Digital Financial Services

Pakistan's Road to a Cashless Ecosystem

Jul 14, 2023
In 2022 it was reported by the State Bank of Pakistan (SBP) that approximately 30% of the broad money (i.e., the total amount of money circulating in a country’s economy) is in cash form. The comparative figure for the developing world as a whole is less than 20%.

Micro-Retailer Financing – The Next Level in the Digital Financial Services Domain

Jun 26, 2023
Kiryana Stores" or micro-retailers are the lifeblood of local communities, bridging the divide between consumers and both local and international Fast Moving Consumer Goods (FMCG) giants such as Unilever, P&G, and National Foods.

Determinants of and Detriments to Financial Inclusion in Pakistan

Feb 12, 2020
Access to financial services has been a subject of increasing policy debate in developing countries. Financial inclusion is important as it reduces poverty and inequality, allows poor people to smooth out their consumption and invest in their futures through education and health.

Financial Inclusion: Demand Side Surveys and Definitional Issues in Pakistan

Dec 24, 2019
Digital finance and financial inclusion offer several benefits not only to financial services users but also to digital finance providers, governments and the economy at large as well.

Mapping Creditworthiness of Unbanked Population

Oct 14, 2019
Conventional banking has typically focused on the 5Cs of “Credit” – character (identity), collateral (security), capacity (to repay), capital (savings, investments, or other assets), and conditions (usage of loan) – while making lending decisions.

DFS: Regulatory and Fiscal Impediments

Jun 28, 2019
Several governments in developing world, along with the donor community, seem keen on developing an “enabling environment” for digital financial services (DFS)[1]. DFS is seen as a pathway towards financial inclusion, which is being promoted as part of global development agenda.

Enhancing Savings through Digital Means

Pakistani individuals, firms and government are not generating enough savings to meet the economy’s investment requirements. This lack of domestic savings results in an inherent dependence on “foreign inflows” in the form of remittances, issuance of sovereign bonds/loans and flows under Foreign Direct Investment (FDI).

The Unbanked: A hundred-million question

In the context of developing countries like Pakistan, financial inclusion is generally considered to be more about broadening the access of formal financial services (payments, savings, loans, insurance products etc.) to individuals and Small & Medium Enterprises (SMEs) that are currently out of the banking system.

Why Digital Finance Supervisors Should Automate Data Collection

May 15, 2018
The advent of technology solutions to data collection — or “RegTech” — has made it possible for supervisors to collect huge amounts of data from digital financial services (DFS) providers at a more granular level than ever before. The shift toward granular data can help regulators do a better job of supervising DFS.

RegTech and Digital Finance Supervision: A Leap into the Future

Feb 28, 2018
This Brief aims to provide national and global policy makers with a clear picture of the rapid development of digital financial services for the poor and the need for their attention and informed understanding.

The Unrealised Potential of Mobile Wallets in Pakistan

Dec 19, 2017
This blog provides an overview of the progress, or lack thereof, that mobile money providers in Pakistan are making towards driving mobile wallet ownership and usage to improve financial inclusion in the country.

API's for Financial Inclusion

Oct 5, 2017
API’s have become imperative for organisations to provide more efficient services to their respective customers, read to find out how.

How Do Mobile Money Fee Structures Impact the Poor?

Aug 10, 2017
As mobile money products continue to expand within emerging markets, effective, pro-poor pricing for transferring small amounts of money will be important to mobile money’s success in bringing new users into the formal financial system.

Analysing the impact of BVS regulations on OTC Money Transfer in Pakistan

Jul 28, 2017
The State Bank of Pakistan (SBP), in July 2016, developed regulations on necessitating Biometric Verification for Over the Counter (OTC) money transfers (MT's) in Pakistan. These regulations, published as part of the updated branchless banking regulations of July 2016, are intended to enhance compliance to Know Your Customer (KYC) requirements and the Anti Money Laundering (AML) and Combating Financing of Terrorism (CFT) guidelines issued by the SBP.

Busting the Myths on Pakistan’s 50 Million “Unreachable” Women

Jul 11, 2017
When you ask financial service providers in Pakistan about reaching women customers, you mostly hear about the many challenges. They cite women’s restricted mobility, low levels of literacy, unfamiliarity with technology, and lack of need for financial services.

The Need for a Changing Regulatory Landscape for Digital Financial Services

Apr 22, 2017
GSMA’s recent report titled ‘The Mobile Economy’ for 2017 has undertaken a comprehensive scan of the global telecommunications landscape. Given the direct impact of telecommunications on digital financial services (DFS), increase in mobile subscribers presents a growing opportunity for increasing the footprint of DFS.

Contextualizing P2G within an E-Government Approach

Dec 22, 2016
The Central Bank of Jordan and the Indian State of Karnataka have been developing their person-to-government (P2G) payment channels and instruments within larger e-government initiatives.

A Public-Private Partnership to Digitize Bus Fares in Rwanda

Oct 18, 2016
The government of Rwanda since 2000 has prioritized the building of a “knowledge-based economy” as articulated by Vision 2020. A couple of key milestones on the path toward this vision include digitization of government services and a population that is 90% financially included.

The Promise of Digitising P2G Payments

Oct 6, 2016
The recently launched Global Landscape Study on Digitizing P2G Payments estimates global person-to-government (P2G) payment flows at USD 7.7 trillion.1 As the name suggests P2G payments essentially include mandatory payments, payments for government services, and co-payments for social benefits.

Adoption - The Bottleneck in Scaling Mobile Financial Inclusion

Aug 31, 2016
The second edition of The Brookings Institute’s Financial and Digital Inclusion Project (FDIP) Report presents findings on financial access and usage from a diverse set of 26 countries. The publication is built around a scorecard generated using four composite indicators: country commitment, mobile capacity and regulatory environment.

Mobile Wallets: A way to bring transparency to ROSCAs?

Jun 22, 2016
Rotatory Savings and Credit Associations (ROSCAs) are a popular mode of saving in Pakistan. In local parlance, they are called “committees” and are particularly popular among women.

Using HCD to Develop User Friendly Apps and Interfaces

Jun 2, 2016
Karandaaz Pakistan commissioned GRID Impact, a global research, innovation and design firm, to develop concept designs for a smart phone application for mobile money. With 8.7% of adult Pakistanis reportedly having an account at a financial institution.

The State Bank's New Regulations for Prepaid Cards

May 12, 2016
Karandaaz Pakistan published a blog post on the use of prepaid cards in Pakistan. Among the needs discussed was a clear framework for the KYC requirements governing Pakistan’s prepaid market. That regulation arrived earlier this week.

What is Human-Centered Design?

May 4, 2016
Human-centered design (HCD) is a methodology that has existed for a while but began to resemble its current form in the early 1990s. More recently, the development sector has begun to adopt it in various sectors including the field of financial inclusion.

Prepaid Cards and The Unbanked

Apr 27, 2016
Borrow a relative’s credit card. Have a friend pay. For those excluded from the formal financial system, paying online is more often a matter of finding the right proxy than finding the right tool. Innovations such as mobile wallets continue to expand access to electronic payments.

Mobile Money: The OTC and Agent Dilemma

Mar 31, 2016
In Pakistan, there are two primary transaction channels in the branchless banking sector: mobile wallets, and over-the-counter (OTC). In contrast to the mobile wallet platform where customers execute all transactions on their mobile phones themselves, the OTC model is facilitated by an agent. This channel is a convenient and reliable.

Experimenting with a Mobile Wallet on a Low-Cost Smartphone

Mar 21, 2016
There has been a steady rise in the promotion of mobile wallets as a viable alternative to conventional banking services.This innovative channel, MNOs seek to streamline the banking process and increase financial outreach to the wider population.

Advancing Financial Inclusion through Innovative E-Commerce

Mar 7, 2016
With foundations well in place for digital commerce to flourish in Pakistan, it is only a matter of time before e-commerce takes the Pakistani consumer market by storm.

Effectively Communicating with the Unbanked

Feb 3, 2016
The process of graduating from an unaware potential customer to a fully aware and regular user of mobile wallets is not necessarily a simple and linear one. It is important that targeted, customer segment specific, communication takes place at every stage of awareness to help individuals.

Making Mobile Money Accessible in Pakistan

Jan 25, 2016
Mobile wallets could have a revolutionary impact on financial inclusion in Pakistan. While 8.7% of adult Pakistanis reported having an account registered at a financial institution, approximately 48% of financially excluded adults reported owning a mobile phone. This means that the mobile channel holds great potential when it comes to financial outreach.

Smarter Wallets, Engaged Customers

Jan 21, 2016
With increasing competition in the branchless banking OTC (over the counter) business, this segment has become highly commission intensive, leading to diminishing margins for MFS (mobile financial services) providers. This reality has pushed mobile money providers to focus on mobile wallets as an alternate service delivery channel.

Mobile Wallet Registration: One Customer's Experience

Jan 12, 2016
In order to achieve the 50% financial inclusion goal that has been set by the State Bank of Pakistan, Karandaaz Pakistan believes that leveraging the ubiquity of mobile phones to increase mobile wallet uptake is critical. There are 124 million registered mobile SIMS in Pakistan.

Pakistan: Is Mobile Money a Viable Alternative to Banking?

Jan 7, 2016
In a world where 2 billion adults lack access to formal financial services, Pakistan is no exception. The 2014 Financial Inclusion Insights (FII) survey estimates that 93% of Pakistani adults are financially excluded as only 7% of the respondents reported to having a bank account.

Drawing Inspiration from DFS Innovations: Part II

Jan 5, 2016
In a previous blog, we highlighted a couple of the key elements that go towards fulfilling the goal of digital financial inclusion which is defined as digital access to and use of formal financial services by excluded and underserved populations.

Drawing Inspiration from DFS Innovations:Part I

Dec 21, 2015
The launch of M-Pesa in 2008 and its subsequent exponential growth heralded a new era of digital financial inclusion: one which promises to bring the unbanked and underbanked into the formal financial sector. A definition of digital financial inclusion is digital access to and use of formal financial services by excluded and underserved populations.

The Promise of Mobile Money in Pakistan

Dec 17, 2015
The penetration of traditional financial service delivery channels in Pakistan is low in comparison to the global average. There are approximately 6 ATMs and 9 commercial bank branches per 100,000 adults in the country versus the global average of approximately 34 ATMs and 12 commercial bank branches per 100,000 adults (World Bank, 2013).
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