Udhaar App

We are a simple book-keeping app, to help 30M micro SMEs run their finances digitally.

I was visiting Pakistan. 1-day, asked our local store owner on plans for his next location. His response, 'never'.

Since business operations & money flow are manual, he worked 16 hours / 7 days to minimize theft. Zero time with family. We got obsessed with identifying how we can help small business owners run their business and have a life.

Everything in Pakistan is manual, store credit, sales, purchasing inventory, cash management, tax filings, payments, etc.

This idea got us hooked as it allows us to build a large company and have a huge impact on ~30M small businesses in Pakistan that contribute 74% of the overall GDP.

Explosion in 4G adoption (91M 4G subscribers, 720% growth in 5 years), is helping drive product market fit:

i. >1M downloads

ii. 4.6 star rating on Playstore & Appstore

iii. MAUs & GTV: get in touch :)

High-Level Overview

Udhaar App is a digital bookkeeping and business management platform designed specifically for Pakistan’s micro and small enterprises (SMEs), serving over 5 million businesses. It functions as a comprehensive digital khatabook (credit ledger), cashbook, invoice maker, payroll manager, and inventory tracker, enabling business owners to digitize manual financial processes such as credit tracking, sales, expenses, and payments. By automating these traditionally paper-based operations, Udhaar helps shopkeepers, traders, and small service providers reduce errors, save time, and improve financial transparency, ultimately supporting business growth without requiring upfront investment[1][2][3][7].

The app targets Pakistan’s vast informal economy, where approximately 30 million micro SMEs contribute around 74% of GDP but largely operate with manual bookkeeping. Udhaar’s product addresses the core pain points of these businesses by simplifying financial management and operational workflows, thus empowering owners to focus on growth and family life. The platform has gained significant traction due to its ease of use, free SMS reminders for credit recovery, GST-compliant invoicing, and integrated payroll and inventory management features[1][2][4][5][7].

Origin Story

Udhaar App was founded in 2020 in Karachi, Pakistan, and joined Y Combinator’s Winter 2021 batch. The founding team was inspired by firsthand observations of local store owners working excessively long hours due to manual business operations and financial management. The founders identified a massive opportunity to digitize the financial workflows of Pakistan’s 30 million micro SMEs, which had been underserved by existing fintech solutions. This insight led to the creation of a simple, accessible bookkeeping app tailored to the unique needs of Pakistani small businesses, aiming to reduce theft, errors, and time spent on administrative tasks[7].

Early traction came from the app’s ability to replace traditional paper khatabooks with a digital ledger that sends free payment reminders and generates reports, which resonated strongly with local merchants. The app’s growth was fueled by word-of-mouth and the urgent need for digital tools in a largely cash-based economy[1][2][7].

Core Differentiators

• Localized Product Design: Tailored specifically for Pakistan’s micro and small businesses, supporting Urdu and English languages and GST-compliant invoicing.
• Comprehensive Financial Management: Combines khatabook (credit ledger), cashbook, payroll, invoice maker, and inventory management in one app.
• Ease of Use and Accessibility: Mobile-optimized with a simple interface, free SMS reminders for credit recovery, and automatic backup to prevent data loss.
• No Upfront Investment Required: Enables businesses to grow income and manage operations without initial capital outlay.
• Strong User Base: Trusted by over 5 million businesses, reflecting deep market penetration.
• Integration of Payments: Supports instant IBFT and wallet payments, facilitating faster transactions and cash flow management[1][2][3][4][5].

Role in the Broader Tech Landscape

Udhaar App rides the wave of digital transformation in emerging markets, particularly the digitization of informal economies. Pakistan’s large population of micro SMEs has historically relied on manual bookkeeping, which limits efficiency and growth. The timing is critical as smartphone penetration and digital payment infrastructure improve, creating fertile ground for fintech solutions like Udhaar. The app addresses a fundamental market gap by providing affordable, easy-to-use tools that formalize financial record-keeping and improve transparency.

By enabling millions of small businesses to digitize their operations, Udhaar contributes to financial inclusion, reduces cash leakage, and supports the formalization of Pakistan’s economy. This, in turn, can enhance credit access and tax compliance, influencing the broader ecosystem positively. Udhaar’s success also encourages other startups to innovate in the SME fintech space, accelerating Pakistan’s digital economy[2][7].

Quick Take & Future Outlook

Looking ahead, Udhaar App is well-positioned to deepen its penetration among Pakistan’s micro SMEs by expanding features such as credit scoring, lending partnerships, and enhanced payment integrations. Trends like increasing smartphone adoption, government digitization initiatives, and growing fintech awareness will shape its trajectory. The company’s influence may evolve from a bookkeeping tool to a full-fledged SME financial platform, potentially integrating with banks and other financial services to offer credit and insurance products.

As Udhaar scales, it could play a pivotal role in transforming Pakistan’s informal economy into a more transparent, efficient, and creditworthy sector, thereby driving broader economic growth. Its mission to help small business owners reclaim time and reduce financial stress aligns with global trends toward SME empowerment through technology[7][1][2].