While the business was able to overcome most of these challenges with time, acquiring finance and managing it is a problem that the business faces even today.
According to Rehman Akbar, Chief Financial Officer Bestway Services, cash flow management is crucial for all businesses, particularly small businesses. To effectively manage cash flows, businesses often have to seek financing, which is a great challenge in Pakistan. When Bestway Services needed to invest in more vehicles to increase its fleet and services, it looked at several sources of financing. None of them suited the needs of the business and therefore Bestway opted for a financing programme run by Alfalah Bank under the bank’s risk participation partnership with Karandaaz Pakistan.
Karandaaz Pakistan, with the funding from UK’s Department for International Development (DFID), understands the potential of the SME sector and is working to promote access to finance for micro, small and medium – sized businesses through a commercially directed investment platform, and financial inclusion for individuals by employing technology-enabled solutions. These solutions include Karandaaz Capital, which provides wholesale structured credit and equity-linked direct capital investments to micro, small and medium -sized enterprises (MSMEs) that demonstrate compelling prospects for sustainable business growth and employment generation in Pakistan.
Bank Alfalah Limited (BAFL) is a leading commercial bank in Pakistan with a major focus on building a premier SME and digital banking franchise. BAFL has introduced a series of innovative SME focused credit programmes. Through a GBP 20 million risk participation facility agreement, Karandaaz committed GBP 5 million and BAFL committed GBP 15 million respectively to scale up five SME product programmes designed by BAFL and Karandaaz in partnership. The product programmes included commercial fleet, supply chain, POS merchant, Telco franchise and dairy supplier financing.
The financing from Bank Alfalah under this partnership with Karandaaz not only enabled Bestway Logistics Services to invest in 4 new trucks but also led to hiring more human resource and the development of existing workers. Muhammad Waris, a Forman who works at Bestway Logistics Services since 2004, admits that he has grown immensely ever since he first joined. “15 years ago, I joined as a driver. After driving the vehicles for 6 years, I was promoted to a Forman where I am in-charge of overseeing vehicles, their maintenance, and loading or unloading off the vehicles. I earn more money and am able to provide a better lifestyle to my family. My children are now going to better schools and gaining better education”, he added. Not only does this show the impact on Waris’s life but also points towards the many ways the business is impacting the lives of his family and future generations too.
Waris is only one of the many employees whose lives have been impacted through the expansion of Bestway Services. With every truck that the company purchases, at least three to four people get direct employment and so many others get indirect benefits.
Bestway Services is now in its third generation and Matiullah is proud that his sons and nephews are joining the business after pursuing specialized education from abroad. He understands that the future generation may lead the business in different directions according to their own wisdom but for him that’s the beauty of running a business through generations.
For now, the next project for the business is a bus service by the name of Bestway Movers, which will be launched in the next few months. This bus service will take passengers from city to city across Pakistan. It is going to be a new line in the portfolio of the business, one that has the potential for immense growth and expansion. Matiullah believes this added line would not only take the business ahead but will also help in providing livelihood to hundreds of people.
Among the many challenges that Bestway Services faces every day, the China Pakistan Economic Corridor (CPEC) is a challenge for the transportation industry too. Currently, the industry is accustomed to operating from Karachi. “We are open to exploring the opportunities in Gwadar but Karachi will remain Pakistan’s hub and business cannot be completely shifted from here. Karachi is connected not only to the entire Sindh but also Punjab and the entire Pakistan. And it is for this reason that we will always operate from Karachi”, claims Matiullah. His future generation also understands that operating from Gwadar in the coming years may give an opportunity to expand the business exponentially.
There may be a million challenges of operating a small-scale business in Pakistan but Matiullah still claims he hasn’t seen a country like Pakistan despite travelling far and wide. “Pakistan has everything – it has all the blessings the world to offer; all four seasons, rivers, sea, desert, forests and most of all, immensely talented human resource”, he ends the conversation on a positive note showing his hope for not just Bestway Services but for all businesses in Pakistan and the country as a whole.