Microfinance Raising Financial Inclusion in Pakistan

Pakistan ranks first in Asia and third in the world in Economist Intelligence Unit's overall microfinance business environment rankings for 2011. Among other Asian nations, only the Philippines at #6 made the top ten list.



On a scale of 0-100, Pakistan scores 62.8, just behind top-ranked Peru's 67.8 and second-ranked Bolivia's 64.7 in overall global rankings of 55 countries. Among nations in South Asia region, India ranks 27 with a score of 43.1 and Bangladesh ranks 43 with a score of 30.9. Sri Lanka is at #48 with a score of 27.4 followed by Nepal at 51 scoring 26.1.

Among various categories, Pakistan ranks #1 in regulatory framework and practices and #5 in supporting institutional framework.

Here's an excerpt on Asia from the EIU report titled "Global microscope on the microfinance business environment":

"Pakistan and the Philippines again top the regional rankings for East and South Asia. These countries both finished in the top ten globally, signifying strong environments for microfinance. Indeed, Pakistan and the Philippines came first and second globally, respectively, in the Regulatory Framework and Practices category, suggesting strong regulatory regimes and good prospects for MFIs to enter the sector and perform effectively. The Philippines, for example, has had a strong enabling environment for microfinance for more than a decade. Cambodia is third best in Asia and makes it into the top 25% globally. India comes next, but fell precipitously after the crisis that struck the sector last year. Mongolia finished fourth in Asia, but was the region’s most-improved performer."

Recently, Pakistan's central bank governor Haris Anwar said that large segments the nation's population have no bank accounts and many do not understand why it puts them at a disadvantage when it comes to their personal financial management. According to Pakistan Access to Finance Survey (A2FS), only 12 percent of the population has access to formal financial services. Of the remaining 88 percent, only 32 percent are informally served and 56 percent are completely excluded, Anwar said, adding that according to the A2FS analysis, about 40 percent of the financially excluded population reported lack of understanding of financial products as the main reason for financial exclusion.

It has long been recognized by poverty alleviation experts that pursuing policies for increasing financial inclusion, such as encouraging microfinance, are absolutely essential to lift tens of millions of people out of poverty in Pakistan, where 50% of the workforce is made up of low-end self-employed. Other efforts toward bringing financial services to the poor and lower middle class in Pakistan include financial literacy initiatives and growth of branchless mobile banking in city slums and rural areas of the country.

Pakistan’s first-ever National Financial Literacy Program was launched earlier this year with the support and collaboration of Asian Development Bank (ADB), Pakistan Banks’ Association (PBA), Pakistan Microfinance Network (PMN), Pakistan Poverty Alleviation Fund (PPAF) and BearingPoint consultants.

The growth of branchless banking in Pakistan is now being held up a success story at international fora. Within a span of just two years, there are now almost 18,000 branchless banking outlets surpassing the 10,000 conventional bank branches, according to Governor Anwar. UBL Omni’s branchless banking service launched in April 2010 by United Bank has won several contracts to disburse payments for nongovernment organizations and government schemes to help those affected by floods. UBL reports that at the end of June it had 5,000 agents disbursing payments to 2 million recipients under these programs. UBL Omni has also started accepting loan repayments for microfinance institutions (MFIs) and providing cash management facilities for businesses.

According to a recent World Bank report titled "More and Better Jobs in South Asia" which shows that 63% of Pakistan's workforce is self-employed, including 13% high-end self-employed. Salaried and daily wage earners make up only 37% of the workforce. Access to money is necessary for many of these entrepreneurs to succeed in realizing their dreams.



The history of microfinance in Pakistan started with the launch of Orangi Pilot Project (OPP) in Kutchi Abadies (shanty towns) of Karachi in early 1980’s, according to a paper published by Abdul Qayyum and Munir Ahmed. In the late 1960s, prior to OPP, a few NGOs in the rural areas of Pakistan began to experiment with microcredit by offering subsidized loans. However, they mostly failed to reach the poor due to abuse and corruption. Now there are dozens of Micro Finance Institutions working in Pakistan. The MFIs in Pakistan can be divided into different groups based on their uniqueness that separates them from other financial institutions and makes them similar in terms of the way they function.

The first group consists of financial institutions with microfinance as a separate product line. The share of microfinance related activities of these institutions is up to 10 percent. This group includes Orix Leasing and the Bank of Khyber –both are profit making organizations and consider microfinance as a separate product line.

The second group refers to the specialized MFI’s, which includes two microfinance banks - The Khushhali Bank and First Microfinance Bank Limited (FMBL) - and two NGOs - KASHF Foundation and Asasah. All these institutions completely focus on provision of financial services and also have commercial focus as well.

Third category MFIs related to activities of the Rural Support Programs which deals with integrated Rural Development Programs with microfinance as one of its activities. These organizations are National Rural Support Programs (NRSP), Punjab Rural Support Programs (PRSP) and Sarhad Rural Support Programs (SRSP). The last group consists of private NGOs. These NGOs are basically integrated development organizations with microfinance as one of their activities. These include Orangi Pilot Project, Sungi Foundation, Taraqee Foundation, Development Action for Mobilization and Emancipation (TRDP), Sindh Agricultural & Forestry Workers Coordinating Organization (SAFWCO) and Development Action for Mobilization and Emancipation (DAMEN), among others.

Khushhali Bank was established in August 2000 as part of the Government of the Islamic Republic of Pakistan's Poverty Reduction Strategy. The Pakistan Microfinance Sector Development Program (MSDP) was developed with the technical assistance and funding of the Asian Development Bank, which provided a US$150 million loan to the government of Pakistan, US$70 million being used for micro-loans provided by KB. Headquartered in Islamabad, KB operates under the central bank's supervision (State Bank of Pakistan) with several commercial banks operating as its primary shareholders.

To broaden access, there are now efforts underway to offer Shariah-compliant microfinance products to those who are reluctant to participate in interest-based banking. Farz Foundation is among the first to do so. It is engaged in Islamic micro-financing for livestock and agriculture among the rural poor.

Pakistan has a long way to go to achieve financial inclusion for the majority of its population. The current efforts on increasing access to money for the poor are a good start on a long journey that may take decades to complete. My readers who are interested in helping the poor in Pakistan by offering small loans of $25 or more have a choice of many websites to do so, including kiva.org which I have been using. The loans to Pakistani recipients are administered through Asasah, a Kiva partner in the country.


Related Link:

Haq's Musings

Pakistan's Financial Services Sector

Fighting Poverty Through Microfinance

IBA on Entrepreneurship in Pakistan

Floods Dampen Enthusiasm on Pakistan Independence Day

Comments

Riaz Haq said…
Here's Express Tribune on a book launch to increase financial literacy in Pakistan:

Blame it on either the absence of institutional support or a lack of eagerness on the part of the academia, the reality remains that business students in Pakistan had so far no textbook on banking and finance that described the complex relationship between the financial system and economic development in Pakistani context.

It was this academic vacuum that made Dr Shakil Faruqi write a two-volume book titled “Financial System and Economic Development – Pakistan,” which was launched at the Institute of Business Administration (IBA) on Monday in a ceremony chaired by IBA Dean and Director Dr Ishrat Husain and attended by IBA faculty members, students, economists and many former and current State Bank officials.

Formerly associated with the World Bank, Dr Faruqi has a PhD in economics from the University of Pennsylvania. He now teaches at the Lahore School of Economics (LSE), which is also the publisher of the two-part book.

Speaking on the occasion, former head of World Bank’s Learning Centre Tariq Hussain termed the book unique because it explained the theory of banking and finance by linking it to its actual application in the economy of Pakistan.

He said the chapters on Islamic finance discussed the issue in a purely academic manner. “It says what Islamic finance is and what it’s not. Also, it does this in an academic, rather than argumentative, way.”

Addressing the ceremony, Dr Faruqi said his students knew about the US Federal Reserve more than they knew about the State Bank of Pakistan (SBP) because the textbooks they used were by American authors. Saying that his students often complained finance was a dry subject, Dr Faruqi stated, jokingly, that his task was to make it as interesting as a Bollywood movie.

The first volume of the book has chapters on the financial system, interest rate, financial savings, credit system, Islamic banking, monetary management, etc. The second volume has chapters on the financial market, securities market, assets, yields, returns, trading in derivatives, capital market, long-term debt market, stock market, portfolio financing, etc.

The first and second volumes of the book cost Rs1,900 and Rs1,600, respectively.


http://tribune.com.pk/story/339368/vacuum-filled-textbook-on-banking-and-finance-launched/
Riaz Haq said…
Pakistan central bank to boost lending to stimulate economy, reports Bloomberg:

Pakistan’s central bank aims to spur lending to small companies, farming and housing in the next three years to boost growth in an economy where government borrowing has curbed credit and kept interest rates elevated.

“These three areas have to be stimulated and will become engines of growth,” Governor Yaseen Anwar, 60, said in an interview at the State Bank of Pakistan in Karachi on March 2. He forecast the economy will expand by 3 percent to 4 percent in the year ending June.

Anwar has kept the benchmark rate at 12 percent since he was officially made governor in October, refraining from adding to two reductions in 2011 as the nation grapples with the fastest inflation in Asia after Vietnam. He said government borrowing is impeding credit, as insufficient tax collections force Prime Minister Yousuf Raza Gilani’s administration to turn to central bank funding to finance flood rehabilitation and a war against militants in the northwest.

“The State Bank cannot do much in isolation without the government taking some very basic corrective measures,” said Nasim Beg, executive vice chairman of Arif Habib Investments Ltd. in Karachi, which oversees 35 billion rupees ($385 million) in stocks and bonds. “The government will be likely to go for aggressive populist spending early in this election year and worry about meeting revenue targets later -- more pressures for the governor.”
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Anwar, who worked at Merrill Lynch & Co. and Bank of America Corp. in his 33-year career before joining the State Bank, cited the government’s commitment to “zero borrowings” from the central bank as one of the reasons for reducing rates in July.

“We need attention on the revenue side in terms of tax reform,” Anwar said, adding he thinks the government may meet its collection target of 1.95 trillion rupees in the year ending June 30. The ratio of tax to gross domestic product, which the finance ministry estimates is 9 percent, “has to go up into the teens,” he said.

Only one in 10 Pakistanis pay taxes, limiting the government’s ability to fund a budget deficit that the International Monetary Fund estimates may widen to as much as 7 percent of gross domestic product this year.-----------


http://www.bloomberg.com/news/2012-03-04/pakistan-s-anwar-plans-lending-boost-to-bolster-economic-growth.html
Riaz Haq said…
Here's an excerpt from Express Tribune on rapid growth of mobile banking in Pakistan:

Sharing statistics of SBP, Anwar said value of branchless banking transactions reached Rs79,410 million during the last quarter. Total number of branchless banking accounts have increased to 929,184, he said, while branchless banking deposits have grown to Rs503 million.

SBP introduced branchless banking regulations in 2008. He further said around 80 million branchless banking transactions of Rs300 billion have been executed in Pakistan. “I am expecting a surge in the number of access points to over 50,000 very soon,” he said. Total volume (number) of transactions has jumped to 20.6 million during the October to December 2011, Anwar said. The average number daily transactions has increased to 228,855, he added.

The average size of branchless banking transactions, Anwar said, is Rs3,855 which shows that mobile phone technology and agent-based banking are providing financial services to unbanked poor.

While talking about the benefits of branchless banking, he said, rural customers will no longer be required to travel long distances. He further said a large proportion of population – which is unbanked – has been heavily reliant on cash-based transactions, thus causing a negative impact on documentation of the economy, the tax-base, efficiency of economic transactions, etc.

Representatives of the world’s leading software providers gave detailed presentations and discussed case studies on how mobile banking has succeeded in other emerging as well as developed markets.

Mobile banking is the only way forward, said Mathew Talbot, Senior Vice President, Mobile Commerce Sybase 365 – which was recently acquired by SAP. Pakistan is one of the fastest developing markets for branchless banking in the world, he said, which is why Sybase is here.

Sybase provides technologies to banks, which enable the latter to have full control of their bank accounts and make transactions through mobile device regardless of their location. It creates opportunities for bringing the unbanked and under-banked segments of the society into the financial network.


http://tribune.com.pk/story/350701/pakistan-rated-among-fastest-growing-markets-in-mobile-banking/
Riaz Haq said…
Here's an except of a microinsurance report on Pakistan:

Pakistan still needs a sustained effort to raise awareness amongst its people with regard to the benefit of insurance, followed by the delivery of insurance products to the poor. There is also great scope in Pakistan to diversify microinsurance products, for example, crop insurance. Indeed, there is a dire need of agriculture microinsurance: in case of natural calamities farmers have to bear the loss of their crop and face default on credit. The need to cover risk and investments of marginalised farmers is of paramount importance.
Existing microinsurance providers in Pakistan : (alphabetical order)


• AKDN Aga Khan Development Network
• BRSP Balochistan Rural Support Programme
• Development Action for Mobilization and Emancipation (DAMEN)
• Kashf Foundation
• NRSP National Rural Support Programme
• PRSP Punjab Rural Support Programme
• Sindh Agriculture and Forestry Workers Coordinating Organization (SAFWCO)
• SRSO Sindh Rural Support Organization
• SRSP Sarhad Rural Support Programme (SRSP)
• SUNGI Development Foundation
• TRDP Thardeep Rural Development Programme
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In Pakistan, serious efforts for microinsurance at the national level only picked up in the last decade with the advent of Microfinance institutions (MFIs) and a mushrooming growth of NGOs. However, there is still scope for extensive growth in this area. The Government has been doing its part by providing support to the RSPs through the creation of SMEDA (Small and Medium Enterprises Development Authority) and recently by the State Bank of Pakistan’s directive to all banks to have at least 20% of their branches in the rural areas. This will open up new avenues to infiltrate financing into crops, livestock and other basic requirements.

The government is also currently working on microfinance policy. It is involved in many social protection programmes, one of which is Benazir Income Support Programme (a cash grant programme being implemented nationwide and aiming to cover 3.5 million women during its first round).

The Planning Commission is also committed to organising roundtables workshops for gathering the viewpoints and perspectives of various experts and professionals for the development of the microinsurance policy.

Besides, the Asian development Bank (ADB) is also playing an important role in Pakistan in the microinsurance sector. From 2001-2008, the ADB had a $150 million Microfinance Sector Development Programme which included $80 million for on-lending, $40 million for social development and $20 million for community infrastructure. A more recent programme from 2006-2008 has been improving access to financial services of which one is microinsurance. A $20 million grant has been given to the Government by the ADB which will be administered through the State Bank of Pakistan over the next 2 decades.

The RSPN-Adamjee Health Microinsurance Model

The Rural Support Programmes Network (RSPN) was registered in 2001 under Pakistan’s Companies Ordinance (1984) as a non-profit company by the Rural Support Programmes (RSPs) of Pakistan. RSPN is a network of ten RSPs. The RSPs involve poor communities, mainly but not exclusively rural, in improved management and delivery of basic services through a process of social mobilization. RSPN is a strategic platform for the RSPs, providing them with capacity building support and assisting them in policy advocacy and donor linkages.
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The Adamjee-RSPN partnership started in 2005 – the very first health microinsurance scheme in Pakistan, providing hospitalisation and accident insurance to low-income rural population across the country who have organised themselves into community organisations (COs) fostered by the RSPs.


http://www.socialsecurityextension.org/gimi/gess/ShowWiki.do?wid=752
Riaz Haq said…
Telenor to offer agri info to farers via its wireless telephone network, reports newstribe:

Telenor Pakistan, in partnership with the Government of Khyber-Pakhtunkhwa, will provide agriculture and livestock information to farmers in the province.

In addition, farmers will be offered the Easypaisa platform to trade in agricultural commodities. Information will be provided via push SMS, voice recordings and small community gatherings.

The aim is to benefit farmers — especially small farmers — by providing them relevant and timely information, and the ability to carry out related mobile transactions on their handsets. All information will be provided by the Government of Khyber-Pakhtunkhawa while Telenor Pakistan will act as the distribution channel of the information. A pilot project will initially be run in Mardan district.

To mark the occasion an MoU signing ceremony was arranged at a local hotel. Arbab Muhammad Ayub Jan, Minister for Agriculture, Khyber Pakhtunkhwa was the chief guest. The MoU was signed by Roar Bjaerum, Vice President Financial Services, Telenor Pakistan and Arbab Muhammad Ayub Jan, Minister for Agriculture, Khyber-Pakhtunkhwa.

Roar Bjaerum, in his comments, highlighted the benefits the project will bring to the farmers of the province. “We will provide farmers the information they need to grow better crops and to raise hardy livestock. By doing so, we want to help them make more informed decisions when it comes to agriculture and livestock planning and trading. This way we hope to contribute toward alleviating poverty and empowering farmers economically. We will also offer mobile branchless banking solutions to enable farmers to carry out transactions right on their mobile phones through Easypaisa.”

Ayub Jan in his remarks spoke about the partnership between Telenor Pakistan and the Government of Khyber Pakhtunkhwa’s Agriculture, Livestock and Cooperative Department (ALCD). He said: “The Department has the mandate of promoting the interests of agriculture and livestock farmers in the province of Khyber Pakhtunkhwa. It has undertaken various initiatives to modernize the sector, and to augment the dissemination of relevant information to farmers to help increase production. Our partnership with Telenor Pakistan is another step in this direction. We are ready to offer all the support it needs to achieve its goals for this project.”

Small farmers, living in far-flung areas, are usually isolated from market information which may help them in dealing with commodity whole sellers (‘beopari’ and ‘arthis). They also do not have immediate access to information about best practices in agriculture and livestock rearing.

Telenor Pakistan’s project will help farmers in getting the information they need to increase yield through access to best quality commodities, latest agri trends, information on judicious use of pesticides and fertilizers, best breed of livestock, new methods of disease control, and quality feed and fodder.


http://www.thenewstribe.com/2012/04/18/telenor-to-partner-with-kp-to-provide-agri-information-to-farmers/
Riaz Haq said…
Citibank Pakistan recognized for corporate responsibility, reports Pak Observer:

Islamabad—Citi Pakistan has been awarded the ‘Best Community Program’ Award for its pioneering work in microfinance and vocational training at the International CSR Awards 2012. This award comes on the heels of two global awards that Citi Pakistan received at the Global CSR Summit and at the Asian CSR Awards in 2011, for its corporate citizenship initiatives in Pakistan. The bank has been focusing its programs on microentrepreneurship for vulnerable groups, including helping female entrepreneurs set up businesses. This is evidenced through the Citi Microentrepreneurship Awards (CMA) program which has been run in association with the Pakistan Poverty Alleviation Fund (PPAF) for the past (8) years through an annual grant provided by the Citi Foundation.

Now in 28 countries, CMA promotes the effective role that individual microentrepeneurs have made to the economic sustainability of their families as well as their communities. This year also marks the completion of Citi’s flood relief efforts in Pakistan to provide reconstruction and rehabilitation for affectees of the 2010-11 disaster. ‘This award is a solid recognition of our commitment to responsible finance in the country, particularly through meaningful microfinance and income-generation programs,’ said Aliuddin Ahmed, Acting Citi Country Officer for Pakistan. ‘Our community projects in Pakistan aim to create sustainable small-scale businesses with clear and measurable objectives and good process tools attached to all our social responsibility initiatives.’

The bank has had a continuous presence in Pakistan over the last 50 years and remains fully committed to serving its corporate clients and retail customers in the country, as well as fulfilling its role as a responsible corporate citizen. As it marks its 200thanniversary this year, Citi is considered to be the world’s global bank and a key partner-in-progress by public sector entities, top corporations and MNCs that operate in Pakistan and elsewhere in the region.


http://pakobserver.net/detailnews.asp?id=153685
Riaz Haq said…
Here's a BR story on State Bank governor encouraging Pak banks to finance SMEs:

KARACHI: Governor, State Bank of Pakistan, Yaseen Anwar has stressed upon the banks to give top most priority to SME banking with a view to ensuring uninterrupted flow of financial access to SME sector in the country.

Speaking at the signing ceremony of the project document between the State Bank of Pakistan (SBP) and Bank Alfalah under the DFID-funded Financial Inclusion Programme (FIP) at SBP, here Monday, he said the role of banks, especially of mid-tier banks, is crucial to ensure unhindered flow of financial resources to the SME sector which is the engine of economic growth in Pakistan.

"Though many banks in the market are trying to improve their market position in order to serve the sector more effectively, the current level of SME finance as well as an overall level of SMEs access to banking services remain unsatisfactory, and as such call for more serious efforts on part of the banks", SBP Governor added.

Anwar said that SME financing is very close to his heart due to its key significant contribution in the economic development of Pakistan. "The SME sector plays an important role in employment generation, poverty alleviation, and equitable distribution of resources and is the engine of growth", he added.

He pointed out there are 3.2 million economic establishments, of which 99% are SMEs, and SME sector represents over 90% of all enterprises and employs 75% of the non-agricultural workforce and contributes 30% towards the national GDP.

"However, despite its strong contribution in employment generation, exports, and national income, the SME sector is severely constrained in access to finance which is crucial for its growth", he added.

SBP Governor advised the banks to study the international examples of successful SME banking models which include Retail-based Model for Mass SME, Relationship-based banking, Advisory-based lending services, Segment-based Model, and Supply-chain linked Model.

Regrettably, he said that despite its immense significance and potential, the SME sector in Pakistan remains largely financially excluded, the current level of financing facilities to this sector stand at Rs 253 billion, constituting only 7% of the banks' total advances.

Anwar said that with the SBP- Bank Alfalah and International Finance Corporation (IFC) nexus, and the generosity of DFID, we can have more joint ventures of this sort in the future that would lead to a sustainable, sound and integrated financial system, characterised with ready access to finance, diversified loan portfolio and extended outreach to SMEs.

He said the State Bank, under the DFID-funded "Financial Inclusion Programme (FIP) will provide funding support to Bank Alfalah (BAF) in undertaking the IFC SME Advisory Project. "The main objective of the project is to create a symbolic podium which can position Bank Alafalah to cater to the financing needs of the SME sector including the S and M segments through a holistic banking and advisory services solution", he added.

SBP Governor said the SMEs need to be addressed through innovative credit assessment tools and techniques like credit scoring and capacity enhancement of the financial service providers, and an integrated approach to SME Banking. DFID and SBP are keen to upscale FIP to reach out the unbanked segments in Pakistan. Going forward, FIP funds will also be targeted to improve financial inclusion through SMEs banking, Anwar added....


http://www.brecorder.com/pakistan/banking-a-finance/61658-sbp-governor-asks-banks-to-give-top-priority-to-sme-banking-.html
Riaz Haq said…
Here's Pak Observer report on branchless banking growth in Pakistan:

Karachi—Branchless Banking is helping in reaching out to the low income, unbanked people through more than 30,000 access points throughout the country. Nearly 30 million transactions worth Rs.115 billion have been processed during the fourth quarter of the last fiscal year through branchless banking and the average daily transactions have been reported at 315,178 while the total number of branchless banking accounts has increased to 1.7 million. According to the World Bank’s Consultative Group to Assist the Poor (CGAP), Pakistan is the fastest growing branchless banking market in the world.

Addressing the journalists Deputy Governor, State Bank of Pakistan (SBP),Kazi Abdul Muktadi during his visit to Karachi Press Club today.

Expressing his resolve to provide banking services to all segments of the society, he said that with the concerted efforts of all, we will be able to achieve the desired goal of ‘Banking for All’.

Emphasizing the need for an efficient and thriving banking system, he said that the State Bank is providing regulatory environment to financial institutions to enhance financial inclusion in the country. ‘Providing people with access to finance is a challenging task, not just for the central bank but also for all the stakeholders,’ he observed.

State Bank of Pakistan is trying to make the banking services available at the door step of the people, he said and added that promoting access to banking services is the corner stone of SBP’s policy framework. He said the State Bank under its Branch Licencing Policy has made it compulsory for banks to open at least 20% of their new branches in rural and under-served areas.

Abdul Muktadir said the banking industry of Pakistan has tremendous growth potential to deliver lot more than what it is delivering right now. ‘The significance of e-banking and m-commerce cannot be overemphasized because of the fact that both have brought about remarkable changes in the ways people think and do their banking business today,’ he added.

The transformation from traditional to modern ways of banking is taking place at a fast pace. A number of alternate delivery channels for provision of banking services like ATMs, Credit Cards, POS terminals, Internet Banking, Debit Cards already exist in our country to benefit the masses. ‘Currently, 93% of the total bank branches are offering Real-Time Online services,’ he added.

Abdul Muktadir said the SBP would ensure that the high level of banking service standards is maintained for the safety, security and cost effectiveness with adequate levels of protection for consumers’ interests.

The SBP Deputy Governor, who also inaugurated an ATM at Karachi Press Club, pointed out that the availability of ATMs in Pakistan is quite low as there are only 5600 ATMs in the country. At present, there are about one ATM against two bank branches while in developed countries, there are three ATMs against one bank branch. SBP has recently issued policy instructions to all banks which bind them to expand their ATM network in a phased manner so as to achieve a target level of one ATM for each bank branch. ‘Once this target is achieved, we have plans to gradually raise the bar so as to meet the international levels.


http://pakobserver.net/detailnews.asp?id=177418
Riaz Haq said…
Here's a Wall Street Journal piece on health care in Pakistan:

Given the absence of comprehensive public health-care services, a largely unregulated private sector, with hugely disparate services and prices, has sprung up to fill the void. But currently only 0.8% of Pakistan's GDP is allocated to insurance products, including health insurance, according to the country's insurance regulator. Poor patients often end up taking out loans and falling into debt to pay for private-sector services.

To address such needs, Asher Hasan set up Naya Jeevan—"new life" in Urdu—a nonprofit micro-insurance program for the urban poor.

"Everyone should have access to quality health care irrespective of their level of income," said Dr. Hasan, who grew up between Karachi and the U.K. and then moved to the U.S. to study medicine.

Naya Jeevan, one of 12 finalists in The Wall Street Journal's Asian Innovation Awards, offers an insurance program at subsidized rates under a national group health-insurance model. It tied up with large multinational corporations and local companies to offer subsidized health-insurance plans for their low-income and contractual employees as well as the employees' domestic helpers, who are often poor.

Dr. Hasan's sales pitch to these companies was that health is a right and this is a way for the companies to help their low-income employees. For their domestic staff his pitch was: If a maid or a baby sitter of an executive fell ill, it would disrupt that executive's productivity in the office for as long as it took for the problem to be resolved.

But the program is under scrutiny from the country's insurance regulator, which comes under the jurisdiction of the Securities and Exchange Commission of Pakistan.

Mohammed Asif Arif, the insurance division commissioner at the SECP, said that Naya Jeevan is in violation of the country's insurance laws because it isn't registered as a broker and can't legally offer these products. The regulator issued a notice in September to insurance companies reminding them that it is illegal to sell insurance to unregistered entities. (Naya Jeevan buys insurance in bulk at discounted rates from several insurance companies.)

Mr. Asif Arif said his agency would allow Naya Jeevan time to comply with the rules, without offering a specific deadline.
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Dr. Hasan started Naya Jeevan with $75,000 that he won in 2008 in a New York University Social Entrepreneurship competition. Since then he has received funding from the International Labor Organization, USAID, the Asia Foundation, Google/Tides Foundation and J.P. Morgan Chase JPM +0.36% .

Naya Jeevan has locked in subsidized rates with a handful of Pakistani insurance companies. Under the agreements, it costs a company $1.50 a month per employee to enroll its lower-income employees and home helpers such as janitors, drivers and maids. Of this amount, at least 80% is typically covered by the company and the rest by the employee who is being covered. These employees also can enroll their families in the insurance program, at an additional monthly cost to them of up to $1.50 a person.

If a claim exceeds the amount of an individual policy, the balance of the cost is paid for by the individual's corporate employer. Naya Jeevan says 17,000 people are enrolled in its program.
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"One of the issues in society is that when you send in a low-income person to a gleaming fancy hospital, they may not get treated properly," even though their treatment is covered by the insurance program, Dr. Hasan said. To prevent that, Naya Jeevan works with doctors who can liaise with hospitals on behalf of their patients.


http://online.wsj.com/article/SB10001424052970204846304578090713421035962.html
Riaz Haq said…
Here's ET on increasing e-banking in Pakistan:

The overall value and volume of e-banking transactions throughout the country increased during the second quarter (October to December 2012) to Rs 7.6 trillion (18.02 per cent)and Rs 79.45 (11.31 per cent) million respectively, the State Bank of Pakistan reported on Wednesday.

State Bank of Pakistan’s Payment Systems report for the second quarter of FY13 released today revealed that the branches of 484 banks in Pakistan were added to the Real-Time Online Branches (RTOB) network during the second quarter of the current fiscal year (FY13) and now 94 percent branches are offering online banking services.

Calculating the overall internet banking services across the country, overall 9,896 branches of banks out of 10,523 are offering the service. During the second quarter, the overall value and volume of internet banking transactions had seen an increase in of 18.82 percent and 14.29 percent in the overall value and volume of internet banking from the first quarter of 2012, respectively.

The Payment Systems infrastructure in the country had also seen an increase because of the installation of 245 new Automated Teller Machines at banks around the country. Today, the number of ATMs across Pakistan has reached a total of 6,232. The report further said that ATM transactions had a major share of 61.12 percent in terms of transaction volume with an average value of Rs9,779 per transaction.

The overall e-banking transactions in value terms was 6.27 percent during the second quarter, increasing the value and volume of ATM transactions by 10.33 percent and 10.68 percent respectively in the second quarter as compared to the first quarter of the current fiscal year.

The report also said that over 20.72 million banking cards were issued in the country by the end of December, 2012, witnessing an increase of 5.33 percent in the second quarter compared to the preceding quarter.

Point of Sale (POS) terminals showed a growth of 6.25 per cent and 5.06 per cent in value and volume respectively as compared to the first quarter of the current fiscal year, with value and volume of transactions standing at Rs22.1 billion and Rs4.5 million, respectively, in the second quarter.

The report also pointed out an increase of large-value payments through Real Time Gross Settlement (RTGS) with 9.46 percent in value and 10.35 percent in volume as compared to the first quarter. The recorded value and volume was Rs42.13 trillion and Rs12.16 billion respectively in the second quarter.

The report also revealed that major portion for the increased number of overall Pakistan Real Time Interbank Settlement Mechanism (PRISM) transactions increased 14.06 percent during the same period, which was contributed by Interbank Funds Transfers (IBFT). Similarly, the value of overall PRISM transactions increased by 14.96 percent due to securities settlement.


http://tribune.com.pk/story/506723/e-banking-transactions-cross-rs7-trillion-state-bank/
Riaz Haq said…
Pakistan ranks 8th in the world of Islamic Finance, according to a Guardian story. Here's an excerpt:

How it works

Islamic finance is all about sharing risk between financial institutions and the individuals that use them. To do that, the two parties are tied into a longer-term relationship with each other that is supposed to shift incentives and avoid cut and run financial deals.

So, for example, sharia-compliant mortgages mean that the bank and the borrower share the risks of repayment rather than charging any form of interest. Similarly, Islamic bonds like the one announced by David Cameron today involve both parties owning the debt, rather than a simple promise to repay a loan.

Since it's Islamic, that also means that financial trading is off-limits for things that are forbidden even if no interest is charged - so investments can't be made in alcohol, tobacco, non-halal meat products such as pork, pornography or gambling companies.

You don't have to be Muslim to use Islamic financial services - a fact which has stimulated further interest in the sector. The Islamic Bank of Britain reported a 55% increase in applications for its savings accounts by non-Muslims last year after the Barclays rate-fixing scandal.

In numbers

275: The number of Islamic financial institutions in the world.
75: The number of countries where they have a presence.
US$1.357 trillion: The value of the global Islamic finance services industry by the end of 2011.
US$4 trillion: The projected value of the global Islamic finance services industry by 2020.
£200m: The value of the planned Islamic bond being unveiled by David Cameron today.
11th: The ranking of the UK (up 4 places from 2011) in the Global Islamic Finance Report which weighs up variables like the number of institutions involved in Islamic finance industry, the size of Islamic financial assets and the regulatory and legal infrastructure.

Glossary

bay 'al-mu'ajjal: Instant sale of an asset in return for a payment of money (made in full or by instalments) at a future date
gharar: Describes a risky or hazardous sale, where the details of the sale contract are unknown or uncertain
ijarah: Leasing contract
istisna': Refers to an agreement to sell a non-existent asset, which is to be manufactured or built according to the buyer's specifications and is to be delivered on a specified future date at a predetermined selling price.
mudarabah: Profit and loss-sharing
musharakah: Joint partnership
qard hasan: Interest-free financing
riba' : Usury
sharikat al-'aqd: Contractual partnership
sharika al-milk: Proprietary partnership
sukuk: Islamic bonds
tahawwut: Hedging
takaful: Islamic insurance
wadiah: Safe custody
wakala: Investor entrusts an agent to act on his behalf
zanniyyat: probabilistic evidence


http://www.theguardian.com/news/datablog/2013/oct/29/islamic-finance-for-beginners
Riaz Haq said…
Not long ago, we put out a podcast that asked the question “Would a big bucket of cash really change your life?” That episode looked at whether winning a land lottery in antebellum Georgia significantly altered a given family’s financial future. University of Chicago economist Hoyt Bleakley, who studied that 1832 lottery, told us this:
BLEAKLEY: We see a really huge change in the wealth of the individuals, but we don’t see any difference in human capital. We don’t see that the children are going to school more. If your father won the lottery or lost the lottery the school attendance rates are pretty much the same, the literacy rates are pretty much the same. As we follow those sons into adulthood, their wealth looks the same in a statistical sense. Whether their father won the lottery, lost the lottery, their occupation looks the same. The grandchildren aren’t going to school more, the grandchildren aren’t more literate.

http://freakonomics.com/2013/11/27/fighting-poverty-with-actual-evidence-a-new-freakonomics-radio-podcast/


Now enough of these (cash to the poor) programs are up and running to make a first assessment. Early results are encouraging: giving money away pulls people out of poverty, with or without conditions. Recipients of unconditional cash do not blow it on booze and brothels, as some feared. Households can absorb a surprising amount of cash and put it to good use. But conditional cash transfers still seem to work better when the poor face an array of problems beyond just a shortage of capital.

When Give Directly’s founder, Michael Faye, went to traditional aid donors with his free-money idea, he remembers, “They thought I was smoking crack.” Silicon Valley, though, liked the proposal—perhaps because Give Directly is a bit like a technology start-up challenging traditional ways of doing things (in this case, aid). Google contributed $2.4m; Facebook, $600,000

http://www.economist.com/news/international/21588385-giving-money-directly-poor-people-works-surprisingly-well-it-cannot-deal
Riaz Haq said…
A soft revolution of mobile money in Pakistan: A pathway to financial inclusion

Over the past decade, there has been a rapid expansion of mobile money (m-money) networks in developing countries. These are largely intended to help financial services reach unbanked populations. This innovation has been taken up by cellular mobile companies in Pakistan, in partnership with domestic financial institutions, and thus creating some innovative business models for the use of m-money. While these innovations are a positive step forward for greater financial inclusion in Pakistan, a national strategy is essential to facilitate targeted and coordinated efforts between regulators and the private sector.



The challenge of high financial exclusion

Despite comprehensive financial sector reforms in Pakistan, progress on financial inclusion has been slow. In 2011, only 10% of Pakistan’s adult population had accounts at formal financial institutions (Figure 1). In comparison, 68.5% of the adult population in Sri Lanka had bank accounts, whereas this figure is 39.6% in Bangladesh and 35.2% in India.

Pakistan’s m-money infrastructure has expanded rapidly since the launch of the first domestic initiative in October 2009. This expansion has been promoted by a liberal financial and telecommunications regulatory framework, and active private sector participation. Four out of five cellular mobile companies currently operating in Pakistan have launched m-money systems in partnership with financial institutions. The m-money market volume has reached 153 million annual transactions worth US$ 6.2 billion.

There are two ways through which m-money services are provided in Pakistan. More than 95% of m-money transactions are carried out through mobile banking (m-banking) agents, and the rest are processed directly through customers’ mobile-wallet (m-wallet) accounts, using mobile phones. M-banking agents (retail points) provide the basic infrastructure for Pakistan’s m-money services, whereas customers’ m-wallet accounts currently have a limited role in the m-money services market.

In Pakistan, m-money services can improve access to financial services for the unbanked population, which is something which traditional banking channels have not managed to do. The network of 93,864 m-banking agents against only 10,250 commercial bank branches in the country provides a perspective as to the reach m-money has on the un-banked and poor.

The current high rate of dependence on agents to complete mobile transactions is typical in the initial adoption of m-banking. Moving forward, the importance of m-wallet accounts cannot be neglected. Many financial services including savings, insurance and micro-credit can be delivered through m-wallet accounts, which provide a store of value. As of June 2013, there were only 2.6 million m-wallet accounts, which is not large enough to reduce the high level of financial exclusion in Pakistan. Three new players that started operations in 2013 are relying solely on agent-based m-money services, while neglecting the potential of m-wallet accounts.

https://aric.adb.org/blog/57/a-soft-revolution-of-mobile-money-in-pakistan-a-pathway-to-financial-inclusion
Riaz Haq said…
#Pakistan to have 100 million bank accounts by 2025. #financialinclusion #banking

http://tribune.com.pk/story/999299/one-minute-bank-account-pakistan-to-have-100-million-bank-accounts-by-2025/ …


“Thanks to the concept of the one-minute bank account, the industry is opening close to a million accounts a month,” he said.

There were a total of 41.7 million bank accounts in Pakistan at the end of last fiscal year, according to the State Bank of Pakistan (SBP). More than 31.3 million accounts, or 75% of all bank accounts, belonged to the personal accounts category.

The SBP has recently modified the regulatory framework to quicken the bank account-opening process with the help of the national database authority.

“NADRA is the real-time online depository of the biometric impressions of close to 100 million people,” Hussain said, adding that utilising its database had so far resulted in eight million one-minute accounts.


The industry expects 50 million accounts by 2020 and 100 million accounts by 2025. Assuming the average balance of Rs1,000 in these accounts, Hussain said these accounts will bring as much as Rs100 billion back into the banking system.

It will also make access to credit possible for people and small businesses that are currently unable to borrow from commercial banks, he noted. “A bank account is the centre of gravity for financial inclusion,” he said.

Speaking on the occasion, Lucky Cement CEO Muhammad Ali Tabba said his group had plans to invest $1.8 billion in the next four years. “The economy and the security situation are on an improving trajectory. The feel-good factor is prevailing,” he said.

Urging people to “believe in Pakistan,” Tabba said the China-Pakistan Economic Corridor (CPEC) will be a game-changer for the economy. “I think $46 billion investment will materialise and transform Pakistan into a major economic hub.”

Addressing the audience, Planning and Development Minister Ahsan Iqbal said Pakistan has undergone a huge change since 2013. “The world now considers Pakistan an important player in the region, as Chinese investments would integrate Pakistan with Central Asian countries.”

The CPEC will bring development and prosperity in the country with investment of up to $5 billion in infrastructure and networks of roads and bridges, he said.
Riaz Haq said…
#Pakistan is upbeat on #Islamic branchless banking- http://www.khaleejtimes.com/business/banking-finance/pakistan-is-upbeat-on-islamic-banking …

Upbeat on shariah-compliant modes, Pakistan has just launched Islamic branchless banking claiming it to be "the first" - globally.

At the same time, State Bank of Pakistan (SBP), the central bank, just unveiled vast opportunities for foreign and domestic investors to come into the fold of all types of conventional and Islamic banking to invest and earn big dividends.

The first to take up the Branchless Islamic Banking (BIB) are Kuwait-based Meezan Bank and Ufone, a subsidiary of Pakistan Telecommunications Corporation (PTCL), partly owned by etisalat. The new ventures will carry the brand name of "Meezan-Upaisa," and it is the only Shariah-based branchless banking service.

The other cellphone-based branchless conventional banking in the country are Mobicash Waseela Bank operated by Mobilink, EasyPaisa-Tameer launched in cooperation with Norway-based Telenor, Ypaisa-U bank of Ufone and Timepey-Askari Bank.

While launching the new BIB customer service across Pakistan, SBP governor Ashraf Mahmood Wathra said this is the first product of its kind, not only in Pakistan, but in the whole world. "We have granted the permission to launch this unique service in order to facilitate 95 per cent of Pakistanis who will like to deal only with Islamic banking services, and have remained away from the current conventional banking services, because of their Islamic faith," Wathra said.

SBP, which recently conducted a survey 'Knowledge, attitude and practices of Islamic banking in Pakistan', said there is an overwhelming, and evenly distributed, demand in the urban and rural areas of the country for Islamic banking. The demand for Islamic banking is as high as 95 per cent among the households at the retail level. "Demand stands at 73 per cent among the businessmen," according to the SBP survey, which is based on 9,000 households nationwide and includes banked and non-banked customers, and 1,000 corporates. Meezan Bank and Ufone took a full year to develop the BIB model, which has now been launched.

Win-win situation

"With this new collaboration, we aim to capitalise on the strength of both the parties - Meezan Bank's strength in Islamic banking and Upaisa's geographic footprint in facilitating customers, making it a win-win situation for all. This is because Upaisa is at the forefront in providing branchless banking services, and its collaboration at various levels and Meezan Bank holding over 50 per cent of the Islamic banking share in Pakistan," Ufone President Abdul Aziz said.

Asher Yaqub Khan, chief commercial officer of Ufone, said Islamic branchless banking will accelerate the goal of financial inclusion of the economy to a great extent.

President and chief executive of Meezan Bank Irfan Siddiqui said his bank has played a vital role in expanding access to Islamic financial services in Pakistan. "This initiative is poised to accelerate financial inclusion by adding convenience and greater reliability, deepening the role of Ufone through enhancing the value it provides to its customers and that of Meezan Bank in expanding the reach of Islamic financial services to every citizen in the country."

The two partners - Meezan Bank and Ufone - hope that their partnership will expand Islamic system footprint to its maximum potential customers and facilitate them to avail branchless banking services with utmost ease and convenience under the Islamic system. This will be the fist milestone in the ambit of Islamic branchless banking.

"Our partnership will provide the service at 10,000 points of service across 500 cities, districts and villages. BIB will not only promote micro-financing but also finance for agriculture and small businessmen. It will also encourage savings by the general public, based on profit and loss model."
Riaz Haq said…
Pakistan ranked 5th in financial inclusion by the Economist magazine's Economic Intelligence Unit (EIU):

Peru (90 points) and Colombia (86) remained the top two countries for financial inclusion. The Philippines was followed by India (71) and Pakistan (64), while Chile and Tanzania (62) tied at sixth and Bolivia and Mexico (60) tied at eighth. Ghana (58) rose in the ranks to clinch the 10th place.

Finishing at the bottom of the rankings were Haiti, Congo, and Madagascar.

“One of the key takeaways from the 2015 Microscope is that there is very little policy slippage around financial inclusion; new policies are being adopted and existing ones further implemented,” the report said, though citing concern on “limited” progress among nations with average gains of only two points for the year.

As for the Philippines, the country has yet to make more progress on providing credit access on a sizeable chunk of unbanked residents, alongside putting forward technology-assisted schemes for the financial system.

“While the Philippines has been a leader in promoting and creating an enabling environment for financial inclusion, there is still much to be done, as only 26% of adult Filipinos have savings accounts and only 10.5% have access to formal credit,” the study read.

“Challenges remain in terms of scaling market innovations, particularly in technology-driven initiatives. There is also a chronic need for financial education and consumer-protection initiatives across regulated and non-regulated institutions.”


http://www.bworldonline.com/content.php?section=Economy&title=phl-still-among-microfinance-global-leaders&id=120100
Riaz Haq said…
#Pakistan’s rising #mobile wallet adoption. #financialinclusion #mobilemoney http://www.pakistantoday.com.pk/2016/09/18/business/pakistans-rising-mobile-wallet-adoption/ … via @epakistantoday

Mobile wallets (Such as Telenor EasyPaisa, Mobilink Jazz Cash etc) are often heralded as an innovative source of financial inclusion for the unbanked. And rightly so, mobile wallet accounts bypass the necessity of building and staffing a bank branch, and it also relieves its account holder from making the effort of going to a bank branch. Similarly, at least for Pakistan, its registration requirements makes it an easier option than a regular bank account.

Pakistan’s Financial Inclusion strategy for2015 recognises the importance of mobile money in expanding “digital transactional accounts”, which the strategy recognises as a key driver. In this regard, the recent upsurge in the number of mobile wallet registration should be encouraging. Just to put it in perspective; as perdata from the State Bank of Pakistan, at the end of Jul-Sept 2012, the number of wallet accounts was at approximately 1.8 million, however by Jul-Sept 2015 the same has risen to 13 million.

It is definitely a heartening increase especially when seen from a financial inclusion angle. But it is important to consider the demographics of these new wallet owners, are they predominantly from the banked segment or the unbanked one? A relevant source for answering these questions is the Financial Inclusion Insights (FII) survey 2015 for Pakistan. The FII 2015 is a nationally representative survey with a sample of 6000 individuals. Besides covering other aspects of Pakistan financial inclusion landscape, the FII also provides interesting insights into the probable demographic composition of Pakistan’s wallet accounts.

To begin with, the FII 2015 predicts that most wallet owners already had bank accounts, more specifically only44% of mobile wallet owners did not have bank accounts. When seen as a proportion of their base samples, wallet owners with bank accounts constituted 8% of bank account holders, however, unbanked[1] wallet owners were only 0.61% of the unbanked sample.

So who are these unbanked wallet owners? And how are they different from the unbanked who did not opt for a wallet account?In the following paragraphs will go over a few significant differences between unbanked mobile wallet owners, and the unbanked who do not have a wallet account.

Awareness about mobile money seems to be low among this group as 45% of unbanked with no wallet accounts were simply unaware about any of mobile money brands out there. It won’t be wrong to assume that almost half of the unbanked with no wallet account don’t even know about the existence of a mobile money option.

Gender differences were also apparent, as FII 2015 predicts 77% of unbanked wallet owners to be male, and only 22% to be female. This might be because of cultural constraints in Pakistan that discourage

Mobile wallets (Such as Telenor EasyPaisa, Mobilink Jazz Cash etc) are often heralded as an innovative source of financial inclusion for the unbanked. And rightly so, mobile wallet accounts bypass the necessity of building and staffing a bank branch, and it also relieves its account holder from making the effort of going to a bank branch. Similarly, at least for Pakistan, its registration requirements makes it an easier option than a regular bank account.

Pakistan’s Financial Inclusion strategy for2015 recognizes the importance of mobile money in expanding “digital transactional accounts”, which the strategy recognizes as a key driver. In this regard, the recent upsurge in the number of mobile wallet registration should be encouraging. Just to put it in perspective; as perdata from the State Bank of Pakistan,at the end of Jul-Sept 2012, the number of wallet accounts was at approximately 1.8 million, however by Jul-Sept 2015 the same has risen to 13 million.
Riaz Haq said…
#ITU to open first ever #fintech center in #Pakistan in collaboration with #American researchers at U of #Washington

https://www.techjuice.pk/itu-to-open-first-ever-fintech-center-in-pakistan-in-collaboration-with-a-us-research-group/

Information Technology University (ITU) and Digital Financial Services Research Group (DFSRG) University of Washington (Seattle, USA) have signed a Memorandum of Understanding (MoU) to establish a pioneering FinTech center in Pakistan.

The agreement was signed by Dr. Umar Saif, Vice Chancellor Information Technology University (ITU) along with Dr. Richard Anderson, Head DFSRG and Professor, Department of Computer Science and Engineering, University of Washington. The aim of the research center is to take Pakistan forward in financial technology space by adopting digital financial services countrywide.

Under the agreement, a collaborative research will be conducted in areas of cybersecurity, authentication, fraud prevention, financial education, financial management, data analytics, and customer experience studies in digital financial services. The FinTech center will also promote the digitization of Government-to-Person (G2P) and Person-to-Government (P2G) payments in Pakistan.

Dr. Richard Anderson said that it was the first ever collaboration in the World with Pakistan, which will be extended to the Africans and other Asian countries. Dr. Umar Saif stated that it would facilitate the smartphone transactions and establish transparency in the system.

DFSRG is a research group at Washington University supported by the Bill and Melinda Gates Foundation. It aims to improve the abilities of banks and mobile operators by deploying Digital Financial Service (DFS) products and providing technological solutions.
Riaz Haq said…
State #Bank to launch a #mobile app for financial transactions across #Pakistan. #mobilemoney #financialinclusion http://bit.ly/2ofA2Kp

The State Bank of Pakistan (SBP) has developed a mobile application – Asaan Mobile Account (AMA) – to allow financial transactions across the country.

The announcement was made by SBP Executive Director Syed Samar Hasnain while speaking at the event of rebranding of Tameer Microfinance Bank as Telenor Microfinance Bank. He said that AMA app will provide a single platform to all bank account holders on different mobile phone networks to conduct financial transactions, which will be like creating “universal interoperability”.

The application will be simple to use and will not necessarily require the use of smartphones. People with feature phones will also be able to benefit from the app. It will take about two minutes to create the account, with a cost of Rs. 10 for the verification of users’ information. Director said,

“People could pay their utility bills, while firms could disburse salaries and pensions via that application. The application would also help people make payments to their dry cleaner, milk vendor, barber and etc… Transactions would definitely have financial limitation and caps…”

National Database and Registration Authority (NADRA) is also on board with SBP for verifying clients’ information. Director added that the objective of the app is to reduce transactions in hard cash and avoid money thefts.

He further said that the number of branchless bank accounts has increased 3.7 times over the last year and the app will help SBP achieve its vision of providing access of banks to 50% adult population by 2020.

Telenor Microfinance Bank Chief Executive Officer Ali Riaz Chaudhry said that 100 million people in Pakistan are involved in economic activities in the country and 80 million of them don’t even have access to money and bank accounts. He said,

“We have set a target of providing access to money and banks to some 50 million people in the next three-four years. 20 million people transferred money worth Rs. 200 billion via Easypaisa in the last one year,”

SBP Director said that the AMA app was in the implementation stage and would be launched in June 2017.
Riaz Haq said…
Karandaaz #Pakistan signs grant agreements with 4 ‘#FinTech Disrupt Challenge’ winners - https://pakwired.com/karandaaz-pakistan-agreements-fintech/ … via @pakwired

One of Pakistan’s top financial technology & inclusion players, Karandaaz Pakistan, has signed grant agreements with four winners of the ‘FinTech Disrupt Challenge’ 2017. Aimed at hunting for extraordinary startup ideas worthy of creating substantial social impact, the second chapter of FDC solicited innovative responses to bottlenecks in Pakistan’s financial services sector.

Held at a local hotel in Islamabad, the event saw Karandaaz Pakistan CEO Mr. Ali Sarfraz signing grant agreements with the FDC 2017 winners. CreditFix, the FDC ’17 winner founded by Owais Zaidi, was awarded a grant of USD $100,000. Three runners-up namely Agri-Gate by Saad Tamman, UniKrew Solution by Naveed Tejani, Syed Taha Ali, and Muhammad Naveed Shareef, and Invoice Wakalah by Muhammad Waseem Sheikh, received USD $20,000 each in funding.

Through FDC 2017, Karandaaz had invited startups in five thematic areas including access to financial services, payments, e-commerce, interoperability, and early stage ideas related to mWallet use cases, education of financial services through technology, customer engagement/experience, microcredit, and digital savings. Banks, government regulators, incubators, and complementary actors from the FinTech industry had assembled together at the event to hear the 23 shortlisted startups present their ideas in front of a panel of experts.

“We are confident that the grants we have released today will help these promising startups go to market and change Pakistan’s financial services landscape for the better,” said Mr. Ali Sarfraz, CEO, Karandaaz Pakistan. “The FinTech Disrupt Challenge is a remarkable platform through which we give emerging and aspiring fin-tech players of Pakistan an opportunity to materialize their passion of promoting financial inclusion in the country. I wish CreditFix, Invoice Wakalah, UniKrew, and ‘Agrigate’ the very best of luck for the future.”

The FinTech Disrupt Challenge is an extension of Karandaaz Pakistan’s overall ambition of promoting financial inclusion to marginalized segments of the society. The company extends financial and technical support to financial technology startups which showcase substantial potential to create value for the society.

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