Pakistan's Fintech Revolution to Promote Financial Inclusion

Pakistan is ranked 16th among 26 nations ranked by Brookings Institution with an overall score of 69% in "The State of Financial and Digital Inclusion Project Report" for 2017.  As the world observes the "World Financial Inclusion Week" this week (October 30-November 3, 2017), the Internet revolution is enabling rapid growth of financial technology (fintech) for increasing financial inclusion in Pakistan. The purpose of the observance of the week is to "hold conversations focused on how new products and partnerships are advancing financial inclusion, not just access", according to the Center for Financial Inclusion. It is important for Pakistan where about 100 million adults lack access to formal and regulated financial services.

Source: Brookings' Digital and Financial Inclusion Report 2017

Importance of Financial Inclusion:

Access to regulated financial services for all is essential in today's economy. It allows people to save, borrow and invest. Those who lack access to regulated banking services are often forced to resort to work with unscrupulous lenders who trap them in debt at unaffordable rates. Such loans in extreme cases leads to debt bondage in developing countries. Financial inclusion is good for the individuals as well as the national economies. It spurs economic growth and helps document more of the economy.


Fintech (financial technology) is bringing financial services to the unbanked population through non-bank institutions licensed by the State Bank of Pakistan, the top bank regulator in the country. One example of a non-bank is Telenor Pakistan, a leading mobile phone service operator, offering financial services via a large network of agents, currently over 70,000, far exceeding the total number of branches of all the banks in the country.

Easypaisa, a service operated by Telenor Pakistan, offers basic financial services like open a bank account, deposit or withdraw money, transfer funds, make mobile payments and pay utility bills. 


Another important player promoting financial inclusion is Karandaaz Pakistan , a non-profit organization, set up by UK’s Department for International Development and Bill and Melinda Gates Foundation.  It is providing grants to a number of local initiatives to develop and promote financial technology solutions in Pakistan.

Karandaaz Pakistan is promoting Fintech startups in  5 areas of focus:

1) Access to Financial services

Credit Scoring Models, Formalize savings through need based products, Digital lending services, and Insurance

2) Payments

Retail payments solutions through QR code,  Supply / Value Chain Digitization,  Ideas around digitization of online payments and merchant payments

3) E-Commerce

Smoothening of on-boarding process, Enabling Escrow Accounts for a retail merchant, Alternate payment modes other than COD

4) Interoperability

Innovative ideas to address the lack of interoperability among m-wallets

5) Early stage ideas related to:

 M-Wallet Use cases, Education of Financial Services through technology, Customer Engagement / Experience, Micro Credit, Digital Savings

Finja's SimSim Mobile Payment:

Finja is a Pakistani fintech startup that recently introduced SimSim app for mobile payments. It's the first such application that has received approval of the State Bank of Pakistan. Finja has raised $1.5 million in venture funds so far. SimSim uses NADRA, a biometric citizen identity card that the Pakistan government has issued to almost its entire adult population, comprising around 60 percent of the total population of 207 million.

Private Credit Bureaus:

Credit data and scoring are essential to facilitate risk assessment and lending by financial institutions.
Under the Credit Bureaus Act, 2015, privately-run credit bureaus can collect and disseminate the credit data from both financial and non-financial institutions including retailers, insurance companies, utility providers and landlords, as notified by the federal government, according to Muhammad Akmal, Director of Banking Conduct and Consumer Protection Department at the State Bank of Pakistan. The bureaus can do credit scoring, consolidate credit data for analysis and research purposes.

Progress To Date:

According to the latest State Bank statistics on branchless banking (BB) sector, m-wallets grew by 87% , reaching 27.3 million by the end of June 2017. It has a lot of room for growth in a county where about 100 million adults lack access to regulated financial services.

Pakistan is ranked 16th among 26 nations ranked by Brookings Institution with an overall score of 69% in "The State of Financial and Digital Inclusion Project Report" for 2017.


Pakistan is ranked 16th among 26 nations ranked by Brookings Institution with an overall score of 69% in "The State of Financial and Digital Inclusion Project Report" for 2017.  Access to regulated financial services for all is essential in today's economy. It allows people to save, borrow and invest. Those who lack access to regulated banking services are often forced to resort to work with unscrupulous lenders who trap them in debt at unaffordable rates. Such debt in extreme cases leads to bondage in developing countries. Financial inclusion is good for the individuals as well as the national economies.  It spurs economic growth and helps document more of the economy.  The rapid growth of mobile phones and Internet access in Pakistan offers a unique opportunity to increase financial inclusion in the country. A number of players are working on financial technology to make its application a reality in Pakistan. Among these players are non-bank banks like Telenor and non-profits like Karandaaz.

Related Links:

Haq's Musings

Financial Services Sector in Pakistan

Pakistan Ranked Among Top 5 For Financial Inclusion Efforts

Pakistani Banks Post Strong Growth

Branchless Banking in Pakistan

Pakistan Ranks High in Microfinance

World's Largest Democracy Tops Slavery Charts

NADRA's Biometric Database


Riaz Haq said…
Asia ripe for Islamic finance as fintech comes to the fore
IFSB head sees capacity building and international standards required

KAZUKI KAGAYA, Nikkei senior staff writer

KUALA LUMPUR -- The potential for growth of Islamic finance in the Asian market is much bigger than might be expected, said Zahid ur Rehman Khokher, acting secretary-general of the Islamic Financial Services Board, in a recent interview with the Nikkei Asian Review.

Speaking at the organization's headquarters in Kuala Lumpur, he also discussed the developing role of fintech within the sector, and the IFSB's role in setting standards for the application of information technology in Islamic finance.

According to IFSB statistics, global Islamic finance including bank assets stood at an estimated $1,893 billion as of the end of 2016. Asia, excluding Middle Eastern oil producing countries, accounted for about 22% of the total.

But Zahid feels that the region's growing populations provide fertile ground for expansion.

"Islamic finance has enormous potential for growth in the Asian market," he said.

He cited microfinance as a service that could be an area of great strength. "Some of the key Islamic banking markets in the world are in the Asian region, while Islamic capital markets are also flourishing in many countries, with many others actively exploring opportunities in Islamic finance," he said, referring in particular to Indonesia, Pakistan and Bangladesh, the world's three largest Muslim-majority countries.

He noted the importance of Islamic microfinance in addressing issues of financial inclusion and improving participation in the financial sector, highlighting that "innovations in fintech, such as crowdfunding are also beginning to play a part in Islamic finance."

"The IFSB has been closely monitoring such global developments in fintech" he said, noting that "a fundamental question for standard-setters and regulators is how fintech should be addressed from a regulatory and financial stability perspective, which doesn't hinder the growth of this sector."

With the range of new services that are emerging, Zahid feels that capacity building is the biggest challenge to accelerating development. "There is a shortage of staff with the appropriate level of expertise and knowledge in regulations and product development in Islamic finance," he said. "There is a need for developing human resources and appropriate expertise within central banks, Shariah boards, as well as in commercial financial institutions," he emphasized.

Cross-border transactions have increased on the back of a global expansion of Islamic finance driven by soaring crude oil prices since around 2000. Zahid explained that this has helped oil wealth from the Gulf Cooperation Council -- a group of six oil-producing countries including Saudi Arabia -- and elsewhere in the Middle East to flow into Asia.

"Investors from the GCC and others, including North Africa, have been active buyers of sukuk, or Islamic bonds, issued in Asia," he said. "In 2015, for example, 42% of investors in Hong Kong's sovereign sukuk issuance, were from the GCC. Similarly for a recent Indonesian sovereign sukuk issuance, GCC investors comprised 41%."

Zahid stressed that the IFSB's mandate was to ensure the stability of the Islamic financial services industry, "through the issuance of standards, technical notes and guidance notes. The IFSB has already issued 29 standards, technical notes and guidance notes," he said. "We also conduct training workshops in the form of facilitating the implementation of IFSB standards workshops as well as providing technical assistance and policy advice to member jurisdictions. The IFSB normally plans and organizes nine to 10 workshops every year in various member jurisdictions," he continued.
Riaz Haq said…
Building a secure and inclusive
global financial ecosystem

The new annual FDIP report, published in August
2017, highlights selected financial inclusion-related
updates for each of the 26 countries featured in last year’s
report and identifies possible next steps for advancing
financial inclusion. It identifies three key overall findings,
based upon trends observed across the international
financial inclusion landscape throughout the course of the
FDIP lifecycle: 1) There has been growth in national-level
recognition among the FDIP countries that financial
inclusion is a key ingredient for sustainable development;
2) “Fintech,” the intersection of technological innovation
and the financial sector, possesses tremendous potential
to accelerate progress toward financial inclusion; and
3) Countries must amplify investments in cybersecurity
efforts and knowledge-sharing in order to fully reap the
benefits of financial services innovation.

Pakistan Update:

Formal commitment milestone
• Committed to the Maya Declaration in 20111
Selected financial inclusion highlights
• Introduced “Level 0” risk-proportionate accounts in 2011 to facilitate access to formal financial
services among underserved populations2
• Launched the National Financial Inclusion Strategy in May 20153
• Joined the Better Than Cash Alliance in September 20154
Recent updates
• An April 2017 article noted that the government of Pakistan had recently announced the launch of
the Pakistan Financial Inclusion and Infrastructure Project, with funding of USD 130 million provided
by the International Bank for Reconstruction and Development and the International Development
Association. Three organizations in Pakistan will implement the project: the Pakistan Microfinance
Investment Company, National Savings, and the State Bank of Pakistan’s development finance group.
The project aims to advance financial inclusion by promoting access to digital payments among
businesses and households, as well as advancing access to credit for micro- and small and mediumsized
enterprises. 5
• In February 2017, Finance Minister Ishaq Dar emphasized that the government aimed to facilitate
broadband capability to all uncovered areas by the following fiscal year in order to support the
government’s financial and digital inclusion goals.6
• During the Digital Banking and Mobile Payments Summit held in February 2017, a representative of
the State Bank of Pakistan stated that the Bank is working to introduce a category of “digital bank”
that will incorporate new and emerging technologies through a financial services entity.7
• During a World Economic Forum meeting held in January 2017, Mastercard announced it was
collaborating with Pakistan’s NADRA Technologies to help “optimize national ID cards with electronic
payments functionality.” This effort will allow citizens to “carry out financial transactions and receive
government disbursements by utilizing the unique 13-digit identification number of their identity
card,” as well as use their ID to send and receive remittances.

In October 2016, the Pakistan Post and Karandaaz Pakistan signed a partnership agreement to digitize
money order services at Pakistan Post. According to the terms of the agreement, Karandaaz Pakistan
will provide technical support in developing a new product called the “mobile money order,” which
will be made available through Pakistan Post.9
Next steps
• Promote registration of mobile wallet accounts to deepen usage of diverse financial services
• Advance implementation of the Pakistan Financial Inclusion and Infrastructure Project
• Enhance broadband infrastructure to support digital and financial inclusion
Riaz Haq said…
State Bank of #Pakistan: #Pakistanis fast adopting #digital financial transactions - The Express Tribune #fintech

Pakistan is fast moving towards adopting digital modes of payment with the number of electronic transactions registering a 17% year-on-year growth in 2016-17, stated the central bank in its annual performance review.

With the advent of mobile broadband technology, Pakistan has witnessed a surge in digital adoption with a number of ecommerce businesses as well as online methods of conducting payments deriving immense benefit.

Internet and mobile banking emerged on the horizon while ATM machines remained king of the ring in an otherwise, cash-based society.

“Following the global trends, the payment systems landscape in Pakistan has also transformed rapidly during last 6-7 years with stellar growth in payment cards, mobile, internet banking transactions,” the State Bank of Pakistan (SBP) said in the annual performance review.
Banks, businesses and consumers in the country made a total of 625.8 million transactions via electronic banking channels worth Rs37.1 trillion in fiscal year 2017.

This number is 17% higher than 543.8 million transactions conducted in the prior year. However, the value of transaction remained flat.

Commercial banks, via their real-time online branches (RTOB), deposited and withdrew cash and transferred funds through intra-bank facility worth Rs31.1 trillion during the year via 143.6 million transactions during the year.

“Rs31.1 trillion…was 23% of total e-banking transactions by volume and 84% by value,” the central bank said.

Internet banking increased 32% to 25.2 million transactions worth around Rs969 billion in fiscal year 2017. Mobile phone banking surged 12% to 7.4 million transaction valuing Rs141 billion in the year.

“The initiation of projects like the development of National Payment Gateway, online collection of taxes and duties and elimination of cheques from government payments will have far reaching implications on banking system efficiency, effectiveness and access,” SPB said.

Some 25 banks offered internet and call centers/IVR (interactive voice response) banking services, while 18 banks dealt in mobile phone banking as on June 2017.

On the contrary, paper-based (cheques, pay orders, demand drafts and others) transactions were recorded at 451.8 million valued at Rs139.6 trillion in the year.

King of the ring

“ATMs are the most frequently used channel for withdrawal of cash,” the SBP said in the report.

A total of 397.7 million transactions were processed on ATMs valued at around Rs4.6 trillion.

“During Ramazan and the ensuing Eidul Fitr holidays in 2017, a total of Rs442 billion were withdrawn through ATMs,” it said.

A total of 32 banks operate 12,689 ATMs across the country as on June 30, 2017. This was a growth of 11.5% in one year.


E-Commerce (online shopping) in Pakistan also started picking up with 571 merchants offering their products online. During FY17, 1.2 million transactions valued at Rs9.4 billion were processed through e-commerce.

PSO set to offer branchless banking services

Point of sale

In order to encourage the use of point of sale (POS) machines, banks and third party providers are being encouraged to incentivise merchants, by offering them associated value added services.

In addition, more convenient payment methods like QR codes and mobile apps are also being introduced in the market by payment schemes and new fintechs; however, their uptake is still in infancy and limited to upscale outlets.

However, the total number of POS machines grew by 7.3% to 54,490 during the year whereas the value of total transactions processed through the machines grew by 23% to Rs246 billion, the central bank said.

The number of payment/plastic cards increased 8.8% to 36.6 million as on June 30, 2017. These cards include over 17.9 million debit cards, over 8 million ATM-only cards and around 1.3 million credit cards.

Riaz Haq said…
Bank of #China (BoC) is 2nd Chinese bank to open in #Pakistan after Industrial and Commercial Bank of China (ICBC)

The Industrial and Commercial Bank of China (ICBC) has already opened two of its branches in Karachi and Islamabad and is providing various services, including corporate finance, investment banking, foreign deposits, project loans, and working capital loans.

The Bank of China (BoC) became operational in Pakistan as it inaugurated its first branch in Karachi on Tuesday.

Emphasising that it was "a great honour" for the bank to be launched in Pakistan, BoC Chairman Chen Siqing noted that the Karachi branch was its first in South Asia.

The Dawn quoted him as saying that the bank would strengthen the "brotherly relations" between the two countries in the financial sector.

Siqing also highlighted that the bank could help Pakistan effectively reap the benefits of Beijing's economic prosperity.

Welcoming the bank to Pakistan, State Bank of Pakistan (SBP) Governor Tariq Bajwa, said that the increased diversity of foreign banks would increase the country's economic resilience.

He also expressed hope that Pakistan would learn from BoC's expertise in the small and medium enterprises sector.

Speaking during the launch, Acting Chinese Ambassador to Pakistan Zhao Lijian said that the opening of the bank "marked the confidence of the Chinese corporate sector in Pakistan's economic situation."

President Mamnoon Hussain, who was also present on the occasion, expressed confidence that the newly-launched bank will help accelerate infrastructure development and overall economic growth of the country.

He termed the BoC's arrival to Pakistan a "memorable event in the everlasting friendship between Pakistan and China".

President Hussain assured the BoC of the continued support of the government and State Bank of Pakistan in expanding its operations in the country.

The BOC was allowed to commence banking business in Pakistan on September 19 this year.

This is the second Chinese bank which has been allowed to operate in Pakistan. The State Bank of Pakistan had issued a license to BoC in May 2017.

The Industrial and Commercial Bank of China (ICBC) has already opened two of its branches in Karachi and Islamabad and is providing various services, including corporate finance, investment banking, foreign deposits, project loans, and working capital loans.

Riaz Haq said…
#Pakistan to issue Islamic & conventional #bonds to borrow $2 billion to bolster reserves amid widening deficits

Pakistan has picked arrangers for a potential $2bn debt sale planned for later this year, according to two people familiar with the deal, in a bid to bolster falling reserves as the economy faces increased signs of stress ahead of elections next year.
South Asia’s second-largest economy is planning to offer Shariah-complaint and conventional bonds depending on market conditions, the people said, asking not to be identified because the information is private.
The sale would come as Pakistan’s finances are starting to show strain. The nation’s foreign-exchange reserves have fallen 15% to $19.8bn this year as its traditional exports, such as textiles, dwindle and imports rise. The World Bank estimates that $17bn of external financing is needed in the next financial year for Pakistan to bridge its rising debt payments and current account deficit, the lender said last month.
Pakistan is planning to raise $1bn from a sukuk offering, and has mandated Citigroup, Standard Chartered, Deutsche Bank, Dubai Islamic Bank and Noor Bank to manage the sale and has picked Citigroup, Standard Chartered, Deutsche Bank and Industrial & Commercial Bank of China for a potential conventional bond offering of an equal amount, the people said.
The country’s finance secretary, Shahid Mahmood, said in August that an assessment was being made to issue either sukuk or bond of about $1bn by the second quarter of this fiscal year starting in June. That comes as Pakistan’s current account deficit is expected to widen to 5.7% of gross domestic product, from a deficit of 4.4% in 2016, according to the International Monetary Fund.
Pakistan’s finance ministry didn’t immediately respond to requests for comment.
National elections are expected to be held in the first week of August 2018, with the ruling party under pressure as its leader, former prime minister Nawaz Sharif, was barred from office by the Supreme Court in July following an investigation into his family’s finances. Sharif, along with Finance Minister Ishaq Dar, now face criminal charges and both deny any wrong-doing.
Riaz Haq said…
#Broadband users in #Pakistan cross 48.13 million • Dispatch News Desk #3g #4g #smartphones

The total broadband subscribers including for 3G and 4G services have crossed around 48.13 million mark in the Country till September this year, registering a reasonable growth rate with each passing month.

As per latest figures issued by Pakistan Telecommunication Authority (PTA), the number of broadband users was around 46.9 million till August 2017 and major contribution in one month has been made in shape of 3G and 4G subscribers by Mobile Phone Operators which reached 46 million by August.

The tele-density of total broadband has reached 22.6 per cent while tele-density for mobile broadband touched 21.6 per cent mark till the period mentioned. Total mobile phone subscribers in the country have reached 141 million mark with tele-density of 70.25 till August 2017.

The number of broadband subscribers in other technologies included DSL 15,53,062, HFC 51,226, Wimax 1,55,747, FTTH 52,749, EvDO 5,68,368 and other 9,264 subscribers.

Experts of telecom industry are having a viewpoint that portable mobile broadband devices like MiFi and Wingles are one of the main reasons of this growth in 3G/4G subscribers and many more will follow this trend in upcoming days.

Meanwhile, the Country’s largest mobile phone operator, Mobilink has overtaken its competitors as 3G/4G player after official figures were released by PTA. Jazz subscribers base was 13.7 million 3G and 1.35 million 4G till the period mentioned.

A senior official of the Company said key to this leading position is consistent investment to further innovate on behalf of subscribers by delivering not just the best 3G/4G and voice network, but also improvements in customer service, and product lines.

Riaz Haq said…
Alibaba in talks to buy big stake in Telenor Bank

By Salman Siddiqui Published: September 21, 2017

KARACHI: Consumers in Pakistan may be able to make online payments globally through Alibaba Group’s Alipay as the Chinese third-party mobile and online payment platform is in advanced talks with a local financing and technology company to finalise details of share purchase.

Alipay is in talks with Telenor Microfinance Bank Limited for acquiring a significant stake in the company, industry officials confirmed to The Express Tribune.

“We have received a due diligence request from Telenor Microfinance Bank,” acknowledged a State Bank of Pakistan (SBP) official.
It is mandatory for every bank in Pakistan to seek the central bank’s permission for due diligence for stake sale to a third party.

Even if the two parties agree to execute a sale and purchase agreement, the deal remains subject to approval of the central bank and other regulators.

Alipay is in talks with Telenor Microfinance Bank Limited for acquiring a significant stake in the company, industry officials confirmed to The Express Tribune.

“We have received a due diligence request from Telenor Microfinance Bank,” acknowledged a State Bank of Pakistan (SBP) official.
It is mandatory for every bank in Pakistan to seek the central bank’s permission for due diligence for stake sale to a third party.

Even if the two parties agree to execute a sale and purchase agreement, the deal remains subject to approval of the central bank and other regulators.
Alibaba testing Pakistan’s e-commerce market

“Alibaba’s team has been engaged (in discussions) with Telenor Bank for the past two months and they are at an advanced stage now,” an industry official revealed.

Telenor Group, which holds 100% stake in the fintech, wants to keep majority shares. However, “Alibaba may acquire up to 49% stake, if the business deal is done successfully,” said the official.

There is talk in the market that Alipay is acquiring a 40% stake in Telenor Bank at a price of $100 million. Former prime minister Nawaz Sharif met with Alibaba Group founding chairman Jack Ma in Davos earlier this year where the latter expressed interest in investing in Pakistan’s e-commerce sector.

In April 2017, Sharif met Alibaba President Michael Evans and discussed opportunities for introduction of the global e-commerce giant in Pakistan. Later in mid-May, the former premier visited the Alibaba headquarters in China and signed a memorandum of understanding.

Responding to the request for comments on the status of advanced talks and due diligence, Telenor Group Communications Vice President Atle Lessum said in an email, “As a principle, Telenor never comments on rumours and speculations.”

None of the officials contacted neither contradicted nor confirmed the development.

Finance Minister Ishaq Dar, while presenting the budget for 2017-18 in the National Assembly in May, had announced that the government would establish an e-gateway for online global payments.

“In order to facilitate transactions through mobile banking and e-gateway systems, the government is establishing a state-of-the-art e-gateway at the SBP at a cost of Rs200 million,” Dar said.

He maintained that Pakistan’s e-commerce was growing at a rapid pace. It is worth $150 million (Rs15.75 billion) now and is anticipated to increase to $1 billion by 2020. “ made sales close to $1 billion on Black Friday (in Pakistan),” he said.

The Telenor Group announced in March 2016 that it had increased its shareholding in Telenor Microfinance Bank Limited (formerly Tameer Microfinance Bank) to 100%.

The bank’s profit increased 5% to Rs895.35 million in 2016 from Rs851.74 million in the previous year, according to its annual report of 2016.
Riaz Haq said…
Bahrain’s Ithmaar Bank plans aggressive expansion in Pakistan
Bahrain-based lender to add more than 100 branches in Pakistan this year through its subsidiary Faysal Bank

Dubai: Bahrain-based Ithmaar Bank plans to add more than 100 branches in Pakistan this year through its subsidiary Faysal Bank, to capitalise on the country’s low penetration rate of banking services, a senior executive said.
Ithmaar Bank owns 66 per cent of Faysal Bank, whose contribution to the Islamic retail bank’s overall balance sheet would likely grow to more than half as a result of the expansion, Ithmaar Deputy Chief Executive Abdul Hakeem Al Mutawa said on Monday.

“We are planning to be over 500 branches this coming year and are aggressive in this,” Al Mutawa said in an interview.
“Banking penetration is around less than 20 per cent in Pakistan, so there are good opportunities to grow.” Faysal Bank, which is listed on the Pakistan Stock Exchange, focuses on corporate, commercial, retail and consumer banking activities.
Al Mutawa was speaking after Ithmaar Bank’s parent company, Ithmaar Holding, listed on the Dubai Financial Market on Monday.

The company is already listed in Bahrain and Kuwait.
“The listing is good news for the company for growth capital and we are well established now to approach the capital markets,” Al Mutawa said, adding that the bank had no imminent plans to raise funds through a bond or loan.
In Bahrain, Al Mutawa said there were opportunities to grow the business from working with the government on providing financing for social housing. The bank currently has 16 branches in the kingdom.
Bahrain’s Ithmaar Holding is exploring the sale of its 25.4 per cent stake in Bahrain’s BBK BSC, which has operations in Bahrain and Kuwait, India and Dubai, sources familiar with the matter told Reuters in August.
Al Mutawa declined to comment on the time frame for the disposal of the BBK stake or identify the name of the company advising IB Capital, Ithmaar Holding’s investment subsidiary managing the asset.
“The performance of BBK is very good and still part of the portfolio of IB Capital, and if there are opportunities to maximise shareholder value I’m sure the board will take those,” he said.
Riaz Haq said…
McKinsey & Co: #Fintech will add about 4 million #jobs, 93 million #bank accounts, $36 billion annually to #GDP, and $7 billion to #Pakistan government’s net revenue by 2025.

At least three fintechs are set to capitalise on the rapidly growing financial sector of Pakistan, targeting an entry in the country’s market, according to the central bank.

FonePay, Monet and TPL Rupya are entering Pakistan’s financial market, said a quarterly report of the State Bank of Pakistan (SBP), hinting at a rise in the business-to-consumer e-Commerce (e-B2C). Growing incomes, coupled with advancement in communication technology and expansion of internet access and branchless banking, has been propelling the sector forward, said the SBP report.

The new financial technology will enable people to make online transactions to anyone available on any mobile wallet account, which is not yet possible.

Fintech will add about 4 million jobs, 93 million bank accounts, $36 billion annually to the gross national product (GNP), and $7 billion to Pakistan government’s net revenue by 2025, according to McKinsey & Company, a worldwide management consulting firm.

“Bank accounts seem to be on track as there are 7 million today. This includes 1.8 million traditional accounts, accumulated over 50 years, and 5.2 million mobile/branchless accounts accumulated in around one-tenth of that time,” said National Technology Fund Ignite CEO Yusuf Hussain.

This is because globally, traditional bank accounts rise proportionately to GNP, but mobile accounts can rise exponentially. The central bank’s target of 50 million accounts by 2020 should be on track, as the McKinsey forecast, he remarked. Transactions worth Rs20.7 billion were carried out by consumers on international e-commerce websites, said the SBP.
Riaz Haq said…

McKinsey & Co 2016

For our GDP calculations, we used McKinsey’s proprietary general equilibrium
macroeconomic model, and we tested the robustness of these results with a partial
equilibrium Solow growth model. We also used our Solow model to understand specific
individual effects of different components of the model. Field research in seven large
countries covering a range of income levels and geographies—Brazil, China, Ethiopia, India,
Mexico, Nigeria, and Pakistan—informed our quantitative analysis and provided rich insights
into the conditions that must be in place to capture the value from digital finance. In addition,
we conducted more than 150 interviews around the world with a variety of experts and
stakeholders to obtain a more detailed view of the different elements we fed into our model.


The growth potential for Pakistan sits in the middle of the range at 7 percent, somewhat
below its lower-income peers, reflecting its unique circumstances. Financial inclusion in
Pakistan is extremely low—only 13 percent of adult population has a financial or mobilemoney
account today. Pakistan’s total loans outstanding to all borrowers—household,
corporate, and government—amount to only 17 percent of GDP, compared with the average
of 112 percent of GDP in emerging economies.70 This extremely underdeveloped starting
position provides significant upside potential to expand its pool of formal savings and credit,
however also incurs costs above that of lower-income peers.
Riaz Haq said…
Fintech’s silent revolution
Sarwat AhsonDecember 18, 2017

Enticed by disruptive and yet innovative technology, the financial system is reorganising itself to regain its robust health, reduce costs and make its services more efficient and affordable after the 2008 crisis. Fintech is ushering in a silent revolution.

Its outreach is expanding and it now embraces activities that can be broadly categorised into: Lending tech, Payments tech (billing/remittance), Crypto currencies (bitcoin), Wealth Management (Robo advisors), Crowd funding, Insurance and Regtech (regulations).

Pakistan’s financial sector has responded to the challenges of applying these new technologies by strengthening its human resource and developing customer interface platforms. Most banks now have Chief Innovation Officers or Digital Initiative departments.

Various online Payment Systems and Mobile Apps have been developed to encourage footfall in branches.

The demand for a swift payment mechanism is evident from the quick adaption of digitisation efforts and rising e-commerce platforms. The latest State Bank’s Annual Performance Review states that “e-Commerce is picking up with 571 merchants offering their products online. During FY2017, 1.2 million transactions valued at Rs9.4 billion were processed through e-commerce”.

The SBP report further states that “25 financial Institutions provide internet banking and 18 have mobile apps. During FY17, 25.2m internet banking transactions were processed valuing at Rs969bn. Mobile banking accounted for 7.4m transactions valuing Rs141bn, representing an annual volume growth of 32 per cent and 12pc respectively”.

Pakistan’s financial sector has responded to challenges by strengthening its human resource and developing customer interface platforms

Riaz Haq said…
By mid-2018: With Fintech, Pakistan set to dismantle barriers to branchless banking

Fintech is all set to revolutionise Pakistan’s financial sector in upcoming months as the telecom regulator is taking steps to facilitate online transactions across all mobile phone networks just like making a phone call from one network to another.

Fintech (financial technology) is an electronic platform that will enable users to make financial transactions from one platform to any account-holders on other mobile phone networks all over the country.

So far, such online transactions were not possible because of the absence of inter-operability across the telecom network.

At present, Telenor’s Easypaisa, Jazz’s Mobicash and United Bank Limited’s Omni are providing mobile-based branchless banking services. However, their customers cannot transfer money from one service to another.

In an effort to promote fintech, the Pakistan Telecommunication Authority (PTA) – the telecom regulator – has decided to award Third Party Service Providers’ licences by June or July 2018, which will pave way for inter-operability between cellular mobile operators and ramp up financial inclusion all over the country.

“We have received two applications and the Third Party Service Providers’ system is expected to be launched in mid-2018,” said the PTA spokesperson in an email response to The Express Tribune.

This innovative system will also provide access to banking services for people having simple feature phones who will be able to make online financial transactions.

The new platform will help dismantle existing barriers that prevent digital wallets (branchless bank account-holders) from sending money to different bank accounts. Users will be able to make transactions from wallet to wallet or wallet to the bank account.

This will significantly reduce hard cash transactions and stave off the threat of cash theft. The State Bank’s vision of financial inclusion will also get a boost as it aims to provide 50% of the adult population access to the legal financial system by 2020.

Adnan Khan, a retailer in Sultanabad, a low-income locality of Karachi, told The Express Tribune that he expected his business to jump 100% after the launch of fintech platform. At present, he sends back many of his clients just because all mobile banking services are not available at his outlet.

PTA insists that it is an open licensing regime and it can issue more licences as per market needs and absorption.

Licence fee for the Third Party Service Provider is Rs1 million and Rs10-million performance bond is mandatory which is associated with roll-out obligations. Other regulatory obligations like annual licence fee, which is 0.5% of gross revenue of the licensee, are applicable as per licensing conditions.

The number of mobile phone banking transactions, which stood at 1.2 million in the first quarter of 2017, increased 12% to 1.3 million in the second quarter. In terms of value, the transactions surged 24% from Rs21 billion in the first quarter to Rs26 billion in the second quarter.

With the Third Party Service Providers’ platform, more digital financial services will be available in the Pakistani market.

“The third-party framework will also be critical for the launch of Asaan Mobile Account under the National Financial Inclusion Strategy,” said the PTA spokesperson.
Riaz Haq said…
ITU, BMGF ink financial inclusion research projects

The Information Technology University (ITU) and Bill & Melinda Gates Foundation (BMGF), represented by Karandaaz Pakistan, signed an agreement for three research projects on financial inclusion. In this regard, an agreement signing ceremony was held in Lahore on Wednesday.

While speaking on the occasion, ITU Vice-Chancellor Dr Umar Saif said Pakistan’s first FinTech Centre, established at ITU, will ensure financial inclusion and make a large portion of the population a part of the economy through technology. The project will be in collaboration with BMGF.

“Pakistan is a growing economy and the gender-based financial inclusion will become part of the documented economy.”

He maintained that joining hands with international development partners like BMGF for innovation and research in financial technology was a welcome step. “We welcome partnerships with local and international entities for financial inclusion through innovative applications of technology to help Pakistan reform digital financial services, especially with the inclusion of women,” he pointed out.

Similarly, Karandaaz CEO Ali Sarfraz Hussain said, “Together with BMGF and UK’s Department of Development, we are working with various departments for financial inclusion, including National Savings, State Bank of Pakistan and Agriculture Department of Punjab with a special grant from FinTech Centre.”

BMGF Deputy Director Financial Services Jason Lamb said that the Gates Foundation focused on Pakistan among the five largest countries, including Indonesia and Algeria, India etc. “Digital technology is playing a key role in fundamental changes in services with credit availability,” he added.

Jason said that more knowledge and research would trigger greater financial inclusion of women through technology in Pakistan. “It is heartening to see academicians stepping up to work closely with the industry in solving issues. Karandaaz and ITU have partnered to make this possible,” he said.

He said that ITU’s FinTech would devise many innovations and some research projects, while three specific academic researches would improve existing knowledge on women’s use of digital financial services and the barriers they face.

He maintained the researches will help in understanding and proposing solutions to mitigate these barriers. “One of the researches will focus on viability of a mobile app to form a rotating savings and credit association of women that will help them save and borrow collectively,” Lamb said.

He said another research will help in designing a digital financial system for business and personal use of micro entrepreneur women, while the third research will focus on digital solutions to safeguard women against SMS fraud in Pakistan.
Riaz Haq said…
#Pakistani-#American founder Amir Wain of #SiliconValley #fintech #payments firm i2c expands operations to #Omaha #Nebraska

A California payments company plans to open its second North American operations center in Omaha by this summer and employ about 300 people within a year, with hiring to start next week.

The company, i2c Inc. of Redwood City, California, helps financial institutions, corporations and government agencies with credit, debit, prepaid and other payments through a cloud-based computer system called Agile Processing.

The company said Tuesday its Omaha investment would total $30 million over four years.

Much of the work will be “client facing,” servicing i2c’s clients, said Peg Johnson, a former First Data Resources executive who joined i2c a year ago and will head up the Omaha operation as executive vice president.

Johnson, a native Omahan, worked 20 years at First Data, most recently as a senior vice president running client services for one of its business lines.

“We absolutely knew that we wanted to bring these types of jobs to somewhere in the Midwest,” she said. “It’s all about the work ethic, the people’s loyalty to their employer.”

Omaha was chosen because of the city’s talent pool in the financial technology, or fintech, industry, she said.

“Omaha could not have been a better choice,” she said. “We have highly qualified, fintech-savvy personnel here.”

Omaha’s payment-related businesses include Omaha-born First Data, PayPal, Convergys and CSG Systems, all competing for many of the same people.

“I’m not worried at all,” Johnson said. “We’re going to be an employer of choice, obviously pay well. We’ll have a premier location and a premier facility.”

The company hasn’t signed a lease yet but has chosen an existing building close to bus lines and with easy access, Johnson said. She declined to reveal its location before signing a lease.

The Omaha center will expand i2c’s account management, operations and client services divisions and have a computer network operations center, similar to a center i2c opened in Montreal in 2016.

In a press release, Amir Wain, i2c’s founder and chief executive, said the Omaha center will support the privately owned company’s growth.

“Our customers’ success is our No. 1 priority, and this expansion underscores our commitment as we continue on our path to $1 billion in revenue,” he said.
Riaz Haq said…
#Cubix bags the first prize in the #Fintech Hackathon 2018 in #Karachi #Pakistan #Momentum

Thursday 8th March 2018 – Cubix ‘Kifayat’ – a solution to manage ballot committees digitally and way more conveniently – sounded spectacular to the jury.

After a long and intense period of 2 days of Hackathon, the jury – comprised of top management from Bank Alfalah, TPS and Covalent including banking executives and Fintech experts – selected CubixKifayat as the winner of Fintech Hackathon in Karachi, Pakistan. The theme of this hi-tech event was revolving around “Building interesting financial products atop the APIs provided by the Partners of the program” which may help in creating new customer experiences and revenue models by leveraging Pakistan’s digital payment ecosystem.

The Hackathon started right after the 10th Anniversary Celebrations at Cubix where the stage was set for the employees, partners and affiliates with their entire family. Many of the employees even from technical division were wrapping up the projects on tough deadline to share their milestone achievements in the event. Technical team hardly got time to breath in, entering the competition, yet Cubix with its legacy chose not to miss the opportunity and went ahead to showcase the talent. And it was an immense pleasure for the CTO of the company, Mr. Ali Sohani, to see that hard work did pay off beautifully when they not just managed to secure the position but, coming out as winners amongst all the city-wide competitors.

The Hackathon took place in Karachi at the Momentum 2018 and it was a treat to watch startups thriving to their maximum potential for funding and investments.

The participating teams were given access to multiple API’s of reputed organizations such as Bank Alfalah, TPS Worldwide and Access Group. They were tasked to innovate an idea that can solve a financial problem faced by majority of people and at the same time, proves to be beneficial for the banking industry.

Cubix Commerce responded with the CubixKifayat App, which simplifies the whole tedious procedure of managing a Ballot Committee. The app aims to manage ballot committee online while taking care of details like funds transfer and trust process involved in secure and distributed manner respectively. The app operates with connecting all of its users with a bank accounts or virtual online wallets that can be charged with EasyPaisa and JazzCash. Transfer of funds can be done via various digital payment mediums and all of the transactions will be transparent and secured. CubixKifayat aims to leverage banks and its users on a broader scale and with majority of Pakistanis using the old conventional method of managing ballot committee, this app can revolutionize the method of managing ballot committees forever.

“Earlier this year I came across an article that showcased, in Pakistan, Ballot Committees are 3rd most used channel to save money and for p2p-funding. This is where the idea of Cubix Kifayat emerged from. CubixKifayat is a solution for nearly every household in the country that yet doesn’t believe in big banks or centralized systems for the saving and lending of money.”Said CTO, Mr.Ali Sohani.

As a winner of the first ever Fintech Hackathon, Cubix Commerce has a long way to go and here is a proof of it. Bank Alfalah gave their APIs to team Cubixfor their future projects and self-learning.

Riaz Haq said…
Alipay in Pakistan?

Does Pakistan’s digital payments’ landscape finally have the breakthrough it was looking for? China’s Alipay, which has over 800 million users across multiple markets, is about to enter Pakistan. E-commerce watchers would now wish that Alipay’s founder, the Alibaba – which spun off Alipay from its e-commerce setup some years ago but still owns Alipay’s underlying technology – also follows suit soon.

Ant Financial Services, the group that owns Alipay, has made a deal to buy 45 percent of Telenor Group’s stake in the Telenor Microfinance Bank, formerly Tameer Bank, at a value of $184.5 million. This is confirmed by Telenor Group’s public statement on this subject. After building critical mass of Easypaisa users, Telenor Pakistan will do well to further scale the business with a formidable strategic partner.

Mind you, Ant is the world’s largest Fintech co. It has been focused in the past couple of years on growing its scale overseas. Though its acquisition bid for US money-transfer giant MoneyGram failed earlier this year, Ant has struck local partnerships with digital and financial players in strategic markets like Indonesia, Malaysia, the Philippines, Thailand, Singapore and South Korea.

The Telenor-Ant deal, if it goes through the local regulatory checks, is significant for Pakistan, on multiple counts.

One, the deal would bring the local Fintech market into spotlight. The market potential of some 100 million unbanked individuals is a mouth-watering prospect for Fintech players. Alipay, with its robust technology payment platform, stands a better chance to build scale, which is essential to provide low-cost digital payment services in a low-income market.

Two, it may help the online economy’s ecosystem to grow further. The online economy – which includes e-commerce as well as the gig economy – needs acceptance of digital payment solutions at the grassroots level to be able to realize its billion-dollar potential in the near term. While the cash-on-delivery payment settlement is good to build user trust early on, in the long run, digital wallets will be more efficient.

Three, Alipay’s entry in the market might force the big banks as well as branchless banking (BB) providers to wake up and smell the coffee. Local banks seem content raising CASA deposits from a small user base – now they risk losing a big chunk of the potential market to digital. As for the BB operators, they are still stuck at a collective 15-16 million active accounts, drastically lower than the potential. It is time to make serious investments in Fintech and improve the service offering

And four, Alipay’s experience in Pakistan may provide impetus to some major e-commerce FDI coming into Pakistan later. While Alipay could help revolutionize the financial side of e-commerce here, local players like Daraz, TCS and others are slowly becoming efficient at merchandising and marketing. Should Alipay find traction in Pakistan, it may convince Alibaba to make its move and find a local partner, or target.
Riaz Haq said…
How Digital Payments Revolutionized Poor Women’s Lives in Pakistan
Pakistan’s women-focused social benefits payment system shows how the use of digital technologies not only increases financial access for women, but also gives them a voice at home and in the political landscape, writes researcher Atika Kemal.

Farzana*, 45, stands with her nine-year-old daughter in the scorching heat of the southern Pakistan town of Larkana. She is waiting in a long queue to hand her mobile phone and computerized national identity card to a banking agent. Farzana visits the agent every few months to collect her quarterly welfare payment of 4,500 Pakistani Rupees ($40).

Farzana doesn’t know how to retrieve the personal identification number sent by text message to her mobile phone to notify her of payment into her account, so she hands the phone over to the agent. The agent sees the PIN and uploads it into the system to verify her personal details. He then hands Farzana her grant, asks her for a thumbprint and gives her a record of the payment.

Charagh*, 78, is a widow suffering from advanced Parkinson’s disease. She travels by bus with her 20-year-old son to the nearest ATM – located on the fringes of her remote village in Bahawalpur, Southern Punjab. The journey takes three hours there and back.

Once she’s there, Charagh unwraps an embroidered handkerchief and gives the debit card inside it to her son. She wears her identity card – her most precious asset – as a necklace. Her son, who has only attended primary school, gets the money from the ATM and gives it to his frail mother.

These are the stories of some of the 16 women I met during my research on Pakistan’s Benazir Income Support Programme (BISP) – the largest government-run social cash program run exclusively for women in southern Asia.

Every quarter, 5.4 million women from low-income households in Pakistan receive welfare payments using digital means. The use of digital tools, such as the Benazir Debit Card – which is embedded with a chip carrying the user’s information – and phone texts, is intended to make the system of receiving payments more convenient and safer for women to use.

My research shows it also has the unexpected effect of raising the status of women by granting them more decision-making powers, both within their households and in the political sphere.

When BISP was launched in 2008, welfare payments were disbursed in cash or money orders via local parliamentarians and postmen. In 2010, to improve transparency, visibility, security and efficiency in the delivery of social cash, the program shifted to electronic payments made directly into beneficiaries’ bank accounts.

Pakistan accounts for more than 100 million of the world’s 2.5 billion unbanked people. From a population of more than 190 million, only 13 percent of adults have a formal bank account, as reported by the 2014 Global Findex. Even more alarming, fewer than 5 percent of women in Pakistan are included in the formal financial sector, compared with south Asia’s average of 37 percent.

Digitizing BISP payments has had the benefit of ensuring that low-income women have access to bank accounts. For most of the women registered on the program, being enrolled was the first time they had ever had one.

To date, 94 percent of beneficiaries of BISP receive electronic payments. They provide flexibility and convenience to women, letting them cash their payments at various locations – banking agents, ATMs and point-of-sale machines ­– using a secure PIN. This eliminates the practice of some politicians or postmen demanding bribes for delivering cash payments to people’s homes.
Riaz Haq said…
SBP to increase financial inclusion of SMEs to 17pc

Assistant Chief Manager, SBP’s Banking Services Corporation, Ms. Rabia Yaqoob Khan gave a detailed presentation to the business community on financing schemes of SBP for SMEs.
Rabia Yaqoob Khan said that only six percent SMEs were currently availing loans from banks despite the fact that 40 percent of them have relationship with banks. She said that SBP has set target of increasing financial inclusion of SMEs from current 6 to 8 percent to 17 percent by 2020 so that these businesses could achieve better growth and development.
Assistant Chief Manager, SBP’s Banking Services Corporation said that SBP has launched 9 financing schemes for SMEs at 6 percent markup to facilitate them expansion and growth. She said that for this purpose, regulatory framework and taxation system would be simplified for SMEs.
She said that the incumbent government was taking keen interest in promoting SMEs and hoped that maximum SMEs should avail these schemes for fast growth and development.
In his welcome address, Senior Vice President ICCI, Muhammad Naveed Malik said that SMEs were the backbone of our economy as they constituted over 90 percent of total business enterprises in Pakistan. He said SMEs contributed 30 percent to GDP, 25 percent to exports and 78 percent to industrial employment that showed their important role in the economic development of the country.
The SVP ICCI said the tough collateral conditions of banks were the major hurdle for SMEs growth and urged that SBP should ask banks to offer soft term credit facility to SMEs that would help them to grow fast and play effective role in strengthening the economy.
Vice President ICCI Nisar Mirza said that strengthening SMEs would yield multiple benefits for the economy as it would promote trade and industrial activities, enhance exports, encourage investment, create more jobs and increase tax revenue of the government. He emphasized that government should pay special attention to promoting SMEs that would pave way for sustainable development of the economy.
Sardar Tahir, President, Islamabad Estate Agents Association, Zahid Rafiq General Secretary, Ch. Nadeem, Khalid Chaudhry, Dildar Abbasi, Muhammad Faheem Khan and others were present at the occasion.—INP
Riaz Haq said…
#Easypaisa launches QR #payment method in universities across #Pakistan inc #Lahore University of Management Sciences (LUMS), National University of Science & Technology (#NUST) in #Islamabad, FAST National University, #Karachi University. #mobilemoney

Easypaisa, Pakistan’s first digital payments platform launches “Easypaisa QR”, the first of its kind cashless payment system, in more than 137 educational institutes across Pakistan.

Some of the prominent universities where the Easypaisa QR payments systems have been successfully deployed are Lahore University of Management Sciences (LUMS), National University of Science & Technology (NUST), FAST National University, Karachi University & Punjab Group of Colleges.

With this, Easypaisa aims to be a part of the youth’s lifestyle by changing their conventional payment methods to digital and by giving the youth of Pakistan convenience in carrying out their everyday financial transactions.

Easypaisa QR not only permits students with convenience of their payments in this digital age but also rewards them with amazing discounts.

On this introduction of Easypaisa QR Payments, Shahid Mustafa, President & CEO of Telenor Microfinance Bank says,

“QR Payments are consistent with the Bank’s commitment to bring greater ease and access to our customers. We hope these payments enhance efficiency and productivity of individual users as well as businesses by simplifying the previously cumbersome payments processes.”

Easypaisa wants to take Pakistan into the future of financial technology and aims to keep the youth of this country at the center of this financial revolution.

Taking this vision forward, we at Easypaisa work tirelessly to raise the living standards of every Pakistani by bringing innovative services and products resulting in an empowered Pakistan.
Riaz Haq said…
#Pakistan's Woman-Led Startup Tez #FinTech Wins Visa Everywhere Initiative Women’s Global Edition After Worldwide Search. Tez is first fully #digital financial institution in Pakistan providing #financialservices to unbanked/underbanked via smartphone apps

The FinTech competition measured how applicants leveraged their companies’ unique ability to solve or transform consumer and/or commercial payment experiences locally, regionally or globally. The FinTech winner Tez Financial Services from Pakistan, represented by Naureen Hyat, is the first fully digital financial institution in Pakistan providing frictionless financial services to the unbanked and under-banked via a smartphone application.

“The Visa Everywhere Initiative has been a remarkable opportunity for Tez, Pakistan and our cause to enhance financial inclusion,” said Naureen Hyat, Co-founder and Business Head of Tez Financial Services. “It has not only served as a driver for growth but has also allowed us to tap into the connectivity and numerous partners at Visa. I’m honored to be a part of such a thriving group of women entrepreneurs. All of these finalists have already achieved so much – I’m excited to continue to be a witness to our growth collectively beyond this competition.”

The Social Impact Challenge sought women-led businesses around the world who are supporting sustainable and inclusive livelihoods and strengthening their local or regional economies. The Social Impact winner Green Girls Organization from Cameroon, represented by Monique Ntumngia, is a non-governmental organization that trains women and girls to harvest and create renewable energy from the sun and bio-waste.

“This opportunity will allow Green Girls to reach more women and girls and expand our footprint to provide renewable energy,” said Monique Ntumngia, Founder of Green Girls Organization. “Visa’s network and support will not only help my organization scale but will provide a number of rural African communities sustainable energy sources from the sun and bio-waste – creating a ripple effect of impact.”

In addition to Green Girls and Tez, the following entrepreneurs competed for the two top prizes:

FinTech Finalists:

WeCashUp of France, represented by Annicelle Kungne, is the largest Pan African payment gateway that enables eCommerce companies to accept mobile money, cash and cards online in 36 African countries.
Papaya Global of Europe, represented by Eynat Guez, is a SaaS platform that supports total workforce management (payroll, PEO, and contractor management) along with benefits and a full cross-border payments solution in over 100 countries.
DinDin of Latin America, represented by St├ęphanie Fleury, provides basic financial services to the unbanked and underbanked individuals and businesses in Brazil, through their app, web-based internet banking and API platforms. Their goal is to promote financial inclusion to more than 115 million people through their B2B2C financial ecosystem.
PoshVine of Asia Pacific, represented by Garima Satija, helps financial services organizations increase customer loyalty and share of spends through contextual, personalized perks and rewards administration. They are building a coalition customer loyalty program through their network of more than 15,000 merchant partners whereby users can earn and easily redeem points using linked debit or credit cards.
Alloy of North America, represented by Laura Spiekerman, provides real-time identity and risk decisioning for financial services, including KYC/AML and fraud checks.
Riaz Haq said…
Meet the Investor Who Spots Opportunities for Jeffrey Katzenberg
Anthony Saleh oversees a growing venture-capital fund at the former Hollywood chief’s WndrCo, after its Quibi video app collapsed. He also works with the rapper Nas.

While working with Nas several years ago, Mr. Saleh cold-emailed Ben Horowitz, the co-founder of the venture-capital firm Andreessen Horowitz to discuss ideas, Mr. Horowitz said. The two men got to know one another, and in 2013, Mr. Saleh called Mr. Horowitz to say he and Nas were interested in bitcoin after seeing how many “unbanked” people in the world had no checking account but did have a cellphone—a dynamic he said could decentralize finance. When Mr. Horowitz later heard about Coinbase, the cryptocurrency exchange platform, he brought the duo into the investment.

Last year, Coinbase Global Inc. was one of six investments in Mr. Saleh’s personal portfolio that ended in a public offering.
Riaz Haq said…
NADRA Launches Digital Payment System to Replace ATM

NADRA (National Database and Registration Authority) just recently announced the arrival of its new e-payment system which is proclaimed as the final blow to ATM usage around the country. Claimed to be the replacement for ATMs, the e-payment solution will allow users to make easy electronic payments.

Alongside NADRA, 1Link also played an important role in building the e-payment solution. Once widely in use, this will be Pakistan’s biggest and most fully accredited payment gateway system. NADRA adds this new venture into its already successful catalog of solutions named as ‘e-sahulat’.

With the launch, NADRA will start its mission of transforming over 17,000 e-Sahulat locations into full-featured ATMs. These locations will then also provide users with a number of different online payment options.

NADRA Chairman Tariq Malik and 1Link CEO Najeeb Agrawal signed the contract on Monday. Chairman Malik on the occasion said that NADRA for a long time has been trying to enhance its e-governance services by empowering organizations from both the public and private sectors.

““We are enhancing state capacity to deliver digital public goods and move towards electronic financial transactions for transparency and accountability. This would enable financial inclusion as well.” said Malik about the new e-payment solution.

Malik in his speech also claimed for NADRA’s e-sahulat is the most cutting-edge digital service for financial payments. Now with an e-payment solution coming into play, around 17,000 NADRA e-sahulat centers will be able to quadruple their capacity.

According to NADRA, we will soon see the e-payment platform in rural areas of Pakistan as well. Now, this is a great initiative since it will allow ease of business and increase rural contribution to the digital economy.

Riaz Haq said…
VEON Subsidiary Pushes Digital Inclusion in Pakistan

Tommy Clift | Reporter

Mobilink Microfinance Bank (MMBL) launched a trio of initiatives to accelerate financial inclusion for farmers and female entrepreneurs in Pakistan. The move echoes another by its parent company VEON to promote digital access through its subsidiary Kyvistar.

The MMBL plans include an agriculture advisory service for Pakistani farmers, e-commerce services for female entrepreneurs, and 4G handsets. VEON CEO Kaan Terzioglu believes the initiatives will play a pivotal role in digitalizing the microfinance industry in Pakistan.

VEON noted in a statement that agriculture represents nearly 23% of Pakistan’s gross domestic product and employs approximately 37% of its workforce. Recent floods in the country destroyed 3.6 million acres of crops and killed 700,000 livestock, it added.

MMBL is partnering with Pakistan-based agricultural technology company BaKhabar Kissan to provide information and guidance on livestock management, weather monitoring, crop planting – including which are profitable, and boosting agricultural yields.

“We are aiming to build a digital infrastructure that will help further economic prosperity and financial empowerment among women business owners and small and medium-sized farmers in the country, two segments that have the potential to transform Pakistan’s economic future,” MMBL President and CEO Ghazanfar Azzam stated.

Their push to incentivize and advance female entrepreneurs comes with their collaboration with Pakistan e-commerce platforms Daraz and its flagship Women Inspirational Network (WIN) program. This is intend to promote a female-focused, “digital financial ecosystem” using their subscriber base – currently accounting for 53% of the 195 million cellular subscribers in Pakistan, according to VEON.

Women make up nearly half of the country’s population, but VEON notes “their financial inclusion figure stands at 7%.”

The new program will use the Digit 4G handsets to “drive participation in the digital economy among marginalized groups within the population.” The handsets will be discounted and targeted at female entrepreneurs, coming “pre-loaded with the digital banking application, MMBL DOST, which will enable customers to obtain quick financial assistance, pay bills, make money transfers, and use a vast array of digital banking services,” VEON explained.
Riaz Haq said…
Investors, including HBL, participate in Finja’s Series A2 Funding Round
Finja, Pakistan’s largest dual-licensed SME digital lending platform, announced fresh capital injection as part of its $10 Million Series A2 financing round, with participation from notable investors including Sturgeon Capital and HBL.

Finja, Pakistan’s largest dual-licensed SME digital lending platform, announced fresh capital injection as part of its $10 Million Series A2 financing round, with participation from notable investors including Sturgeon Capital and HBL. This investment round is multi-dimensional and includes equity, debt, and off-balance sheet capital. This is HBL’s second investment in Finja after its initial participation in the company’s Series A1 round.

With this injection, Finja has the capacity to finance more than $50 million over the next 12 months to catalyze the potential of Pakistan’s SME sector. This has set the stage to further scale Finja’s existing digital co-lending program to support its overall vision of empowering Micro, Small and Medium Enterprises (MSMEs) and their supply chains with digital credit.

This financing is a significant step towards more fully utilizing Finja’s credit engine, which continues to prove its scalability and accuracy, cementing Finja as the sustainable choice for SMEs throughout Pakistan.

Qasif Shahid, Co-Founder Finja remarked, “The future of the financial services industry lies in collaboration between fintechs and banks. Moving away from vertical silos to open banking systems and embedded finance. This puts Finja in a winning position as it ramps up our capability to offer small and micro businesses digital products.” He further added, “With this new injection and our laser focus on optimizing our organization, we will now be turbo charging digital lending to SMEs through our association with HBL”

Finja today has emerged as one of the leading digital lending platforms in the country clocking a total lending throughput of PKR 7 Billion at the back of extending approximately 150,000 loans to 35,000 Karyana stores in 30+ cities. Finja also works closely with FMCG distributors and helps them to buy supplies upstream on credit and also provides purpose built working capital lending lines to SMEs scored through Finja’s proprietary AI/ML algorithms.

Kamran Zuberi, CEO Finja Lending Services, remarked that Finja is the first financial services entity to package capital in small amounts of PKR 50,000 and for periods of 7, 14 and 30 days to Karyana stores for availing credit to buy supplies and improve their sales. “We score these retailers from data that we get from our partnerships with multiple FMCG principles, hundreds of distributors and new-age market aggregators that operate mobile apps for small retailers to order supplies from.”

Riaz Haq said…
Waada Buys Rival to Become Pakistan’s Top Insurance-Tech Startup
Pakistan’s insurance penetration is 0.7%, trailing neighbors
Nation to see further consolidation as funding slows: investor

Waada becomes largest technology led insurance start-up in Pakistan - 24/7 News

Pakistani online insurance startup Waada acquired a local rival to create the South Asian nation’s largest player in the field, seeking to benefit from growth in the burgeoning market.

The Karachi-based company took over MicroEnsure Pakistan, a unit of MIC Global operating in South Asia and Africa, in an all-stock deal, according to a statement Friday. The brands combined have 1.5 million active customers, Waada said, without disclosing the deal value. Waada also said it’s closed a seed round of $1.3 million from local angel investors and foreign venture capital firms.

Pakistani online insurance startup Waada acquired a local rival to create the South Asian nation’s largest player in the field, seeking to benefit from growth in the burgeoning market.

The Karachi-based company took over MicroEnsure Pakistan, a unit of MIC Global operating in South Asia and Africa, in an all-stock deal, according to a statement Friday. The brands combined have 1.5 million active customers, Waada said, without disclosing the deal value. Waada also said it’s closed a seed round of $1.3 million from local angel investors and foreign venture capital firms.


Waada, The Insurance start-up has announce that the company has become the largest player among all technology-led start-ups in the country’s insurance segment after acquiring its rival company MicroEnsure Pakistan.

The Announcement was made on the startup’s Social media handle LinkedIn, In the announcement, it has been confirmed that deal has been locked however, company has not disclosed the details of the deal yet.

Separately, the company also announced a $1.3 million seed funding round. According to international news agency, the all-stock deal will bring the number of active customers of Wada to 1.5 million. “Waada aims to add customers using online sign-ups and has a goal to distribute 10m policies in three to five years,” it said.
Riaz Haq said…
Pakistan:Insurance market grows by nearly 22% in 2021

The insurance industry posted gross annual premium of PKR432bn ($1.9bn) in 2021, 21.7% higher than the PKR355bn chalked up in 2020, according to data compiled by the Securities and Exchange Commission of Pakistan (SECP).


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Riaz Haq said…
Insurance grows 22pc but penetration remains minuscule

The insurance sector grew nearly 22 per cent last year even though its penetration — the ratio of premiums to GDP — stayed at a paltry 0.91pc, a new report showed on Friday.

‘The Insurance Industry Statistics for 2021,’ the Securities and Exchange Commission of Pakistan’s (SECP) first report on the sector, said gross premiums jumped to Rs432 billion in 2021 from Rs355bn a year ago, a growth of 21.7pc.

The size of paid claims rose from Rs170bn to Rs189bn, of which Rs136bn was paid by life insurance and Rs53bn by non-life insurance companies.

The number of policies stood at Rs10.1 million by the end of 2021, including 8m in the life insurance and family takaful segment and 2.1m in the non-life insurance and window takaful segment.

Insurance density — the ratio of gross premiums to the country’s population — stood at Rs2,084, the report said.

As of Dec 31, 2021, the insurance industry had 41 active operators, including 30 non-life insurers/general takaful operators, 10 life insurers/family takaful operators and one reinsurer.

The number of complaints also jumped, the report showed, as the sector received 10,297 complaints in 2021 compared to 8,254 a year ago. However, it also disposed of more complaints: 10,182 vs 8,086.

Of the total gross premiums of the non-life industry, 56pc came from Sindh, followed by 35pc from by Punjab, 7pc from Islamabad, whereas Balochistan, KP, GB and AJK each had a share of less than one per cent.

“As the data clearly demonstrates, Pakistan’s insurance market holds enormous untapped potential for growth,” SECP Commis­s­ioner Sadia Khan said in her remarks in the report.
Riaz Haq said…
Pakistan’s Agriculture-focused Fintech Digit++ Obtains Approval from State Bank

The State Bank of Pakistan (SBP), the nation’s central bank, has reportedly granted approval to the test launch of the country’s very first agriculture-focused Fintech platform, Digitt+ (providing an Electronic Money Institution or EMI permit).

Digitt+ is supported by Akhtar Fuiou Technologies (AFT), the firm revealed this past Friday.

According to the firm, the aim of this agri-Fintech app is to fully digitize the agricultural ecosystem, enable greater financial inclusion for local farmers and unbanked consumers via its tech, partnership, relationship with agri-businesses and FMCGs operating in Pakistan.

As reported by local sources, Digitt+ has teamed up with FuiouPay, an international payment solutions provider, in order to offer a market-based alternative to the traditional banking system.

As explained in the announcement, FuiouPay provides holistic enabling solutions via their 75 intellectual property licenses and proprietary software solutions.

Qasim Akhtar Khan, Founder and Chief Strategy Officer at Digitt+, noted that the firm will offer financial technology solutions to farmers residing in the country, who will have the option to open bank accounts and also gain access to credit and digital financial services – including easy bill payments, digital commerce, investments as well as fund transfers.

As noted in the update, the approval from the State Bank of Pakistan is a key milestone.

This ongoing initiative has the potential to address persistent food security issues, significantly improve yields and enhance human welfare in Pakistan, directly affecting local farmers and merchants, he stated.

Notably, Pakistan has been a significant agriculture powerhouse for many years. Agriculture employs around 50% of the nation’s workforce and also contributes approximately 25% to the GDP.

While this is considerable, the industry doesn’t have adequate access to financial services from the banking sector.

Ahmed Saleemi, CEO of Digitt+ explained that using tech to create digital financial products focusing on micro services to build a platform that should support the delivery of these solutions for the retail Agri market and corporate sector can be achieved via the provision of business tools.
Riaz Haq said…
State Bank of Pakistan issues NOCs to five applicants for establishing digital bank

Central bank expects after commencement of operations, digital banks will promote financial inclusion by providing affordable/cost effective digital financial services to unserved and underserved segments

The State Bank of Pakistan (SBP) on Friday said that it has issued no-objection certificates (NOC) to five applicants for establishing digital banks in the country.

The following are the ones issued the NOC:

I) Easy Paisa DB (Telenor Pakistan B.V & Ali Pay Holding Ltd.),

II) Hugo Bank (Getz Bros & Co., Atlas Consolidated Pte. Ltd. and M & P Pakistan Pvt. Ltd.);

III) KT Bank (Kuda Technologies Ltd., Fatima Fertilizer Ltd. and City School Pvt. Ltd.);

IV) Mashreq Bank (Mashreq Bank UAE); and

V) Raqami (Kuwait Investment Authority through – PKIC and Enertech Holding Co.)

In January 2022, the SBP introduced a licensing and regulatory framework for digital banks.

“The Framework was the first step towards introducing full-fledged digital banks in Pakistan. The digital banks are expected to provide all the banking services through digital means without any need for their customers to visit the bank branches physically,” said the SBP.

Race to digital banking – final round

In response to SBP’s Licensing and Regulatory Framework for digital banks, the central bank received twenty (20) applications from a diverse range of interested players such as commercial banks, microfinance banks, electronic money institutions and Fintech firms by March 31, 2022.

“Further, a number of foreign players including venture capital firms already operating in the digital banking space also expressed their interest to venture into Pakistani market directly or in collaboration with local partners. The five (05) applicants were selected after a thorough and rigorous assessment process as per the requirements of the Framework.

Bank Alfalah launches QR payment solution with SnapRetail

“Applicants were assessed on various parameters that included fitness and propriety, experience and financial strength; business plan; implementation plan; funding and capital plan; IT and cybersecurity strategy and outsourcing arrangements, etc. Further, all the applicants were given the opportunity to present their business case to SBP.

“Going forward, each of these five applicants will incorporate a public limited company with the Securities and Exchange Commission of Pakistan. Afterwards, they will approach SBP for In-Principle Approval for demonstrating operational readiness and for commencement of operations under the pilot phase. Subsequently, they will commercially launch their operations after obtaining SBP’s approval.”

The SBP said it expects that after commencement of their operations, these digital banks will promote financial inclusion by providing affordable/cost effective digital financial services including credit access to unserved and underserved segments of the society.
Riaz Haq said…
Financial inclusion in Pakistan increases to 30% - Profit by Pakistan Today

KARACHI: Financial inclusion in Pakistan has increased by 9 basis points from 2020 to 2022 and women’s access, specifically has hit a double-digit percentage for the first time, as recorded by a survey conducted by Karandaaz Pakistan.

As defined by the World Bank, “financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.” This means conducting transactions through banks, mobile money and fintech.

The Karandaaz Financial Inclusion Survey (K-FIS) measures the percentage of adults above the age of 15 who report having at least one account in their name with an institution that offers a full range of financial services that is also documented by the government of Pakistan.

Following a significant jump in financial inclusion between 2017 and 2020, K-FIS recorded a substantial rise in the level of financial inclusion from 21% in 2020 to 30% of adults in 2022. Registered mobile money users more than doubled with an increase from 9% to 19%, while registered bank users also increased by 4 basis points over the same period.

By region, Islamabad Capital Territory (ICT) recorded the highest level of financial inclusion at 45%, followed by Gilgit Baltistan at 35% and Azad Jammu & Kashmir at 34%.

Looking at the division by gender, male registration accounted for the bulk of financial account registrations in 2022 with 47% having at least one registered financial account. Comparatively, only 13% of women are recorded to have at least one registered financial account. Although women’s percentage accounts for less than half of their male counterparts, the financial account registration for women has reached double digits for the first time.

Overall, the largest increase was seen in mobile money wallet users, as active usage increased from 8% in 2020 to 16% in 2022. Active usage also saw an increase in bank account holders, indicating an increase from 12% in 2020 to 14% in 2022.

Addressing the webinar held by Karandaaz Pakistan on February 7, 2023, Noor Ahmed, Director of the Agri Finance and Financial Inclusion Department of the State Bank of Pakistan (SBP) said, “Over the years, there has been significant progress on financial inclusion. Key initiatives such as RAAST have been transformative in furthering the inclusion of the marginalised.”

Karandaaz Pakistan is a not-for-profit special-purpose vehicle set up under Section 42 in August 2014. The company is the implementation partner of the Enterprise and Asset Growth Programme (EAGR) and Sustainable Energy and Economic Development (SEED) programme of the UK’s Foreign, Commonwealth & Development Office (FCDO).
Riaz Haq said…
Ammar Khan
Not everyone is registered with NADRA. 9% of males, and 24% of females are NOT registered with NADRA. Only one-third of children are registered.


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