Microfinance banks asked to expand access to financial services

KARACHI: Kazi Abdul Muktadir, deputy governor of the State Bank of Pakistan has expressed the hope that the microfinance banks (MFBs) will take advantage of a favourable market environment by investing in innovative technologies and products in order to grow their businesses and expand access to financial services in Pakistan, according to a statement on Monday.
Speaking as a chief guest at the commercial launch of branchless banking by Waseela Microfinance Bank, he stressed upon the SBP’s broader goal to provide inclusive financial services to the poor and low-income groups, it said.

“I firmly believe that microfinance and branchless banking are complementary to each other, and together they will bring the advantages of inclusiveness, convenience, ubiquity, and efficiency as Pakistan offers best regulatory framework and industry infrastructure for microfinance,” he added.

Abdul Muktadir said that the World Bank’s Consultative Group to Assist the Poor (CGAP), in one of its studies has also recognised Pakistan as one of the fastest growing branchless banking markets in the world, and a laboratory of innovation. “We hope that with the entry of new players and scaling-up of the existing institutions, the present growth momentum will build up strongly and progressively,” he added.

The deputy governor said that branchless banking is moving at a phenomenal pace in Pakistan and added that it should be ‘our endeavor to achieve maximum benefits from these developments.’ He said that SBP has been promoting innovations in products and delivery channels through policy and regulatory measures and market interventions.

He said the recent branchless banking data indicates that transactional volume of nearly 32 million valuing Rs140 billion during the single quarter of July-September, 2012 has been achieved by only two players. These players have registered more than 1.8 million Mobile-Wallet accounts largely of those people who have previously been un-banked and under-banked, he said, adding that Mobile banking is also facilitating repayment of microfinance loans and we are seeing increasing number of partnerships between Microfinance Institutions (MFIs) and branchless banking providers.

The mobile phone subscribers in Pakistan are around 120 million and Mobilink has the largest share of over 36 million subscribers, he said.

The current teledensity is above 72 percent which is much higher than the level of financial access that hovers around 12 percent. This factor alone highlights the immense potential for mobile banking in the country. “The role played by the Government, PTA and the Mobile Operators for achieving this high level of penetration, especially under our existing socio-economic conditions, is highly commendable,” he added.

Posted in: Business news