Businesses, large or small, are an important part of any society and fulfil various needs and functions. On one hand, they provide livelihood and employment to owners and workers, and on the other hand, they produce and distribute essential goods without which populations may not thrive.
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.
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.
Financial inclusion is increasingly recognised as a policy instrument to deliver on policy objectives such as welfare, health outcomes and food security. In fact, it is deemed so important that the recently published in SDGs include equal access to financial services for all people as one of the goals to ending poverty.
In economics, the process of managing income shortfalls is known as “consumption smoothing” and loans along with savings are the two options used to manage such shortfalls. In the absence of sufficient savings, the availability of loans is crucial to meet expenses.
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 inclusion.
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.
No-frills - or basic bank accounts - are another tool in the arsenal of central banks and financial service providers that are interested in promoting universal financial inclusion. They traditionally have two defining characteristics.
Despite encouraging advancements in the number of first time bank account holders, a startling gender gap persists in financial inclusion as a result of a variety of barriers to access across the developing world.
According to the Global Microscope 2015, Pakistan currently has one of the top five most enabling financial inclusion environments in the world. In the coming months it will be interesting to see how this environment impacts the nation’s financial inclusion progress.
According to the Access to Finance Survey 2015, access and usage of financial services has markedly increased in Pakistan since 2008. The recently released survey was commissioned by the State Bank of Pakistan.
Recently we wrote about the transformative effects of financial inclusion at the microeconomic level. We concluded that the use of each financial inclusion instrument leads to varying positive outcomes.
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).
Included in the targets of 7 of the 17 Sustainable Development Goals that were finalized in 2015, financial inclusion is seen as both a key solution to some of the most pressing development problems that our world faces today, and a core development goal in its own right.
Financial inclusion in Pakistan has improved slowly but steadily since 2008 according to most sources. This observation is based upon one topline indicator - percentage of the adult population that is financially included - which is calculated by three different institutions in Pakistan.
In 2014 2 billion people in the world didn’t have an account at a financial institution. While this number represents a 20% decrease in the unbanked population since 2011, globally a significant number of individuals still remain outside the formal financial sector.