 |
| Source: Brookings' Digital and Financial Inclusion Report 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 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.
Easypaisa:
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.
Karandaaz:
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.
Summary:
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
54 comments:
Brof sb,
India is ranked higher at #12, inadvertently perhaps you have failed to point it out.
Also we havent heard from you on the lastest Ease of Doing Business rankings by WB. Looking forward to it.
Regards
Yes, Brof Sb. It is always about India. How dare you said something positive about Pakistan and not about India. Your positive news about Pakistan does not sit well with the most inferiority complexed people of the world.
G. Ali
Gearing up FinTech for wider financial inclusion
Published in Jul-Aug 2017
By Anusha Zahid
How financial technology startups (FinTechs) are transforming the financial services industry globally.
http://aurora.dawn.com/news/1142117
The trend is now catching on in Pakistan.
This year two organisations, Habib Bank Limited (HBL) and Karandaaz Pakistan held their FinTech challenges with two separate objectives. HBL launched their ‘Innovation Challenge’ in May to find potential start-ups to bring in new and efficient financial solutions and ideas to their financial system, and Karandaaz Pakistan (a not-for-profit organisation) ran its second round of Financial Disruptive Challenge (FDC), in partnership with the IBA AMAN Centre for Entrepreneurial Development to promote financial inclusion in Pakistan.
Giving details about the HBL Innovation Challenge, Abrar A. Mir, Innovation and Financial Inclusion Officer, HBL, says the bank realises the importance of engaging with the entrepreneurial ecosystem to develop new solutions, and in order to reach out to the start-up community and source new solutions, it ran the Innovation Challenge. “If the ideas are interesting, we will induct the teams and ask them to develop those ideas at HBL.” In this way, he adds, the bank will not only benefit from innovative solutions, but will also solve one of the biggest challenges for any start-up: finding their first customer.
-------
“With the help of FinTechs and our existing data, we want to develop solutions to predict when customers need a car or a house loan, when their children are going to college or if they need financial help,” says Mir.
Applications were submitted via the HBL Innovation Challenge website. Mir says the response was encouraging as they received more than 60 proposals (including a few from entities outside Pakistan). After selection and grading by the panel of members from the HBL management, nine teams were shortlisted for the final held on May 23 this year. Three winners were announced. The first was LFD Default Prediction Algorithm; a team of young scientists who work on big data solutions. They developed algorithms for HBL to determine credit worthiness of existing and prospective customers. The solution will help HBL classify borrowers and gauge an individual’s willingness or ability to repay a credit or a loan. The second winner was Faceoff; a team of four software engineers with expertise in artificial intelligence. Faceoff brought solutions specialising in facial recognition to verify customers, reduce fraud and provide more secure services. The third was Wukla/Paksign; an online portal founded by three lawyers who provide digital legal services. The team developed solutions to sign legal documents digitally. These solutions help verify financial transactions made online.
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
https://asia.nikkei.com/Politics-Economy/Economy/Asia-ripe-for-Islamic-finance-as-fintech-comes-to-the-fore
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.
THE 2017 BROOKINGS
FINANCIAL AND DIGITAL
INCLUSION PROJECT
REPORT
Building a secure and inclusive
global financial ecosystem
BY ROBIN J. LEWIS,
JOHN D. VILLASENOR, AND
DARRELL M. WEST
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
https://www.brookings.edu/wp-content/uploads/2017/08/fdip_20170831_project_report.pdf
State Bank of #Pakistan: #Pakistanis fast adopting #digital financial transactions - The Express Tribune #fintech
https://tribune.com.pk/story/1550223/2-pakistanis-fast-adopting-digital-transactions/
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.
GAli bhai,
It is always about India. How dare you said something positive about Pakistan and not about India.
Brof sb himself started this trend about bringing in India on every Pakistan related achievement, especially if Pakistan was ahead of India in that achievement.
Brof sb,
World Bank's latest gender gap report is out. Any thoughts on that, sir.
Regards
Majumdar: "India is ranked higher at #12, inadvertently perhaps you have failed to point it out."
Yes. India's score of 72% is only slightly higher than Pakistan's 69%. This is in spite of all of Modi's hype about India going cashless after disastrous demonetization and all the talk of "Digital India".
https://www.brookings.edu/wp-content/uploads/2017/08/fdip_20170831_project_report.pdf
the 5 Major Trends that will completely transform Pakistan’s Financial Sector by as early as 2020.
1) Data: The New Currency of Knowledge Economy
Institutions must realize that we are living in the knowledge economy where data is the key monetary asset. Data and analytics, especially in the realm of financial services, will form the foundation for prudent investing decisions. This transition has already arrived in developed markets and it is high-time for financial institutions in Pakistan to develop a data-driven approach towards investing. We, at Investors Lounge, run one of the largest financial data centers in Pakistan and collaborate with institutions to make financial data meaningful.
2) Online Payments – Not a Problem!
An exciting era of e-commerce is at our doorstep. With the Alibaba Group and other e-commerce/payment solution companies entering Pakistan, the dream of ‘Single click checkout’ would soon be a reality. Are banks and financial institutions ready to play their part? Perhaps not yet. There seems to be an agreement on value dulled by the fear of accepting change. However, a handful of them have started to gear up for this transition. Banks like UBL and HBL have started to collaborate with Fintech companies and these collaborations need to be enhanced for a delightful ‘Online buying’ experience.
Data is the new currency of knowledge economy. Using data-driven solutions, financial institutions around the world are making finance digital and autonomous. Pakistan will slowly but gradually catch up with the world. We, at Investors Lounge, work with financial institutions to develop investing solutions using data-driven models. Financial institutions are collaborating with us to develop intelligent investing solutions for investors.
3) Leveraging the ‘Fintech’ Nexus for Customer Acquisition and Servicing
Indian Banks are no more at loggerheads with Financial Technology Companies. They are now partners! They have captured millions of customers through integrating their banking solutions with fintech companies who provide insurance, crowdfunding, e-commerce, and investment solutions. Some institutions have even invested in fintech to align themselves with the future wave of innovation. We will see some breakthroughs in this direction here in Pakistan. From Investor Lounge’s experience integrating data services with financial institutions, we feel that the biggest bottlenecks in this transition are conservativism and regulatory compliance.
4) AI and Machine Learning for Financial Decisions
The future of finance is digital and autonomous. Data-driven intelligent systems are not only user friendly, but also reduce the cost and increase the quality of financial advice. For example, Goldman Sachs uses AI to analyze massive chunks of data to see how weather, news and events can impact financial markets. Almost 40% of American hedge funds launched way back in 2015 used AI for investment decision making and they continue to use technology since it has allowed them to outperform other funds. However, Pakistani financial institutions are not just there yet.
5) Development of Capital Markets at the Highest Pace in Pakistan’s History
A lot is happening in Pakistani financial markets which requires appreciation. Pakistan has been included in MSCI Emerging Markets, Chinese Investors are all set to take majority stake in Pakistan Stock Exchange. What does it mean? To say the least, we foresee a full-fledged Futures Exchange to be introduced in Pakistan. For SME Financing; SME Exchange has been conceived; and we will see startups and SMEs getting listed on the exchange in coming years. Investor base can be doubled with the inclusion of Chinese investors in local markets and a proper investor education drive. Investors Lounge is already working with key institutions to raise investor education by leveraging on technology. To conclude, both depth and breadth of financial markets will increase in coming years at the highest pace in the history.
Bank of #China (BoC) is 2nd Chinese bank to open in #Pakistan after Industrial and Commercial Bank of China (ICBC)
http://www.business-standard.com/article/news-ani/bank-of-china-becomes-operational-in-pakistan-117110701224_1.html
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.
#Pakistan to issue Islamic & conventional #bonds to borrow $2 billion to bolster reserves amid widening deficits
http://www.gulf-times.com/story/570314/Pakistan-said-to-appoint-banks-for-2bn-bond-sale
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.
#Broadband users in #Pakistan cross 48.13 million • Dispatch News Desk #3g #4g #smartphones
https://dnd.com.pk/broadband-users-in-pakistan-cross-48-13-million/135221
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.
11 Fintech Startups from Pakistan You Need to Know About in 2017
https://www.techflier.com/2017/08/04/11-fintech-startups-from-pakistan-you-need-to-know-about-in-2017/
According to the World Bank, half of Pakistan’s population do not have access to the most fundamental banking and financial services. The arrival of Pakistani fintech startups catering to average consumers has effectively bridged this gap, enabling local “unbankable” citizens to enjoy the conveniences of modern banking and finance—while allowing for more productive and efficient digital financial services.
AbacusConsulting
AbacusConsulting was founded as a management consulting firm—but has evolved into one of Pakistan’s premier business solutions providers. The company specializes in developing finance-related business solutions for business and organizations large and small.
Finja
Finja was founded by tech and banking industry veterans in efforts to produce innovative financial services accessed via digital ecosystems. Its SimSim solution is Pakistan’s first payment solution for free and frictionless payments in real-time.
Inov8
Inov8 is widely regarded as the fastest growing digital payments company in the region. The company collaborates with Easypaisa to connect its vast distribution network to all commercial banks that have adopted Inov8’s technology; additionally, it recently signed up Telenor Microfinance Bank’s mobile money platform to its platform.
KarloCompare
KarloCompare’s web and mobile app allows users to compare a large range of credit card, personal/auto loan, travel insurance, and broadband offers with a few clicks/swipes. The startup has been featured by Techinasia, E27, Yahoo! News, and Propakistani, among others.
OneLoad
OneLoad’s platform allows users to top up their mobile accounts easily through its streamlined mobile app and web portal. Retailers can top up mobile numbers from any mobile phone operator, allowing for a unified mobile billing experience for customers and a single universal mobile usage balance.
Red Buffer
Red Buffer specializes in developing data science services, cloud and mobile apps, and machine learning/natural language processing (ML/NLP) applications. The company focuses in particular on NLP for domains like legal, finance and e-commerce.
Stocksfm
Stocksfm has created the first transparent social investment network focused on emerging markets. The company created the $ticker tag to compile and organize streams of information around stocks and markets, across internet and social media websites. This innovative “stream” concept provides insights and ideas used by investors, media analysts, and others as they research and manage their financial investments.
Monet
Monet is a card and payment services provider aimed at digitizing payments in cash-based economies. The startup was the winner of the Grand Challenges Explorations, an initiative funded by the Bill and Melinda Gates Foundation.
TPS
TPS develops solutions for prepaid mobile card and card management channels, payment issuing, billing payment gateway integration, and more. The company is trusted by over 120 customers in over 30 countries across the globe.
Payload
Incubated at Plan9, Payload has developed an easy-to-use technology that allows businesses to accept bitcoin payments while only handling Pakistani Rupees. Check out our coverage of Payload in last year’s 15 Tech Startups in Pakistan You Need to Know About.
Fintech may have taken the world by storm, but in Pakistan, various roadblocks must be surpassed before digital solutions are accepted into the local banking and finance mainstream. Despite the challenges, these 11 innovators are leading the charge to bring fintech to Pakistan’s masses; be sure to keep them on your radar in 2017 and beyond.
THE EXPRESS TRIBUNE > BUSINESS
Alibaba in talks to buy big stake in Telenor Bank
By Salman Siddiqui Published: September 21, 2017
https://tribune.com.pk/story/1511954/alibaba-talks-buy-big-stake-telenor-bank/
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.
THE EXPRESS TRIBUNE > BUSINESS Alibaba in talks to buy big stake in Telenor BankSHARE TWEET
Alibaba in talks to buy big stake in Telenor Bank
By Salman SiddiquiPublished: September 21, 2017
112
SHARES
SHARE TWEET EMAIL
A sign of Alibaba Group. PHOTO: REUTERS
A sign of Alibaba Group. PHOTO: REUTERS
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.
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.
THE EXPRESS TRIBUNE > BUSINESS
Alibaba in talks to buy big stake in Telenor Bank
By Salman Siddiqui Published: September 21, 2017
https://tribune.com.pk/story/1511954/alibaba-talks-buy-big-stake-telenor-bank/
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. “Daraz.com 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.
This is why you need to know about trade finance
https://www.weforum.org/agenda/2017/10/trade-finance-what-to-know/
We are talking about a financing mechanism that is essential to bridge the time lag between a product’s shipment from one market and its arrival and inspection in another. Reducing this delay helps build trust and minimizes many of the risks arising from such complex transactions, such as a lack of timely payment, exchange rates and the deterioration or loss of goods and services.
Trade finance likes to manifest itself in the form of letters of credit, guarantees or insurance and is usually provided by intermediaries, such as banks or financial institutions. One of its most current forms involves bank-to-bank transactions, where one bank provides an account and related services to another in a relationship is called correspondent banking.
According to an Asian Development Bank Institute paper, adequate and reliable trade finance creates exports opportunities: “[I]t enables firms which would otherwise be considered too risky, to link into expanding global value chains and thus contribute to employment and productivity growth”. Trade is no longer just for the big boys.
-----------------
FinTech solutions could potentially solve some of the transparency and risk-related processes and transaction costs, as well as fees, associated with banks’ due diligence checks by providing trusted platforms to connect seekers and providers of funding, rather than piles of paperwork.
The good news is that some initiatives are emerging. For example, some FinTech firms in the US and Singapore are starting to offer web-based platforms allowing users to post assets for distribution, negotiate deals, and manage supporting documentation.
FinTech solutions could finally find their niche in the finance sector and kill two birds with one stone. On the one hand, they could allow for the development of innovative start-ups that have been in the shadows for too long while creating new opportunities to link up with markets; on the other hand, they could offer an easier and cheaper way to access finance through a user-friendly platform that’s accessible by phone. Our Burmese entrepreneur would certainly find it easier to buy a phone than to open a bank account.
Now take off your rose-tinted glasses for a minute and feel that bittersweet taste in your mouth. Every joy has a dark side. Given the nascent nature of FinTech, regulatory frameworks are still uncertain and concerns related to intellectual property and data protection are yet to emerge. This may prevent some companies from adopting these solutions and being able to see the benefits, which include security, risk and cost reductions, and speed, to name but a few.
135 Million Millennials Drive World's Fastest Retail Market
Middle class expected to surpass U.K., Italy over 2016-21
By
Faseeh Mangi
September 28, 2017, 1:00 PM PDT
From
Nearly two-thirds of Pakistan population under 30 years old
Pakistan’s retail stores forecast to grow by 50% in 5 years
Pakistan’s burgeoning youth and their freewheeling attitude toward rising incomes have turned the nation into the world's fastest growing retail market.
The market is predicted to expand 8.2 percent per annum through 2016-2021 as disposable income has doubled since 2010, according to research group Euromonitor International. The size of the middle class is estimated to surpass that of the U.K. and Italy in the forecast period, it said.
Pakistan's improving security environment, economic expansion at near 5 percent and cheap consumer prices are driving shoppers to spend up big. Almost two-thirds of the nation's 207.8 million people are aged under 30, according to the Jinnah Institute, an Islamabad-based think tank.
“We have a new millennial shopper at hand. They don’t mind spending to have the kind of lifestyle they would like,” said Shabori Das, senior research analyst at Euromonitor. “It’s not like the Baby Boomer generation where savings for the future generation was important.”
Pakistan is bucking the trend in the U.S. -- where stores are closing at a record pace as e-commerce undermines bricks-and-mortar. It's also attracting foreign operators: Turkish home appliance maker Arcelik AS and Dutch dairy giant Royal FrieslandCampina NV entered the market last year via acquisitions. Meanwhile, Hyundai Motor Co., Kia Motors Corp. and Renault SA are all building plants in the South Asian nation.
Pakistan’s retail stores are expected to increase by 50 percent to 1 million outlets in the five years through 2021, Euromonitor said. Its three biggest malls, Lucky One in Karachi and Packages Mall and Emporium Mall in Lahore, opened in the past two years.
Pakistan is mirroring what India went through about four years ago. Both countries have young populations with more income and less inclination toward saving which is a distinct difference to what retailers elsewhere are dealing with, said Das.
https://www.bloomberg.com/news/articles/2017-09-28/135-million-millennials-drive-world-s-fastest-retail-market
#Pakistan on road towards #DigitalEconomy. #fintech #smartphones #3G #4G https://nation.com.pk/24-Jan-2018/pakistan-on-road-towards-digital-economy?show=blocks
Talking specifically about Pakistan, according to World Bank, about 100 million adults in Pakistan don’t have access to formal and regulated financial services. This number is approximately 5% of the world’s entire “unbanked” population, which currently stands at 2 billion. Despite of this, there is one huge positive aspect that Pakistan leads in digital finance and branchless banking in South Asia as 6% of adults have mobile accounts compared to South Asia’s average of 2.6%. This shows that Pakistani consumers are ready to accept the new technology.
The acceptance of new technological platforms is evident from the fact that Pakistani banking industry that started back in 1947 touched figure of 40 million bank accounts in the year 2016 whereas it took branchless banking only five years to reach 17 million accounts. There is also a forecast that in few more years this figure would reach 20 to 30 million. This growth was possible due to the increase in the mobile phone subscribers in Pakistan.
With the introduction of National Financial Inclusion Strategy (NFIS) launched in 2015, now almost all banks have introduced their official banking apps. These apps allow users to perform basic banking operations like checking balance, transfer of funds, payment of utility bills etc. All these transactions are done over a safe and secure network and secondly the issue of mobility (mentioned earlier) has also been solved as all transactions can be done with a touch of few buttons right from home.
Now banks and financial corporations should further try to promote and educate their account holders so that they can get maximum benefit from the facilities available through branchless and mobile banking. Moreover, products like Telenor Easypaisa, SimSim Mobile Wallet, and Jazz Cash are disrupting the normal day to day financial processes in the country serving almost every part of the society particularly the unbanked population.
Economy is the backbone of all kinds of development process thus the amalgamation of technology with finance is the step in the right direction. Now to further utilise this FinTech phenomenon, it is mandatory for the relevant authorities to promote the products among the masses.
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
http://gulfnews.com/business/sectors/banking/bahrain-s-ithmaar-bank-plans-aggressive-expansion-in-pakistan-1.2164818
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.
THE EXPRESS TRIBUNE > BUSINESS
Three players to enter Pakistan’s online payments space
https://tribune.com.pk/story/1615482/2-three-players-enter-pakistans-online-payments-space/
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.
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.
https://tribune.com.pk/story/1615482/2-three-players-enter-pakistans-online-payments-space/
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.
DIGITAL FINANCE FOR ALL:
POWERING INCLUSIVE GROWTH
IN EMERGING ECONOMIES
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.
https://www.mckinsey.com/~/media/McKinsey/Global%20Themes/Employment%20and%20Growth/How%20digital%20finance%20could%20boost%20growth%20in%20emerging%20economies/MG-Digital-Finance-For-All-Full-report-September-2016.ashx
Fintech’s silent revolution
Sarwat AhsonDecember 18, 2017
https://www.dawn.com/news/1377207
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
THE EXPRESS TRIBUNE > BUSINESS
By mid-2018: With Fintech, Pakistan set to dismantle barriers to branchless banking
https://tribune.com.pk/story/1602502/2-mid-2018-fintech-pakistan-set-dismantle-barriers-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.
THE EXPRESS TRIBUNE > PAKISTAN > PUNJAB
ITU, BMGF ink financial inclusion research projects
https://tribune.com.pk/story/1623181/1-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.
Pakistan on road towards digital economy
To further utilise this FinTech phenomenon, it is mandatory for the relevant authorities to promote the products among the masses
https://nation.com.pk/24-Jan-2018/pakistan-on-road-towards-digital-economy
It was not that long ago, Pakistani bank account holders had to wait in the long ques for their basic banking transactions. Gladly, with the introduction of ATMs about two decades ago, many banking procedures can now be done without even visiting the bank branches. Despite of this, still there is an issue of “mobility” as account holders have to personally visit ATM’s for their banking transactions.
This issue of mobility opened up new avenue and now there is rapid increase in information sharing between financial institutions and technological firms. This merger of Finance and Technology is popularly known as “FinTech”.
Today, FinTech has become a global phenomenon that has made the banking and day to day financial services more accessible to a common man particularly through smartphones. According to the forecasts of International Data Corporation (IDC), 70% of smartphones were destined to be shipped to emerging markets while only 30% to the developed world. This 70% of smartphones are now widely being used as mobile bank accounts and mobile wallets.
Talking specifically about Pakistan, according to World Bank, about 100 million adults in Pakistan don’t have access to formal and regulated financial services. This number is approximately 5% of the world’s entire “unbanked” population, which currently stands at 2 billion. Despite of this, there is one huge positive aspect that Pakistan leads in digital finance and branchless banking in South Asia as 6% of adults have mobile accounts compared to South Asia’s average of 2.6%. This shows that Pakistani consumers are ready to accept the new technology.
The acceptance of new technological platforms is evident from the fact that Pakistani banking industry that started back in 1947 touched figure of 40 million bank accounts in the year 2016 whereas it took branchless banking only five years to reach 17 million accounts. There is also a forecast that in few more years this figure would reach 20 to 30 million. This growth was possible due to the increase in the mobile phone subscribers in Pakistan.
With the introduction of National Financial Inclusion Strategy (NFIS) launched in 2015, now almost all banks have introduced their official banking apps. These apps allow users to perform basic banking operations like checking balance, transfer of funds, payment of utility bills etc. All these transactions are done over a safe and secure network and secondly the issue of mobility (mentioned earlier) has also been solved as all transactions can be done with a touch of few buttons right from home.
Now banks and financial corporations should further try to promote and educate their account holders so that they can get maximum benefit from the facilities available through branchless and mobile banking. Moreover, products like Telenor Easypaisa, SimSim Mobile Wallet, and Jazz Cash are disrupting the normal day to day financial processes in the country serving almost every part of the society particularly the unbanked population.
Economy is the backbone of all kinds of development process thus the amalgamation of technology with finance is the step in the right direction. Now to further utilise this FinTech phenomenon, it is mandatory for the relevant authorities to promote the products among the masses.
Pakistan’s first FinTech Centre established at ITU
1
Share
Arsalan Haider
https://dailytimes.com.pk/193084/pakistans-first-fintech-centre-established-itu/
The Bill & Melinda Gates Foundation (BMGF) and Information Technology University (ITU) established Pakistan’s first FinTech Center at ITU here on Wednesday.
ITU Vice Chancellor Dr Umar Said, Karandaz CEO, representatives of BMGF were present on the occasion.
According to collaboration, the center will ensure financial inclusion and make large portion of our population part of economy through technology. While speaking on On occasion, Dr Umar Saif said that Pakistan was a growing economy and the gender based financial inclusion would become part of the documented economy, he added.
Dr Umar Saif, further said that joining hands with international development partners Bill & Melinda Gates Foundation and Karandaaz for innovation and research in financial technology space was a welcome step. We envisioned to partner with local and international entities for financial inclusion through innovative applications of technology to help Pakistan to reform the digital financial services especially with inclusion of women, he said.
Ali Sarfraz Hussain CEO KARANDAZ said that together with Bill & Melinda Gates Foundation (BMGF) and UK’s Department of Development we were working with various departments for financial inclusion including National Savings, State Bank of Pakistan and Agriculture Department of Punjab while with special grant first FinTech center being established at ITU Punjab.
Jason Lamb Deputy Director Financial Services for the Poor, Bill & Melinda Gates Foundation (BMGF)said that Gates Foundation focused Pakistan among the five largest countries including Indonesia, Algeria, India etc. Digital technology was playing key role in fundamental changes in services with credit availability, he added.
Jason further stated 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 and that Karandaaz and ITU have partnered to make this possible, he said.
He said ITU’s FinTech would devise many innovations and some research projects while three specific academic researches undertaken by this FinTech Center wouldimprove the existing knowledge on women’s use of digital financial services and the barriers they face. The research center will help to develop a deeper understanding of the challenges in financial inclusion and exploring the potential of data science and Information Communication Technologies as a viable solution.
#China’s #Alibaba's subsidiary Ant Financial makes foray into #Pakistan through Telenor deal. #payments #fintech #CPEC
https://www.ft.com/content/e0ead4c2-26c8-11e8-b27e-cc62a39d57a0
Telenor Group, the Norwegian telecom giant and Ant Financial Services, an affiliate of Chinese e-commerce giant Alibaba, on Tuesday announced a ‘strategic partnership’ that will see Ant invest $184.5m in Pakistan’s Telenor Microfinance Bank (TMB), a subsidiary of Telenor.
The investment, which is the first by Ant in the south Asian country, will oversee investments in further developing TMB’s mobile payment and digital financial services.
“There are 100m Pakistanis (roughly half the population) who don’t have a bank account,” Sigve Brekke, CEO of Telenor Group, told the Financial Times, highlighting the scope for expansion of banking services. “The services they will receive will range from payments of bills, drawing salaries, drawing pensions and access to micro finance”.
Mr Brekke said progress by Pakistan in creating a national ID cards system run by the government’s national database registration authority has helped to improve documentation for financial transactions.
“This [customers’ details] have to match with their IDs [national ID cards],” he said. “Its a way [of documentation of money transfers] to deal with issues like money laundering.”
A central bank official in Karachi, the southern port city said products like the ones offered by TMB have helped to improve security of transactions, especially in congested urban neighbourhoods where thefts at gun point were common in the past.
“Rather than carry currency notes all around, its safer to go to a franchise and just send or receive money,” said the official. “This is the kind of service also helps people avoid going out in the rush hour.”
The announcement comes as Telenor Pakistan gets ready to celebrate its 13 years of existence in the country next week. During this time, the company has invested approximately U$3.5bn in Pakistan’s telecom sector where the demand for voice communication has quickly added to a rapidly growing number of data customers.
Mr Brekke said the company expects a strong growth in demand from customers who seek to use mobile services for financial transactions.
#Pakistani-#American founder Amir Wain of #SiliconValley #fintech #payments firm i2c expands operations to #Omaha #Nebraska
http://www.omaha.com/money/payments-company-to-bring-jobs-to-omaha-invest-million-in/article_60e4bca3-a20b-52fb-81db-f732528e726a.html
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.
Alibaba affiliate AFG to invest $185m in microfinance banking sector in Pakistan:
https://dailytimes.com.pk/214546/afg-to-invest-185m-in-microfinance-banking-sector/
KARACHI: The Ant Financial Services Group, an affiliate company of the Chinese Alibaba Group, will invest $184.5 million for a 45 percent stake in Telenor Microfinance Bank (TMB), a subsidiary of Telenor Group, to further develop TMB’s mobile payment and digital financial services.
Ant Financial, the most valuable fintech company in the world operates Alipay, the world’s largest mobile and online payments platform as well as Yu’e Bao, the world’s largest money-market fund. It also runs the Sesame Credit rating system.
Telenor Group announced on Tuesday that it has reached a strategic partnership agreement with Ant Financial Services Group in Pakistan, where Ant Financial will invest $184.5 million for a 45 percent stake in TMB. The strategic partnership between Telenor Group and Ant Financial combines TMB’s knowledge and local market presence with more than 20 million customers, and Ant’s technology in Alipay, the world’s largest digital payment platform, and other financial services, to bring mobile payment and inclusive financial services to individuals as well as small and micro businesses in Pakistan.
TMB offers Easypaisa, Pakistan’s first mobile financial services platform launched in 2009, which has since developed into the largest branchless banking service in Pakistan in terms of agent network, active accounts and transaction value, according to the State Bank of Pakistan. TMB also provides micro-finance and related financial services to the less privileged and unbanked segment of the Pakistani society.
“Partnering with a world leading payment provider like Ant Financial will strengthen TMB’s future payment platform and set new standards in the digital banking business in Pakistan. The establishment of this partnership is well in-line with the expressed Telenor strategy of focusing our financial services efforts in emerging markets, making sure that we’re able to build and modernize the businesses in line with customer needs. I’m truly excited about the opportunities this partnership brings for Telenor Microfinance Bank going forward,” says Sigve Brekke, CEO of Telenor Group.
“Ant Financial is pleased to be in this strategic partnership with Telenor Group. Alipay’s technologies make us uniquely placed to achieve our mission of bringing the world equal opportunities. Today, we are very happy to share our technology knowhow with Telenor Microfinance Bank,” said Eric Jing, CEO of Ant Financial.
#Cubix bags the first prize in the #Fintech Hackathon 2018 in #Karachi #Pakistan #Momentum
http://chicagoeveningpost.com/2018/03/08/cubix-bags-the-first-prize-in-the-fintech-hackathon-2018/
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.
Pakistan's Community Savings
https://www.bloomberg.com/news/photo-essays/2013-01-17/pakistans-community-savings
Millions of Pakistanis save billions of rupees in informal, interest-free savings circles called ballot committees, run by housewives, students, office workers, shopkeepers, even high-society ladies. Each member of a group of trusted friends or relatives contributes the same sum daily or monthly to a pool for a predetermined length of time, usually one year. Through a ballot, each participant is allotted a number indicating his or her turn. Every month, one participant gets the pool total. Everyone on the committee keeps contributing until each member gets a pot of cash.
Pictured, Farzana Khatoon, 52, a mother of two sons and three daughters, with kitchen appliances, dishes, gold jewelry, and other items she bought for her daughter's wedding. She received 50,000 rupees ($512) in a ballot committee, which she used to buy the household goods that are traditionally parents’ gifts for a daughter's wedding.
Ballot Committees
Millions of Pakistanis save billions of rupees in informal, interest-free savings circles called ballot committees, run by housewives, students, office workers, shopkeepers, even high-society ladies. Each member of a group of trusted friends or relatives contributes the same sum daily or monthly to a pool for a predetermined length of time, usually one year. Through a ballot, each participant is allotted a number indicating his or her turn. Every month, one participant gets the pool total. Everyone on the committee keeps contributing until each member gets a pot of cash.
Pictured, Farzana Khatoon, 52, a mother of two sons and three daughters, with kitchen appliances, dishes, gold jewelry, and other items she bought for her daughter's wedding. She received 50,000 rupees ($512) in a ballot committee, which she used to buy the household goods that are traditionally parents’ gifts for a daughter's wedding.
Phone Funds
Nasir Rao, 45, a driver, used his savings to buy a Nokia phone.
Household Budget
Tahira Bibi, 34, a mother of three sons and two daughters, bought a washing machine and microwave oven with the 20,000 rupees she received through her savings circle. She also used some of the money for her children’s school fees.
Computer Cash
Muhammad Sajid, 28, who works at an advertising agency, bought a laptop with community savings.
Business Capital
Rao Khayyam Shabbir, 32, owner of a fashion outlet, at his shop in Karachi. He received 5 million rupees in a ballot committee, and used 3.2 million rupees for investment in his business.
Car Financing
Ali, 33, a shop owner, with the car he bought when he got his turn in a ballot committee.
THE EXPRESS TRIBUNE > BUSINESS
Common pools: Crowd Financing and ‘Committee’ System
https://tribune.com.pk/story/620038/common-pools-crowd-financing-and-committee-system/
Like other countries, developed and developing alike, there has been huge emphasis on financial inclusion in Pakistan. A number of institutions (including charities and other businesses in the services and utilities sector) are using electronic media to raise and transfer money as part of their payments or credit systems. Many businesses, however, continue to use traditional channels to raise investments from general public, primarily in an unregulated way. One recent example of failure of regulation has been in the form of Mudaraba business scam in Pakistan, which caused investors to lose billions of rupees after being lured into investing in reportedly very lucrative businesses that were presented to financially unsophisticated general public.
Given the improvement in technology, there is a need to look into some traditional forms of savings and loan businesses with a view to regulating them for the benefit of all the stakeholders. Crowd funding is a new phenomenon that emerged from the USA and now becoming a popular way of funding small and medium enterprises in a number of countries. In Pakistan, “committee” system has existed for long to pool funds to save together and help members of the committee to have access to interest-free loans for a variety of purposes, primarily for household consumption but also for businesses and projects. It is interesting to see how this traditional form of savings can be used to develop a powerful financial inclusion tool in Pakistan.
In informal sectors, there are different types of “committees,” one of them being a “lucky committee.” Although there are different variants of lucky committees in practice, all of them have the following common features:
First, a group of people contributes money to a common pool on a frequent basis (daily, weekly, monthly etc.);
Second, a draw takes place with the same frequency as that of the monetary contributions; Then one lucky member of the group whose name or number is drawn successfully receives a fixed amount of money, normally equal to or less than the common pool of contributions for the period for which the draw takes place; once a person wins, they cease to contribute further amounts for the period of the committee; other members of the group continue until their names are drawn successfully; the committee is wound up when all members of the group have received a fixed amount.
This is an interesting arrangement, as no one in the group suffers a total loss of the capital contributed by them. Everyone does receive a fixed amount, although some receive more than what they contribute and others receive less than their contributions. For example, if there are 100 members of the group each contributing Rs100 on a weekly basis, the total weekly contributions amount to Rs10,000. The total duration of such a lucky committee is 100 weeks. Normally the “lucky pot” is less than the amount collected. For simplicity, we assume that the lucky pot is Rs5,000, which is received by every winning member. Thus the winner in week 1 receives Rs5,000, while they contribute only Rs100. The last winner on the other hand receives Rs5,000, while they must have contributed Rs10,000 by that time. This actually means that all those who win in the first half of the duration of the lucky committee receive more than what they contribute while those who win in the second half contribute more than what they receive.
Another committee arrangement, mostly used by business people for their working capital financing, involves bidding for the committee pool. It works like this:
Alipay in Pakistan?
https://www.brecorder.com/2018/03/15/405127/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.
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.
https://www.newsdeeply.com/womensadvancement/community/2018/01/26/how-digital-payments-revolutionized-poor-womens-lives-in-pakistan
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.
#Pakistan #digital #banking growth accelerates. Fiscal 2017-18 saw 3.4 million #ecommerce transactions worth Rs18.7 billion, representing year over year growth of 183.3% and 98.9%. #fintech https://www.globalvillagespace.com/pakistan-banking-sector-witnesses-growth-on-digital-front-and-agriculture/ via @GVS_News
The State Bank of Pakistan (SBP) in its ‘Payment Systems Review’ for the financial year 2017-2018 has provided a statistical snapshot of the payment systems in the country, showing growth in various traditional and modern payment systems.
During the financial year 2018, the country’s core payment systems infrastructure remained operationally resilient. All the channels of payment systems showed significant growth compared to the previous year. The large-value payment system i.e. Pakistan Real Time Interbank Settlement Mechanism (PRISM) processed 1.7 million transactions amounting Rs361 trillion.
There were 1,094 locally registered e-Commerce Merchants having their merchant accounts in 8 banks as of the end of June 2018 showing limited boarding of e-Commerce merchants in the country
These transactions showed significant growth of 54.5 percent and 29.2 percent in both volume and value of transactions compared to the previous financial year. In these transactions, the transactions with regards to third-party customers’ transfers have the highest share of 1.3 million transactions (i.e. 79 percent of the overall recorded transactions) whereas Government securities settlement transactions have the highest share of Rs256 trillion in a value of transactions.
There were 1,094 locally registered e-Commerce Merchants having their merchant accounts in 8 banks as of the end of June 2018 showing limited boarding of e-Commerce merchants in the country. Consumers carried out 3.4 million online transactions of worth Rs18.7 billion on these locally registered e-Commerce Merchants during the year FY18.
These transactions showed a significant YoY growth of 183.3 percent and 98.9 percent compared to the previous year. In addition to the above, domestically issued Debit, Credit and Pre-paid cards processed 6.8 million transactions of Rs. 39.7 billion on local and International e-Commerce merchants. In these e-Commerce transactions, Credit Cards has the highest share both in volume and value of transactions.
While no specific information has been provided on the number of users of these cards, the number of transactions processed through these cards has increased by 37.3 percent with total transactions, as on June 2018, having been reported at 34.4 million, at a value of Rs201.5 billion during the fiscal year 2018.
Agriculture loans in 2017/18 were 38.1 percent higher than the previous year’s disbursements of Rs704.5 billion, the State Bank of Pakistan (SBP)
Having grown at a pace of 21.8 percent and 23.4 percent in the volume and value of transactions respectively, during the year under review, debit cards processed a total of 441.1 million transactions worth Rs5.1 trillion, far greater than the size and value of transactions conducted using credit cards.
However, the bulk of this usage has been on transactions concerning ATM withdrawals whereas the share of transactions with respect to Point of Sale usage has been merely 8.6 percent in volume and 2.9 percent in the value of transactions.
Credit cards, on the other hand, has been the predominant medium for Point of Sale usage, with the 87.2 percent of the total volume of credit card transactions being made on Point of Sale payments and 10.2 percent in e-Commerce transactions.
Meanwhile, Banks disbursed agriculture credit of Rs972.6 billion during the last fiscal year of 2017/18, falling short of Rs1 trillion target set by the Agriculture Credit Advisory Committee (ACAC), the central bank said on Thursday.
SBP to increase financial inclusion of SMEs to 17pc
https://pakobserver.net/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
With a significant growth of some 195 per cent, mobile phone #banking transactions in #Pakistan crossed the Rs410 billion mark in fiscal year (FY18). #mobilemoney #payments #financialinclusion https://profit.pakistantoday.com.pk/2018/09/30/mobile-banking-transactions-grow-by-195pc/#.W7OKVkyOhZM.twitter
With a significant growth of some 195 per cent, mobile phone banking transactions in Pakistan had crossed the Rs410 billion mark in the last fiscal year (FY18).
According to the State Bank of Pakistan (SBP), mobile phone/app-based banking was being offered by 21 banks to 3.4 million registered users by the end of June 2018.
Intra-bank and Inter-bank fund transfer were the main contributors in total mobile phone banking transactions. Intra-bank fund transfers contributed 5.8 (26.6 per cent) million transactions by volume and Rs 186.2 (45.4 per cent) billion by value. Inter-bank fund transfers contributed 5 million (22.9 per cent) transactions by volume and Rs196.4 million (47.9 per cent) by value.
Utility bill payments had the share of 10.1 million (46.3 per cent) by volume and Rs10.5 billion (2.6 per cent) by value within the overall mobile banking volume and value transactions respectively.
Call centres/IVR banking channel processed 0.3 million transactions amounting to Rs8.7 million. This channel facilitates Intra and Inter-bank fund transfers, utility bill payments.
As on June 30, 2018, there were 26.5 million call centres/IVR banking channel registered users with banks. It also facilitates 16 million non-financial transactions during the year.
The e-banking channels, i-e real-time online branches (RTOB), ATMs, e-commerce, internet, mobile phone and call centres collectively processed 756.4 million transactions of value Rs 47.4 trillion during the last fiscal year. These transactions showed significant growth of 21 per cent and 28 per cent in both volume and value of transactions compared to previous year FY17.
During the year under review, RTOB processed 165.7 million transactions of Rs 39.9 trillion. These transactions depicted the YoY growth of 15 per cent and 28 per cent in volume and value of transactions respectively compared to the previous year.
#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 https://en.dailypakistan.com.pk/technology/easypaisa-launches-qr-payment-method-in-universities-across-pakistan/
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.
How Chinese companies are planning a global fintech coup
Jayadevan PK Shadma Shaikh December 11, 2018
https://factordaily.com/chinese-fintech-goes-global/
A company document that FactorDaily reviewed lists eight major mobile wallet players in South and Southeast Asia among Ant Financial’s investee companies. These are Easypaisa in Pakistan, BCash in Bangladesh, TouchnGo in Malaysia, Kakaopay in South Korea, GCash in the Philippines, Ascend in Thailand and Emtek in Indonesia. And, of course, Paytm in India.
----------------
“Many of these people are either geographically remote, live in rural areas that are not served by banks, or that are not covered by branches and ATMs. The traditional banking services are not adequate or too expensive for these people,” says Konstantin Peric, Deputy Director, Level One Digital Payment Systems, Financial Services for the Poor (FSP) at the Bill & Melinda Gates Foundation.
To that end, Peric and a few other partner companies have built MojaLoop, an open-source software that can be used to build national digital payments platforms. In Swahili, Moja means One. Projects that use Moja Loop are underway in Kenya, Uganda, Tanzania, and Nigeria in Africa, and in Indonesia, India, Bangladesh and Pakistan in Asia.
---------------------
urugan is the owner of a small cloud kitchen in Shanghai. He speaks fluent Tamil, passable Mandarin, and a bit of English. The 41-year-old small time entrepreneur supplies Indian food to universities and office establishments in the city.
“I do it all on WeChat,” says Murugan, explaining how he runs a WeChat group called Murugan’s Kitchen where he posts a daily menu, takes orders and receives payments. “Most of my expenses are managed through WeChat,” he says. He serves between 100 and 200 customers daily.
If you want to gallivant about the galaxy, the Hitchhiker’s Guide to the Galaxy recommends getting a towel. But if you ever go to Beijing, a smartphone will do just fine.
Besides the ability to help you with obvious things, what makes the smartphone truly powerful here is that you can pay for everything using the phone. Not just in China’s large cities like Shanghai or football field sized shopping destinations such as China Mall in capital Beijing, but also in small towns and villages and tiny establishments.
Millions of entrepreneurs like Murugan, do business on mega platforms run by Alibaba and WeChat. China’s fintech growth, on the back of these platforms, has been unprecedented. With a record $12.8 trillion in mobile payment transactions in the 10 months to October last year, China even surpassed the United States, at only $49.3 billion during that period.
Mainly two apps – WeChat and Alipay – make all this possible. These apps owned by Chinese internet giants Tencent and Alibaba, respectively, control 93% of the country’s mobile payments market. As China pursued an industrial policy that made it the factory of the world and millions of Chinese came out of poverty, these apps played a big role in making their lives easier in the mainland.
Both Tencent and Alibaba, have reaped economic benefits of this growth. Tencent, which became China’s first company to cross $500 billion in market cap, is now valued at $374 billion. Alibaba has a market cap of $377 billion. Founders of these companies have also become immensely wealthy. Pony Ma, the founder of Tencent, is the world’s 14th richest person with a net worth of over $50 billion. Jack Ma is worth over $34.7 billion. Both are also members of the Communist party in China.
Next, they, along with dozens of hyper-funded upstarts, have designs on the world. They are quietly taking over the global fintech market at a scale that’s unheard of before. “If you said in 2010 that software is eating the world, in 2018, you should say Chinese software is eating the world,” says Nikhil Kumar, a volunteer with Indian software products think-tank iSpirt who was recently in China to learn more about the fintech ecosystem there.
#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 https://www.fltimes.com/business/national/tez-financial-services-and-green-girls-organization-selected-as-winners/article_189b9976-9b6a-5057-a376-6aba79b44f4b.html
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 Stéphanie 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.
Tez Financial Services Becomes the First #Pakistani #Startup to Raise $1.1 Million in Seed Round Led by #Ebay founder's Omidyar Network. #fintech #Pakistan #technology https://prn.to/2XiruCC
KARACHI, Pakistan, Oct. 19, 2018 /PRNewswire/ -- Tez Financial Services, the first fully digital Non-Bank Microfinance Company (NBMFC) in Pakistan, today announced that it has raised USD$1.1 million in a seed round led by Omidyar Network, the impact investment firm established by Pierre Omidyar, the founder of eBay. Other investors on this round include Accion Venture Lab, the seed-stage investment initiative of global nonprofit Accion, and Planet N. Funds will help the company build its credit portfolio, enhance its mobile technology platform, and secure the company's NBMFC license.
You can learn more about the challenge, opportunity, and impact in this video.
"Our aim is to become the primary financial service provider for the unbanked and underbanked in Pakistan," said Nadeem Hussain, co-founder and CEO of Tez, who has more than 30 years of experience in the global financial services industry. "Tez delivers a seamless experience for our customers, providing loans in under 15 minutes as opposed to the usual month timeline from local commercial banks. Soon, we will be able to process life and health insurance claims in a similar timeframe."
In Pakistan, more than 50 percent of the population is unbanked, with only 23 percent of the population served by formal channels, and another 24 percent by informal channels, according to the World Bank. Despite the fact that the country has 43 banks, low penetration of formal financial services including credit (14%), savings (12%), and insurance (2%) is persistent.
Most unbanked and underbanked consumers use a variety of informal financial tools to manage their finances, but those can be unreliable, expensive, and inefficient. With more than one-third of the population living below the poverty line, minor fluctuations in income can raise significant short-term financing needs. That can mean the difference between paying a bill at the end of the month, such as tuition, or buying groceries.
Mobile phones are changing all of that. The GSMA estimates that in two years, more than 80 percent of Pakistan will have 3G/4G coverage. The country already boasts 28 million mobile accounts—an indicator of consumers' readiness to adopt digital financial services, especially in remote areas not served by traditional banking.
"New technologies, higher smartphone penetration, and falling data costs are fueling a great momentum for financial inclusion in frontier markets such as Pakistan. Tez is leveraging this to push the boundaries of banking in the country with an all-digital offering," said Kabir Kumar, head of Policy and Ecosystem Building at Omidyar Network. "Tez's diverse team is also well-positioned to bring about the products and services that really speak to the next generation of consumers in that country."
"Tez marks our first investment in Pakistan, a country with a significant need for innovative products that can bring its population into the formal financial system," said Michael Schlein, President and CEO of Accion. "By supporting Tez's all-digital model, we can help make an important difference for millions of underserved Pakistani families and businesses."
Tez uses some of the latest technologies, such as artificial intelligence, to analyze consumers' digital footprint trends, social behavior, and consumption patterns in order to customize its offerings to meet each individual's needs through an all-encompassing, easy to use app, as follows:
Pakistani startup Tez Financial Services wins at Inclusive Fintech50
https://www.samaa.tv/technology/2019/06/pakistani-startup-tez-financial-services-wins-at-inclusive-fintech50/
Pakistani fintech startup Tez Financial Services has been selected as one of the winners of 2019’s Inclusive Fintech 50. Tez was the only Pakistani startup to have qualified for the competition, reported Clarity.pk.
The winners of Inclusive Fintech 50 were announced on June 17 by the MetLife Foundation and Visa Inc, with global nonprofit Accion and World Bank Group member IFC. The competition was launched in February.
Inclusive Fintech 50 is a competition to help early-stage fintech companies attract capital and resources to benefit the world’s three billion financially underprivileged people.
Tez Financial Services is the first fully digital Non-Bank Microfinance Company focused on serving the unbanked and underbanked in Pakistan.
The founders of Tez were leading forces in the creation of Tameer Bank, Easypaisa, and CheckIn Solutions.
How Raast will enhance Pakistan’s digital economy
https://www.thenews.com.pk/print/775964-how-raast-will-enhance-pakistan-s-digital-economy
Naysayers may question that when several private-sector digital cash transfer systems that do not require a bank account – such as JazzCash, operated by telecommunications company Jazz, and Easypaisa, operated by telecommunications company Telenor Pakistan – are already available locally, what is the efficacy of Raast? They should know that Raast would be the first platform to link government entities and financial institutions. It also promises numerous other benefits, which merit examination.
The salient features of Raast include instantaneous payments: near real-time digital payments across individuals, merchants, businesses, and government entities; low-to-no transaction costs for end users; Raast is designed to operate at a cost recovery model to make digital payments affordable to end users of all socio-economic backgrounds; full sector-wide interoperability: Raast will allow all financial institutions to seamlessly connect to each other via a single link to the central infrastructure, making digital payments accessible across any channel to customers of any financial institution; customer-centric innovative products/services; Raast will be built on cutting-edge technological standards, allowing financial institutions to develop innovative and user-friendly digital payment products and services like payment through phone number or email; and reliability and enhanced security; Raast will introduce more secure payment types, ensure that each transaction is authorized by the payer, and offer enhanced data protection and fraud detection services.
Pakistan currently faces a myriad of financial problems, which hamper its growth as well as place impediments in the fruition of development goals. Primary among them is the weak or low tax base.
According to figures provided by the Prime Minister, only two million people in a country of 220 million paid taxes, which was not enough for the desired social uplift of society involving the construction of hospitals, schools and providing other basic facilities of life for the common man. Imran Khan states that only 3,000 of the taxpayers pay 70pc of the tax. It is notable that his government has taken steps to automate collection of taxes on transactions and also tightened rules on banking but is still falling short of targets.
Thus, shifting away from a cash-based economy may be a logical step to broadening the tax base as well as tackling corruption.
Currently, remittances from abroad constitute using informal systems like hawala and hundi, which besides being illegal, manage to keep the transaction off the books and encourage money laundering. The instant payment system would not only document the economy, but also generate more taxes to help build the country. Pakistan’s ability to curb illegal financial transactions, including the alleged financing of militant and extremist groups, has been under close scrutiny from international financial watchdog the Financial Action Task Force (FATF). Hopefully, the revolutionary digital system will help Pakistan avoid the hangman’s noose of being blacklisted by FATF.
It is pitiable to see old pensioners including widows of government servants, lining up even in inclement weather to draw their pension from financial outlets and post offices, since they lack the capacity to open bank accounts. Raast will enable government payments, including salaries and pensions, to be made through it, as well as disbursements for nationwide financial support programmes, such as the Benazir Income Support Programme, and the Ehsaas Emergency Cash programme.
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.
https://www.wsj.com/articles/meet-the-investor-who-spots-opportunities-for-jeffrey-katzenberg-11642341603
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.
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’.
https://www.techjuice.pk/nadra-launches-digital-payment-system-to-replace-atm/
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.
VEON Subsidiary Pushes Digital Inclusion in Pakistan
Tommy Clift | Reporter
https://www.sdxcentral.com/articles/news/veon-subsidiary-pushes-digital-inclusion-in-pakistan/2022/09/
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.
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.
https://www.globalvillagespace.com/investors-including-hbl-participate-in-finjas-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. 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.”
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
https://www.insurancejournal.com/news/international/2022/11/07/693869.htm
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.
----------
https://247news.com.pk/waada-becomes-largest-technology-led-insurance-start-up-in-pakistan/
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.
Mobile banking doubles, internet banking grows by 51.7% in FY2021-22
As internet banking, POS, and eCommerce transactions post strong growth, the digital payments ecosystem is picking up steam
https://profit.pakistantoday.com.pk/2022/12/23/mobile-banking-doubles-internet-banking-grows-by-51-7-in-fy2021-22/
https://www.sbp.org.pk/PS/PDF/FiscalYear-2021-22.pdf
The overall number of payment cards, however, decreased during the year, from 45.9 million in 2020-21 to 42.4 million in 2021-22.
Bring in the fintech
According to the State Bank’s annual report, the four fully licensed EMIs (electronic money institution); Sadapay, Nayapay, Finja and CMPECC, combined had 262,558 total active accounts and 514,961 payment cards issued to their customers. Last year’s numbers on EMIs were not available for a comparison on how these numbers have grown.
The SBP has in the past has often emphasised on the potential fintech can play to boost digital payments and financial inclusion.
During his speech at the Institute of Banking Pakistan Annual Award Ceremony, Jameel Ahmad, Governor SBP stressed on the need for banks to revisit their traditional approach to service delivery and adapt quickly as digitalization shifts the balance of power from banks to tech savvy entities, hinting at the growing trend in fintech.
“Leveraging digital technology is essential not only to promote financial inclusion, but also to ensure that the industry keeps pace with emerging global trends,” opined Ahmed.
Speaking on the importance of technology, Ahmad quotes M-Pesa, a Kenyan fintech. “An often-cited success story is that of M-Pesa in Kenya, where it single-handedly drove mobile financial services availability and successfully raised financial services access in Kenya. “
Ahmad pointed out that a number of factors already exist in Pakistan that can help drive digital financial innovation and proliferation of a tech-based financial ecosystem. He pointed out that the nation has a fully functional digital ID system, ubiquity of mobile devices, penetration of mobile and broadband services, availability of faster payment rails, remote account opening process, and facilitative regulatory environment for enabling the entry of non-bank entities into the financial arena.
The Central Banker also points out that while fintech has brought competition, it also presents the sector with an opportunity to create synergies and mutually beneficial partnerships.
“Banks and Fintechs can partner with each other to provide innovative products for customers that are otherwise not viable on a standalone basis. For banks, such partnerships can help with penetration in untapped segments like retail businesses and Micro and Small Medium Enterprises, yielding beneficial outcomes for all stakeholders,” he said.
Encouraging the banks that are yet to make consistent and sustained moves toward technological transformation, Ahmad told them to make use of the digital bank frameworks and the instant payment system, RAAST, to position themselves for the future.
Pakistan’s Agriculture-focused Fintech Digit++ Obtains Approval from State Bank
https://www.crowdfundinsider.com/2022/12/200398-pakistans-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.
State Bank of Pakistan issues NOCs to five applicants for establishing digital bank
https://www.brecorder.com/news/40220082
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.
Financial inclusion in Pakistan increases to 30% - Profit by Pakistan Today
https://profit.pakistantoday.com.pk/2023/02/08/financial-inclusion-in-pakistan-increases-to-30/
https://portal.karandaaz.com.pk/dataset/financial-digital-inclusion/1038
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).
#Pakistan’s Abhi Issues First #Sukuk #Bond for a #Fintech in Region. #Karachi-based startup raised 2 billion rupees ($6.8 million). Demand exceeded expectations with subscriptions reaching twice the anticipated amount. #startup #technology
https://www.bloomberg.com/news/articles/2023-05-12/pakistan-s-abhi-issues-first-sukuk-bond-for-a-fintech-in-region#xj4y7vzkg
Pakistan’s financial platform Abhi has raised the first-ever Sukuk bond for a fintech firm in the region, opening a new funding line for startups that have seen a slowdown in venture capital.
The Karachi-based startup raised 2 billion rupees ($6.8 million), an industry first for the Middle East, Africa and Pakistan region, said Omair Ansari, chief executive officer and co-founder. Demand exceeded expectations with subscriptions reaching twice the anticipated amount, he said in an interview.
Post a Comment