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).
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.
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
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.
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.
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.
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.
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 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.
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.
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 inclusio
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.
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.
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.
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.
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.
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.
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.
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 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).