Sunday, April 1, 2018

Fintech to Promote Financial Inclusion in Pakistan

About 100 million Pakistani adults lacked access to formal and regulated financial services as of 2016, according to a World Bank report on financial inclusion.  Only 2.9% of adults in Pakistan had a debit card, and only 1% of adults used them to make payments. Just 1.4% of adults used an account to receive wages and 1.8% of adults used it to receive government transfers in 2014. Since then, Pakistan has been leading the way in South Asia in digital finance and branchless banking.

According to the latest State Bank statistics on branchless banking (BB) sector, mobile wallets reached a high of 33 million as of September 2017, up 21% over the prior quarter. About 22 percent of these accounts – 7.4 million – are owned by women, up 29% in July-September 2017 over previous quarter. A McKinsey and Co analysis shows that adoption of financial technology (fintech) can help dramatically increase financial inclusion in Pakistan.

Karandaaz Pakistan , a non-profit organization, set up jointly by UK’s Department for International Development and Bill and Melinda Gates Foundation, is promoting financial technology in the country. Finja and Inov8 are among the better known fintech startups in the country. Chinese e-commerce giant Alibaba's Ant Financial's recent entry in Pakistan is creating a lot of excitement in Pakistan's fintech community.

Financial and Digital Inclusion in Pakistan. Source: Brookings Institution

Importance of Financial Inclusion:

Access to regulated financial services for all is essential in today's economy. It allows people and businesses to come out of the shadows and  fully participate in the formal economy by saving, borrowing and investing.

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 lead to debt bondage in developing countries.

Financial inclusion is good for individuals and small and medium size businesses as well as the national economy. It spurs economic growth and helps document more of the economy to increase transparency.

Status of Financial Inclusion in Pakistan:

About 100 million Pakistani adults lacked access to formal and regulated financial services as of 2016, according to a World Bank report on financial inclusion.  Only 2.9% of adults in Pakistan had a debit card, and only 1% of adults used them to make payments. Just 1.4% of adults used an account to receive wages and 1.8% of adults used it to receive government transfers in 2014. Since then, Pakistan has been leading the way in South Asia in digital finance and branchless banking.

M-wallets Growth in Pakistan in millions. Source: Business Recorder

Mobile wallets, also called m-wallets, are smartphone applications linked to bank accounts that allow users to make payments for transactions such as retail purchases. According to recent State Bank statistics on branchless banking (BB) sector, mobile wallets reached a high of 33 million as of September 2017, up 21% over the prior quarter. About 22 percent of these accounts – 7.4 million – are owned by women, up 29% seen in Jul-Sep 2017 over previous quarter. Share of active m-wallets has also seen significant growth from a low of 35% in June 2015 to 45% in September 2017.

“The benefits of digital payments go well beyond the convenience many people in developed economies associate with the technology,” says Dr. Leora Klapper, Lead Economist at the World Bank Development Research Group. “Digital financial services lower the cost and increase the security of sending, paying and receiving money. The resulting increase in financial inclusion is also vital to women’s empowerment.”

A McKinsey and Co analysis shows that adoption of financial technology (fintech) can help dramatically increase financial inclusion in Pakistan. 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. The Internet revolution is enabling rapid growth of financial technology (fintech) for increasing financial inclusion in Pakistan.

A McKinsey Global Institute report titled "Digital Finance For All: Powering Inclusive Growth In Emerging Economies" projects that adoption of financial technology (fintech) in Pakistan will add  93 million bank accounts and $36 billion a year to the country's GDP by 2025.   It will also create 4 million new jobs and add $7 billion to the government coffers in this period.

McKinsey report says that "Pakistan has solid digital infrastructure and financial regulation in place and has even had some success in digital domestic-remittance payments".

Fintech Players in Pakistan:

There are a number of companies, including some startups, offering fintech applications for smartphones that are linked to bank accounts. EasyPaisa operated by Telenor Microfinance is already well established. Among some of the better known startups working to disrupt the financial services sector in Pakistan are Finja and Inov8.

China's e-commerce giant Alibaba runs a major global e-payments platform Alipay. It also owns Ant Financial which has recently announced the purchase of 45% stake in Pakistan-based Telenor Microfinance Bank.

Telenor Pakistan runs its own e-payments platform EasyPay which will likely link up with Alipay global payments platform after the close of the Ant Financial deal.   Bloomberg is also reporting that Alibaba is in serious talks to buy Daraz.pk, an online retailer in Pakistan. These developments are creating a lot of excitement in Pakistan's fintech and e-commerce communities.

Alibaba and Alipay and other similar platforms are expected to stimulate both domestic and international trade by empowering small and medium size Pakistani entrepreneurial businesses and large established enterprises.

Karandaaz Fintech Promotion:

A key player promoting financial inclusion is Karandaaz Pakistan , a non-profit organization, set up jointly by UK’s Department for International Development and Bill and Melinda Gates Foundation.  It is providing grants for 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

Summary:

About 100 million Pakistani adults lacked access to formal and regulated financial services as of 2016, according to a World Bank report on financial inclusion.  Only 2.9% of adults in Pakistan have a debit card, and only 1% of adults use them to make payments. Just 1.4% of adults use an account to receive wages and 1.8% of adults use it to receive government transfers in 2014. At the same time, Pakistan is leading the way in South Asia in digital finance and branchless banking.

According to the latest State Bank statistics on branchless banking (BB) sector, m-wallets reached a high of 33 million as of September 2017, up 21% over the prior quarter. About 22 percent of these accounts – 7.4 million – are owned by women, up 29% seen in Jul-Sep 2017 over previous quarter. A McKinsey and Co analysis shows that adoption of financial technology (fintech) can help dramatically increase financial inclusion in Pakistan.

Karandaaz Pakistan , a non-profit organization, set up by UK’s Department for International Development and Bill and Melinda Gates Foundation, is promoting financial technology in the country.  Chinese e-commerce giant Alibaba's Ant Financial's recent entry in Pakistan is creating a lot of excitement in the country's fintech community.

Related Links:

Haq's Musings

South Asia Investor Review

Fintech Revolution in Pakistan

E-Commerce in Pakistan

The Other 99% of the Pakistan Story

FMCG Boom in Pakistan

Pakistan's Financial Services Sector

Bank Deposits Growth in Pakistan

Riaz Haq's Youtube Channel

Viewpoint From Overseas Channel 

43 comments:

Riaz Haq said...

Pakistan’s booming e-commerce market is just getting started
Sarfaraz A. KhanUpdated March 26, 2018


https://www.dawn.com/news/1397446


Pakistan’s e-commerce market has witnessed phenomenal growth recently.

The number of registered e-commerce merchants has risen by 2.6-times and e-commerce payments have surged 2.3-times in a span of just twelve months, as per a State Bank of Pakistan (SBP) report. But this is still a young market with significant room for growth.

Pakistani businesses have embraced e-commerce. Hundreds of retailers, ranging from clothing outlets to electronic equipment stores, are now using websites to sell goods to customers.

The emergence of several online marketplaces, such as Daraz.pk and OLX Pakistan, has made it easier for retailers to sell goods on the web. At the same time, a number of new online businesses have also propped up.

As per the SBP’s Payment Systems Review (Q2FY18), there were a total of 344 e-commerce merchants in the country registered with banks at the end of 2016. By the end of 2017, that number had climbed to 905.

This growth was accompanied by a surge in e-commerce transactions from these merchants from Rs3.9 billion in the last three months of 2016 to Rs9.1bn in the last three months of the previous year. The central bank’s report also indicates that around 800 million payment transactions totalling Rs4.5bn were booked in the last three months of 2017. That’s also considerably greater than the Rs2bn e-commerce payments that happened in the same period of 2016.

The actual value of e-commerce sales, however, is likely several times larger than the above-mentioned numbers. That is because the central bank’s report only shows those transactions that occurred through debit or credit cards.

But Pakistani consumers mainly use the cash-on-delivery (COD) system to buy goods online. As per one estimate, almost 85 per cent of online sales occur through COD. Using this, we can speculate that roughly Rs25.5bn e-commerce payments may have occurred in the Oct-Dec period through the COD system.

It wasn’t long ago when the Pakistan Telecommunication Authority noted in its annual report for the previous fiscal year that the size of Pakistan’s e-commerce market could grow from $60m-$100m in 2015 to $1bn by 2020.However, industry experts now believe that the country could hit the key milestone by as soon as this year.

If the country continues to witness e-commerce sales of Rs30bn in every quarter from electronic card and COD system, just as it likely did in the last three months of 2017, then the total sales for the ongoing fiscal may clock in at Rs102bn, or $1.1bn at the current exchange rate. If however, Pakistan witnesses an increase in online sales, which could be driven by the Eid shopping season, then the market could go way past the $1 billion threshold in 2018.

At $1 billion, however, the size of Pakistan’s e-commerce market will still be tiny. Global e-commerce retail sales are expected to be around $2.8 trillion in 2018, as per data from Statista, a provider of market and consumer data.

China is the world’s largest e-commerce market where the online retail sales are forecasted to be around $600bn for 2018, followed by the US with $461.5bn of expected sales. India could report $25bn of retail e-commerce sales in the current year.

That being said, Pakistan is still a young e-commerce market where less than one-fifth of the total population uses the internet.

As per latest data from Internet Live Stats, the global internet penetration rate is around 46pc. In developed markets like the US, the metric is over 80pc. In Pakistan, however, a little less than 18pc of the population has access to the internet. That’s less than half of the global average, which means that there’s significant room for growth although internet penetration in the country has already grown significantly from just 8pc in 2010.

Riaz Haq said...

Pakistan now has 53 million 3G and 4G subscribers, PTA

https://www.techjuice.pk/pakistan-now-has-53-million-3g-and-4g-subscribers-pta/

The number of internet users in Pakistan is rising fastly. According to report by Pakistan Telecommunication Authority (PTA), the number of 3G and 4G customers in Pakistan reach 53.24 Million by the end of March 2018. PTA observed the number of mobile users in Pakistan reached 149.10 million by March 2018 as compared to 147.204 million at the end of February 2018.

If you look at the individual mobile network count then Jazz is a top-notch telecom operator and its total count for 3G users stood at 14.98 million by March, compared to 14.88 million by end of February 2018, marking an increase of 0.1 million. Jazz 4G user numbers jumped from 2,590,092 by end February 2018 to 3,155,686 by 31 March.

Zong 3G subscribers elevated from 8.893 million by 28 February 2018 to 9.187 million by 31 March, whereas the variety of 4G customers jumped from 5,830,231 by February 2018 to 6,373,061 by 31st March.

The count of 3G customers of Telenor community jumped from 10.878 million by the end of February 2018 to 10.928 million by the end of March 2018. The number of 4G customers jumped from 2,154,238 by February 2018 to 2,451,057 by end-March.

Ufone added 0.147 million 3G users on its network during the month of March and the total count reached to 6.165 million by end-March compared to 6.018 by end of February 2018.

Teledensity for cellular mobiles reached 74.98 % and broadband subscribers reached 55,558,824 by the end of March in comparison with 53,554,231 by the end of February 2018.

The telecom sector of Pakistan has undergone through huge transformations after the arrival of 3G and 4G services in the country. However, the Pakistani government is going to introduce 5G technology as well that will be at least 100 times faster than the speed of 4G technology. The government has finally allowed the Pakistan Telecommunication Authority (PTA) to let telcos conduct 5G trials in Pakistan.

Riaz Haq said...

Pakistan Adopting Advance Technologies Rapidly: Anusha Rehman
Daniyal Sohail

https://www.urdupoint.com/en/technology/pakistan-adopting-advance-technologies-rapidl-321642.html

Minister for Information Technology and Telecommunication Anusha Rehman Friday said, Pakistan was one of those countries that had been adopting the advance technology most rapidly to counter challenges of modern, digital era.

While addressing the concluding ceremony of five-day "Huawei mobile Pakistan Congress 2018" the minister said, the technology advancements were coming in Pakistan adding "we also hope that we can have huawei made in Pakistan as soon as possible." Anusha said, Ministry of IT had started projects for Baluchistan worth Rs 26 billion to provide 3g service to the people there.

In the history of IT of Pakistan, this was the biggest investment for Balochistan, which aimed to target hundreds of villages to connect these remote areas with 3G service, she added. She said,a population of about 196,177, covering 269 mauzas and an area of 39,434 sq kms would get modern broadband facilities through this project.

The project would cover Awaran, Jhal Jao and Mashkai tehsils/sub-tehsils of Awaran district and Bela, Lakhra, Liari, Uthal, Dureji, Hub, Sonmiani and Kanraj of Lasbel district, she added. The Minister said, after launching 3G services in Baluchistan, other services like careem would be start in in the province which would be a great achievement of Ministry of Information Technology.

She emphasized the importance of technological advancement and virtual assistance for the generations to come to bring this nation on path of Technology evolution and prosperity. "Government is making all out efforts to introduce 5G technology in Pakistan by 2020 to bring it at par with Developed economies in term of technology advancements." She emphasized that women's economic empowerment was at the heart of the sustainable development and essential to achieve gender equality, poverty eradication and inclusive economic growth.

She shared initiatives steered by IT ministry in this regard, particularly ICT for Girls program. She said, achievements of Pakistan in the arena of ICT and future plans for continued growth in this sector would enable transformation into "Digital Pakistan".

Anusha described the DigiSkills program as an important part of Information Technology initiative of the government that would create online employment opportunities to enable youth to earn 200 to 300 dollars per month and with the help of this program, youth from across the country would provide services across the globe.

She appreciated the Huawei Technology role in setting such precedent to promote emerging technologies in Pakistan by involving Industry players and engaging the Government to make it reality. The Minister hoped that people of Pakistan were going to use the opportunities that were created by Huawei, the technology giant.

Riaz Haq said...

#Alibaba's entry in #Pakistan hailed as boost for #DigitalEconomy. Experts predict #Islamabad likely to lower high taxes after #Chinese e-retailer's investment. #ecommerce #fintech #Daraz #AliPay #Telenor #Telecom #payments

https://asia.nikkei.com/Business/Companies/Alibaba-s-entry-in-Pakistan-hailed-as-boost-for-digital-economy

KARACHI -- Alibaba Group Holding's recent purchase of a Pakistan-based online retailer has positioned the Chinese technology conglomerate to make inroads in e-commerce across South Asia, but the acquisition has raised expectations of robust growth in an industry that many experts say performs well below its potential.

Gaps such as the absence of a global online payments system can now be filled through Alibaba's Alipay service, said Shuja Rizvi, a Karachi based senior stock market analyst at Al-Hoqani Securities. "With the entry of a major player like Alibaba, Pakistan's policies will be molded to face global competition and our environment will hopefully improve," Rizvi said in an interview with the Nikkei Asian Review, citing one of the most commonly discussed benefits of Alibaba's arrival in the country.

Alibaba announced earlier this month a deal to buy Daraz Group, a Pakistani digital marketplace company, for an undisclosed amount. Since it was founded in 2012, Daraz has steadily expanded its services to Myanmar, Bangladesh, Sri Lanka and Nepal, say analysts who regularly track the e-commerce sector.

The acquisition comes as Pakistan prepares to receive more than $60 billion in Chinese investment under the China-Pakistan Economic Corridor -- a cornerstone of Chinese President Xi Jinping's Belt and Road Initiative. Alibaba's arrival in Pakistan also has been preceded by significant growth in cellular phone services and high-speed internet across the country in recent years, analysts say.

According to the Pakistan Telecommunication Authority, or PTA, the official regulator of the telecom sector, more than 73% of Pakistan's population, or roughly 149 million people, have cellular phone subscriptions. Especially important for the growth of digital businesses is the estimate of 56 million people, or more than 27% of the population, who subscribe to broadband services -- a key figure indicating the number of internet users, many of whom will be potential future online customers.

"Today, the number of internet users in Pakistan are more than the entire population of many countries around the world," a senior official with the Ministry of Information Technology and Telecommunication in Islamabad who requested anonymity because he was not allowed to speak to journalists, told Nikkei. "For investors like Alibaba, there is fertile ground for a strong future expansion."

Other PTA officials said that online retail businesses in Pakistan have much room to grow as they have an advantage over traditional retail outlets that have to invest heavily in commercial real estate to sell their products to consumers.

"In the most prized commercial markets of Pakistan -- in big cities like Karachi, Lahore or Islamabad -- rents have more than doubled for the top-end premises just in the last 10 years," said the Ministry of Information Technology official. "And the overhead costs -- especially rents -- continue to rise."

Barkan Saeed, chairman of the Pakistan Software Houses Association, the main representative body of the country's software industry, welcomed Alibaba's purchase of Daraz and entry into the country "as a major milestone" for Pakistan's e-commerce sector. Saeed said that while the government estimates the annual value of e-commerce transactions in Pakistan at approximately $600million, the actual figure could be five times that amount.

Riaz Haq said...

How Ant Financial Will Completely Change the Pakistani Retail Banking Landscape

https://www.linkedin.com/pulse/how-ant-financial-completely-change-pakistani-retail-omer-salimullah/?trk=eml-email_feed_ecosystem_digest_01-recommended_articles-6-Unknown&midToken=AQG4-FJ6lIvEmQ&fromEmail=fromEmail&ut=33KMcFs0XpJUc1

Banking in Pakistan is an extremely in-efficient industry where 35+ banks have only been able to bank 25 million Pakistanis in the last 70 odd years. This means that as an industry, banks are providing their services to only 12% of the population. The branchless banking industry has not fared much better either with only 35 million wallets out of which 50% are inactive (no activity in the past 3 months). This is a sorry state of affairs by any yardstick. In the new world, wherever there has been inefficiency in an industry, it has been disrupted – big time! Uber, Didichuxing, Careem, Grab have decimated the taxi industry worldwide. AirBnB has dented the hotel industry significantly to the extent that Airbnb is now bigger than the world's top five hotel brands put together. PayTM in India (Ant owns more than 50% of Paytm and has injected close to US$ 1 billion into this company) has now become the biggest financial firm in India, in less than five years. and plans to become the world's largest digital bank with 500 million account holders. With all the inefficiencies found in it's midst, the retail banking industry in Pakistan is a prime candidate for this type of massive disruption.

In this backdrop comes the Ant Financial Services Group (“Ant Financial”), established by Alibaba Group and its founder Jack Ma acquisition of 45% of Telenor Microfinance Bank (TMB) for US$ 185 million at a total post money valuation of US$ 410 million. Make no bones about it - this is a VERY big deal. As a comparison, 100% of RBS Pakistan was sold to Faysal Bank for US$ 50 million. Please note that Ant has not valued a Pakistani micro finance bank at US$ 410 million. What they have valued is the almost complete takeover of the retail financial services market from incumbent banks. They realize that Pakistan is one of the most in-efficient banking markets in the world and it will be simple to take every last morsel of the retail banking pie from banks. The market potential of some 100 million un-banked individuals is a mouth-watering prospect for Ant.

How Will “Ant Paisa Bank” Take Over Retail Banking in Pakistan?

Go big on QR: Ant will introduce Alipay (or a local variant) here in Pakistan. This will be their big play to capture a huge chunk of retails payments which are currently happening in cash. QR uptake has been slow in Pakistan where only small players like FonePay are pushing it. With the financial & marketing muscle that Ant brings, they will make QR payments common with incentives on both the merchant and customer side.

- Digital Lending: This will be the secret sauce which finally tips the scale for digitization payments in Pakistan. Consumer lending via Ant has reached $95 billion in China and Paytm in India launched Paytm Score in February which they will use to lend to users of their platform. Our biggest hurdle in digitizing cash payments has been the reluctance of users (especially merchants) to document their cash flow fearing tax implications. In a country where less than 1% of the population pays tax, this has always been the biggest impediment in digitizing payments. However, once the conversation switches to these merchants receiving funding/loans from Ant based on their throughput via Ant channels (i.e. giving loans to small businesses for purchasing goods from Ali Baba), they will be more than happy to roll the transaction through digital channels.

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Riaz Haq said...

How Ant Financial Will Completely Change the Pakistani Retail Banking Landscape

https://www.linkedin.com/pulse/how-ant-financial-completely-change-pakistani-retail-omer-salimullah/?trk=eml-email_feed_ecosystem_digest_01-recommended_articles-6-Unknown&midToken=AQG4-FJ6lIvEmQ&fromEmail=fromEmail&ut=33KMcFs0XpJUc1

Technology Stack: In a recent interview post the Ant investment, Shahid Mustafa, CEO of Telenor Bank said “….there’s a sunset date for the current technology and that’s when we will look to upgrade the back-end technology”. With all the financial clout that Ant will bring, the thing that will break the proverbial camel’s back (the camel being the Pakistani financial industry) will be the tech prowess that Ant will introduce in Pakistan. MIT Tech Review published an article with the headline “Meet the Chinese Finance Giant That’s Secretly an AI Company” referring to Ant’s AI, computer vision and natural language processing capabilities. This is how important AI is to Ant. Last year the company acquired EyeVerify, a U.S. company that makes eye recognition software. Ant will bring AI powered payments, lending, insurance, and anti-fraud capabilities to Pakistan and completely transform the way financial services are delivered. Think Instant and Frictionless.

- Amazing User Experiences: The news of Ant buying Daraz, the largest e-commerce player in Pakistan, has been doing the round for quite some time. If this deal goes through, Ant will bring it’s world class e-commerce expertise via Ali Baba to Pakistan. Digital payments has always been a challenge for e-commerce in Pakistan. Having both the payment and e-comm side under its control, Ant can make a huge dent into both these fledgling areas. Imagine being offered an AI-powered personalized & instant loan on shopping done on Daraz. Imagine being able to file an insurance claim for a car accident where all you need to do is take a picture of the accident and Ant’s AI image processing engine will finalize the findings in seconds. Imagine bots talking to Pakistanis in any regional language to handle customer service or conduct transactions (voice will remove the last block in making digitization widespread in Pakistan where lack of education prevents reading and writing based solutions to gain traction)

Why Does This Matter to Existing Banks?

With the marketing and tech muscle that Ant will bring into Pakistan, the next 24 months are going to be critical for small to mid-sized banks. Easypaisa is a brand that resonates both with the un-banked and the youth. These markets are major growth areas for banks going forward and if these are taken away by Easypaisa due to providing delightful user experiences, the oxygen will be sucked out of this industry. Expect to see a LOT of mergers among the incumbent banks. The big-5 may survive due to their corporate and treasury business but the mid to small sized banks will go under water due to the coming tsunami. It may seem that I may be overstating the threat but this is not the case. There is a high level of digital illiteracy on the management boards of Pakistani banks and the average age of C-level suites in banks is 50+. There is too much old-world thinking in corridors of powers in banks. There is ZERO realization of what is coming and how big this sea change will be.

What Can Existing Banks Do?
Are we looking to help banks that charge customers an average of PKR 50 for an Interbank Fund Transfer (IBFT) transaction (some are charging more than PKR 150) while giving out free checkbooks? Most banks think they’ve become digital because they’ve rolled out a mobile app. All the other important areas like account opening, lending, payments continue the way they were implemented in the mid-90s. This is not digital. And no Head of Digital Transformation or a Head of Innovation can convert a dinosaur into an agile cheetah. Transforming an organisation is next to impossible due to legacy systems and legacy mindsets (Nokia and Kodak couldn't do it).

Riaz Haq said...

#Technology firms Avanza Group & Premier Systems announce investment of $5 million in the #payment #gateway to connect individuals with merchants and banks via joint venture as Avanza Premier Payment Services (APPS) in #Pakistan #mobilepayments #ecommerce https://www.techjuice.pk/two-technology-firms-to-establish-online-payment-gateway-in-pakistan/

Two technology groups in Pakistan have collaborated to develop a local online payment gateway system to take a share in the growing e-commerce market of Pakistan.

Avanza Group and Premier Systems announced to invest over $5 million in the gateway which is aimed to connect individuals with merchants and banks. According to sources, the two companies will set up the joint venture as Avanza Premier Payment Services (APPS).
Mahmood Kapurwala, CEO of Avanza Group said, “the size of Pakistan’s e-commerce market is estimated to be $1 billion, which should be $30-$40 billion in a country with a population of 207 million.’ He also partnered with NCR, Avaya, Microsoft, and IBM. He added, “We are looking at this gap as an opportunity.”

APPS claims to be the first Financial Technology (fintech) in the country to obtain payment system provider (PSP) and payment system operator (PSO) licenses from the State Bank of Pakistan (SBP). According to McKinsey and Company, a worldwide management consulting firm, Fintech will add about 4 million jobs, 93 million bank accounts and $36 billion annually to the gross national product (GNP), and $7 billion to the government’s net revenue by 2025.

The newly-founded company plans to incentivize brick and mortar businesses with free online services, like building websites and digital marketing. It will only take a certain share in the profit that comes through online businesses. Adnan Ali, CEO, APPS said: “It will move Pakistan towards digitizing major institutions, such as merchants, schools, billing industries, mutual funds and other corporate entities by providing a digital gateway.”

Avanza Group CEO said, Increase in e-commerce acceptance will also help grow the overall retail market when people will have the choice to buy products present in other cities, He said, “If everything remains on track, earning a revenue of Rs400 million will not be a big deal.”

Riaz Haq said...

#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.

Riaz Haq said...

Fintech Factory, Pakistan’s first and only financial technology focused accelerator program in collaboration with TPS, Sybrid, Rapidcompute, JS Bank & Takaful Pakistan, is progressing towards Karandaaz’s 3rd Fintech Disrupt Challenge finale. Karandaaz, Pakistan’s leading promoter of financial inclusion and associated technology, partnered with Fintech Factory to induct selected applicants for FDC III (2018) into the accelerator program and help them reach a market-tested scalable MVP for the challenge.

Fintech Factory’s unique financial technology accelerator program takes startups with market validation and offers them access to state-of-the-art workspace, industry-leading mentors, skillset development through personalized training, and networking opportunities. The program aims to develop the ecosystem in a self-sustaining manner to catalyze innovation in the fintech space to reduce the digital divide and improve the lives of Pakistanis.

https://www.techjuice.pk/7-trainees-from-pakistans-first-fintech-accelerator-to-participate-in-karandaazs-3rd-fintech-disrupt-challenge-finale/

Riaz Haq said...

#Legacy #banks #payment platform fights back. #Swift takes on #fintechs with new faster, more efficient system. SWIFT platform is now owned by 2,500 banks and is used to move more than $200 billion around the world daily. #blockchain https://www.ft.com/content/05d41660-f7c8-11e8-af46-2022a0b02a6c via @financialtimes


Legacy payments platform Swift is piloting a new system to speed up banks’ cross-border transfers and reduce errors, firing a shot across the bow of a blockchain-based project that claims to do the same thing and payments fintechs that offer cheaper, faster services. 

Founded in 1973, Swift was banks’ original answer to the question of how to move money around the world more quickly and easily. The platform is now owned by 2,500 banks and is used to shift more than $200bn around the world daily.

Inefficiencies, however, have left the platform ripe for competition from payments start-ups such as Revolut and TransferWise, as well as the Interbank Information Network (IIN). More than 130 banks, led by JPMorgan Chase, have signed on to the blockchain-based IIN project, which shares information between banks on a mutual distributed ledger. That allows them to quickly resolve errors and compliance issues that can delay payments by weeks.

In a testament to how banks are hedging their bets on the future of payments, several of those banks are now part of a pilot for Swift’s own fix for lengthy payment delays — — a new “prevalidation” system in which banks use an application programming interface (API) to access each other’s data to check things such as the validity of bank account numbers when a payment is initiated. 

Under the blockchain-based system information is shared on a mutually distributed ledger hosted on the cloud that can be accessed and edited by all participants in real time. The API system, by contrast, allows banks to access each other’s data on a bilateral basis, ensuring the recipient’s account information is correct before it is sent in an effort to reduce delays.

“We know that there are still some payments which are badly formatted and missing some information,” said Luc Meurant, chief marketing officer of Swift. “Instead of correcting that later in the chain and delaying payment, we are trying to anticipate as many of those issues as possible (with prevalidation) so payments can be processed faster.” 

Swift estimated that around 10 per cent of all payments on its platform were held up because of errors. Manish Kohli, global head of payments and receivables at Citi, said the new system would “considerably reduce” the costs banks incur to resolve problematic payments and would improve customer experiences. That would “absolutely” allow banks to cut pricing and compete more effectively with fintechs, he added. 

Mr Meurant said that while the solution was going after “exactly the same kind of issues” as IIN, Swift’s fix was superior because its angle is “one of scale and industrialisation” and the solution could be rolled out to Swift’s 10,000-plus members relatively quickly.


JPMorgan Chase has been the leading voice on the IIN, but is also one of the 15 banks taking part in the Swift pilot. A spokesman declined to comment on the relative merits of the two projects and JPMorgan’s decision to back both. 

Mr Kohli said his bank, which has not joined the IIN, believed the Swift solution was more viable because APIs were already widely used within banks in applications such as sharing customer data to give people an aggregate view of their accounts in one place. 

“We felt this would be faster to scale,” said Mr Kohli, adding that payments solutions only really work if they are ubiquitous.

He pointed to Swift’s success in introducing its global payments innovation (GPI) as evidence that it can achieve quick adoption. GPI, which allowed payments to be tracked end to end and introduced transparency on fees, was introduced more than a year ago and is being used in more than 50 per cent of Swift’s payments. It will be used exclusively by 2020 by users of the Swift network.

Riaz Haq said...

#Alibaba's #Alipay's entry to tap great potential of #Pakistan #ecommerce market. US$184 million investment to expedite mass adoption of digital #payments in Pakistan. #Internet penetration rising with estimated 60 million subscribers of 3G and 4G. https://on.china.cn/2EO9fAc

Alipay, a subsidiary of Hangzhou-based Ant Financial, has been cleared by the Competition Commission of Pakistan (CCP) to acquire a 45 percent stake in Pakistan's Telenor Microfinance Bank.

The investment of over US$184 million will expedite widespread adoption of digital payments in Pakistan. With internet penetration continuously on the rise, there are an estimated 60 million subscribers of 3G and 4G in the country that can become potential users of the service.

Several mobile payment services are presently operating in Pakistan. Primarily, these have been offered by telecom operators with a large number of cellular subscribers. However, limited international application has kept the penetration rate of the payment portals relatively low. Entry of Alipay, the world's largest mobile payment platform, will intensify competition higher, improve the quality of service and reinvigorate the entire landscape of the industry.

Pakistan's growing young population makes it suitable for embracing cashless payments on a large scale. People under the age of 30 form 64 percent of the population who are always the most likely to take up any new technology. On top of that, high cellular phone use will be a facilitative factor, since the mobile-first strategy for internet-based businesses is very valid in Pakistan.

Commencement of Alipay's operations in Pakistan will also provide a major push to e-commerce. eBay CEO Devin Wenig recently identified emerging economies like Pakistan as the fastest growing e-commerce hubs of the world. The trend is spreading like wildfire across the country with new online shops emerging constantly. A reliable e-payment gateway with worldwide collaborators is all that Pakistanis need to streamline their online transactions.

Alibaba had already acquired Pakistan's leading e-commerce platform Daraz. Utilizing the reach of Alibaba, Pakistani sellers will now be able to connect with global buyer.

The digital payment boom will be most beneficial for small and medium-sized enterprises that form the backbone of the national economy. Many of these businesses face difficulties in financial transactions due to being located in rural areas. Alipay might prefer to focus on them as the Pakistani government wants to reduce their business costs and difficulties.

Across the border in China, a new policy is on the cards to increase e-commerce purchases from overseas. Around 63 additional categories are being added to a product list of what can be imported duty-free through online platforms. Moreover, 22 cities, such as Beijing, Nanjing and Shenyang, are also being included in e-commerce pilot zones.

With several food items in the revised e-commerce import list, there is much potential for Pakistani farm produce. Fruits like mango and the mandarin hybrid kinnow can gain extended reach in the Chinese food market and the recent push to increase meat and poultry production could further boost Pakistan's exports.

The targeted online shoppers in China are increasingly focusing on foreign brands. Large businesses and premium brands from Pakistan can reach out to these buyers through Tmall Global – another Alibaba operated e-commerce platform allowing Chinese consumers to purchase products from abroad. Pakistan's small to medium businesses might not have the logistic prerequisites for this platform, but international-standard large companies certainly can.

Ant Financial is coming to Pakistan at a time when trade between Pakistan and China is touching new heights through the flagship project of Belt and Road Initiative (BRI) known as China Pakistan Economic Corridor (CPEC).

Riaz Haq said...

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.

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“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.


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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.

Riaz Haq said...

Going cashless in Shanghai
By Jennifer Pak

https://www.marketplace.org/2019/01/15/world/going-cashless-shanghai

It’s been more than six years since the World Trade Organization ruled that foreign credit card companies should be able to operate freely in China, but it still hasn’t happened.

And it might already be too late for Visa, Mastercard and American Express to compete there. Only one in two people in China has a credit card, according to the People's Bank of China. The average American has 2.6 cards.

In major cities like Shanghai, residents can get by with just two mobile payment apps: Alibaba’s Alipay and Tencent’s WeChat Pay.

Mobile payment has exploded in China. In 2016, Chinese consumers made about $23 trillion (157.55 trillion yuan) worth of transactions through mobile payment platforms, according to the People's Bank of China. That compares to an estimate of just over $100 billion in the U.S. that same year.

Jennifer Pak, Marketplace China correspondent
Forms of payments used in the last 72 hours: Mostly WeChat Pay, Alipay

Places of purchase: Local vegetable and seafood market, fruit store, DiDi rideshare app, supermarket, e-commerce app Taobao by Alibaba, restaurants, Shanghai utilities

Items: Vegetables, seafood, meat, fruits, baking soda, taxi fares, children’s toy, utility bills, meals at restaurants

Cash use: Once, to pay for Chinese language lessons

Riaz Haq said...

How technology is driving financial inclusion around the world

https://www.worldfinance.com/banking/how-financial-technology-is-driving-financial-inclusion-around-the-world

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The vast majority of unbanked adults live in developing economies. Compared with developed nations, banks in these regions tend to have far fewer branches. For instance, in Pakistan there were fewer than 11 commercial bank branches per 100,000 adults in 2017, compared with 31 in the US, according to the World Bank.

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This financial flexibility helps families meet unexpected economic setbacks and allows entrepreneurs to invest in their businesses and create jobs, Wald added. “Most importantly, digital financial inclusion allows economies to grow stronger and more inclusive.” For this reason, countries like Pakistan have come up with financial inclusion strategies in recent years. Pakistan’s government adopted a National Financial Inclusion Strategy (NFIS) in 2015 that aims for 50 percent of adults to have bank accounts by 2020 – including 25 percent of women.

Out of Pakistan’s population of around 210 million, only 21 percent of adults had bank accounts in 2017, according to the World Bank. But with high mobile penetration rates, this could soon change: research by Financial Inclusion Insights (Fii) found that 84 percent of men and 71 percent of women in the country have access to a mobile phone.

--------------------

201m
Population of Pakistan
21%
of adults in Pakistan had a bank account in 2017
34%
of men in Pakistan had a bank account in 2017
7%
of women in Pakistan had a bank account in 2017


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Both Smith and Wald cited India as something of a success story for financial inclusion. Its cash-based economy quickly digitalised over recent years, and the rate of bank accounts opening has been “absolutely extraordinary”, Smith said.

In neighbouring Pakistan, however, many locals are still wary of financial institutions. In a 2015 survey by Gallup Pakistan, 65 percent of respondents said they would rather deal with someone they knew than a bank.

Rehan Akhtar is the chief digital officer of Karandaaz, a non-profit that promotes financial inclusion and access to finance for micro, small and medium-sized enterprises (SMEs) in Pakistan. He told World Finance that convincing Pakistanis to adopt digital financial services over cash would require new policies, including digitalising all government transactions and enabling an environment for e-commerce transactions.

NFIS has prompted a number of new initiatives, including mobile bank account schemes, biometric identity verification and the promotion of fintech services. These policies have already strengthened the country’s microfinance sector.
In Pakistan, Akhtar said SMEs account for over 90 percent of the country’s 3.2 million businesses and 30 percent of GDP. “As a consequence, growth of SMEs can have a direct impact on achieving the targets of poverty alleviation and sustainable growth for Pakistan’s economy.”------------------

Investors are increasingly realising the opportunity unbanked populations offer. For instance, Chinese payment provider Ant Financial bought a 45 percent stake in Pakistan’s Telenor Microfinance Bank (TMB) for $184.5m in 2018. Ant Financial aims to develop mobile payments and digital financial services at TMB, which owns Easypaisa.

Stephen Rasmussen, who leads CGAP’s work on sustainable digital financial-services ecosystems, argued in a blog post that Ant Financial’s interest in Pakistan could be a game-changer by “spurring other businesses to become more ambitious about increasing mobile wallet uptake and use” and “[establishing] an investment benchmark in the market that could encourage additional investment into other fintech businesses”.

Riaz Haq said...

#Pakistan's Woman-Led Startup Tez #FinTech Wins Visa Everywhere Initiative Women’s Global Edition After Worldwide Search. Tez is first fully #digital financial institution in Pakistan providing #financialservices to unbanked/underbanked via smartphone apps 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 St├ęphanie Fleury, provides basic financial services to the unbanked and underbanked individuals and businesses in Brazil, through their app, web-based internet banking and API platforms. Their goal is to promote financial inclusion to more than 115 million people through their B2B2C financial ecosystem.
PoshVine of Asia Pacific, represented by Garima Satija, helps financial services organizations increase customer loyalty and share of spends through contextual, personalized perks and rewards administration. They are building a coalition customer loyalty program through their network of more than 15,000 merchant partners whereby users can earn and easily redeem points using linked debit or credit cards.
Alloy of North America, represented by Laura Spiekerman, provides real-time identity and risk decisioning for financial services, including KYC/AML and fraud checks.

Riaz Haq said...

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.

Riaz Haq said...

The share of cash payments worldwide is falling rapidly, from 89% in 2013 to 77% today


High internet use and state support help countries ditch cash
Even within the rich world, the most digitised societies use cash least often

https://www.economist.com/graphic-detail/2019/08/01/high-internet-use-and-state-support-help-countries-ditch-cash

On july 27th, outside Brooklyn’s hipper-than-thou Smorgasburg street-food market, a dozen hungry visitors stand idle amid the barbecue fumes. Rather than queuing for food, they are waiting at a cash machine. Yet inside the market, vendors are trying to wean their customers off cash. Gourmets who use Apple Pay, a mobile-payment service, receive hefty discounts on their purchases. “Apple pays us the difference,” one trader explains.

Most transactions around the world are still conducted in cash. However, its share is falling rapidly, from 89% in 2013 to 77% today. Despite the attention paid to mobile banking in emerging markets, it is rich countries, with high financial inclusion and small informal economies, that have led the trend. Within the rich world, more-digitised societies tend to make fewer cash payments. In Nordic countries like Norway and Denmark, where 97% of people use the internet, around four out of five transactions were already cashless by 2016, according to a recent review chaired by Huw van Steenis of the Bank of England. In contrast, internet penetration in Italy is just 61%, and 85% of transactions there were still handled in cash in 2016.

Riaz Haq said...

Accion Venture Lab closes $33 million to invest in inclusive #fintech #startups. Tahira Dosani, MD of Accion Venture Lab, said that their investments are global with a focus on emerging markets investing in #UAE, #Pakistan, #MENA.
https://www.menabytes.com/accion-venture-lab-33-million/ via @MENAbytes

Accion Venture Lab has emerged as a leader in fintech impact investing by investing in tens of fintech startups around the world including Now Money from the United Arab Emirates and Tez from Pakistan. According to its statement, for every dollar Accion Venture Lab has invested, its portfolio companies have raised an additional $13 in equity capital from later-stage investors.

Tahira Dosani, the Managing Director of Accion Venture Lab, in a conversation with MENAbytes, said that their investments are global with a focus on emerging markets, adding that they have plans to continue investing in UAE, Pakistan, and other markets in the Middle East & North Africa.
Washington-based Accion Venture Lab, according to the statement, is typically the first institutional investor in its portfolio companies, providing both capital and extensive strategic and operational support across a broad range of functional areas.

Tahira, speaking to MENAbytes said that they invest in early-stage startups (with average cheque size of USD 500,000) that are leveraging technology or innovation to improve the reach, quality, and affordability of financial services for low-income and underserved individuals and small businesses, “Our initial investment in a startup is always at the seed stage, but we will follow-on in A and B rounds in companies we have invested in.”

Speaking about their portfolio companies (Now Money and Tez) in MENA & Pakistan, Tahira added, “We see a lot of potential in both these businesses. Tez provides consumer credit in Pakistan to individuals who struggle to access credit through other formal means. The loans Tez provides are critical for income smoothing and day-to-day management for their customers. NOW Money serves migrant workers in the UAE, providing them with a digital bank account, debit card, and the ability to send remittances digitally and quickly back to their families. We expect both of them to see continued growth over the coming years.”

“We’re seeing substantial growth in the amount of investment capital available for fintech startups from what we saw when Accion Venture Lab launched in 2012, but money isn’t enough,” said Venture Lab Managing Director Tahira Dosani. “Capital must be paired with strategic and operational support that is informed by a deep knowledge of the sector, target customer, and a deliberate focus on how new technologies can help the underserved build better lives. We can accelerate the growth trajectories of companies through our capital plus approach to investing.”

Michael Schlein, President and CEO of Accion, commenting on the occasion, said, “Despite progress, three billion people still have no safe or simple way to save money, get a loan to build a business, pay a bill, or protect their health and property with insurance. Fintech startups are finding new ways to provide products and services that help these underserved people. Yet often startups lack the capital and strategic support they need to grow and scale their impact. Accion Venture Lab addresses this need.”

Accion Venture Lab’s portfolio companies, according to the statement, offer potential to reach underserved communities by building solutions around insurtech, agricultural finance, digital lending, and personal financial management, ultimately supporting entrepreneurship, resilience in farming, gig economy and migrant workers, healthcare, transportation, and education.

Riaz Haq said...

Leading #Pakistani Bank Partners With #Ripple to Launch #Digital #Payments Solution. Faysal Bank Limited (FBL) has launched a digital payments solution through a partnership with #US-based Ripple, a #blockchain-based money transfer platform. #fintech
https://www.crowdfundinsider.com/2019/09/151318-leading-pakistani-bank-partners-ripple-to-launch-digital-payments-solution/

FBL is one of Pakistan’s largest commercial banks with over 220 branches nationwide and assets totaling $1.5 billion.

Announced on September 6, 2019, FBL’s partnership with Ripple was commemorated by a meeting in Karachi, Pakistan’s leading industrial and financial center. The business meeting was attended by Faysal Bank’s president Yousaf Hussain.

FBL, an Islamic private bank, has joined more than 200 financial institutions and payment providers that are using RippleNet, a decentralized global payments network for conducting fast and cost-effective cross-border transactions.

The leading Pakistani bank has reportedly been working on various initiatives aimed at supporting the development of a digital economy. FBL notably became the first major private Pakistani bank to introduce a virtual payment card in Pakistan in 2017.

FBL recently sponsored a one-day summit focused on electronic payments in Karachi, in order to spread “mass awareness about digital money.”

Pakistan’s regulatory authorities have not drafted guidelines for transactions involving cryptocurrencies. In 2018, the country’s central bank, the State Bank of Pakistan (SBP), ordered all local financial institutions to suspend services being offered to individuals and firms dealing in Bitcoin and other digital assets.

Riaz Haq said...

GSMA Report Highlights That #Mobile #Broadband Networks Now Cover 80% of #Pakistan, Representing a Great Opportunity To Deliver Life-Enhancing Services https://finance.yahoo.com/news/gsma-pakistan-government-together-harness-100000712.html?soc_src=social-sh&soc_trk=tw via @YahooFinance

Report Findings

Mobile technology is at the heart of digital transformation in Pakistan driving social development and economic growth. Digital transformation is underway in the country, with government and public institutions as well as private and development organisations using digital platforms to increase engagement and improve service delivery to its citizens.

Mobile broadband networks now cover 80 per cent of the population and 97 per cent of internet connections are mobile;
Pakistan has nearly 700,000 cellular IoT connections across areas including agriculture, clean energy and safe water solutions;
Mobile technology is the primary channel for digital financial services, digital birth registration initiatives, digital health solutions and digital learning;
The mobile ecosystem in Pakistan plays an increasingly important role in economic growth, contributing around $16.7 billion, equivalent to 5.4 per cent of GDP; and
Mobile operators and the ecosystem also provided direct employment to around 320,000 people in Pakistan in 2018.
Enablement of digital ecosystem is largely supported by timely policy interventions for the facilitation and enablement of the industry and most importantly the end-user.
Despite this progress, Pakistan still has much to do to realise its development aspirations as outlined in the country’s Digital Transformation initiative. The bulging youth in the country is the catalysing factor in the early realization of digital ecosystem, which is helping Pakistan in swiftly catching up with its neighbours in South Asia and countries in the Asia Pacific on several key human development indicators including education, health and gender equality. Meanwhile, rapid population growth, at nearly double the average for South Asia, could increase the pressure on existing infrastructure and services, undermining efforts to enhance social development.

Industry and Government Collaboration

Three key priorities were identified for stakeholders to enhance the impact of mobile-enabled digital transformation on Pakistan’s development aspirations:

Enhance digital and financial inclusion: Like all other developing countries and economies, Pakistan’s population is still in transition and the use mobile internet or have access to formal financial services is growing with a remarkable progress witnessed in the past few years, however, if timely actions are not taken for harnessing the benefits of digitalization and taking the opportunity to the grassroots, it may put the country at risk of missing out on the socioeconomic benefits of digital transformation. The exclusion gap cuts across gender, geographic, economic and literacy lines. For example, women are 37 per cent less likely than men to own a mobile phone.

The government, industry, tech companies and development partners are closely working to address the challenges related to connectivity, integration and modernization of telecommunication networks and services, leading to digital transformation and financial inclusion in the country.
A holistic approach to digitisation: The fragmented use of digital services by government agencies and development organisations, often leads to wastage and inefficiency in the use of resources. A whole-of-government approach to the planning and implementation of digital initiatives could increase the overall impact on society.
Use mobile platforms for national development plans: Pakistan's 12th Five-Year Development Plan runs from 2019 to 2024. There is a significant opportunity to incorporate mobile, particularly on efforts to improve areas such as gender equality, health, education and poverty reduction.

Riaz Haq said...

#Pakistan lays out #digital #payments strategy. It has been praised by #WorldBank president David Malpass, who adds that the SBP must be joined by other stakeholders in the drive for digital #financialservices. #fintech #FinancialInclusion https://www.finextra.com/newsarticle/34761/pakistan-lays-out-digital-payments-strategy via @Finextra

The State Bank of Pakistan has set out a new, digital-focused, national payment systems strategy designed to boost financial inclusion, particularity for women.

Cash still dominates Pakistan's economy, with most wages paid in paper money and merchants largely unable to accept digital payments. Just 21% of adults have a transaction account and of these only seven per cent are women.

With such a low base, the central bank claims that migration to electronic payments will stimulate consumption and trade, boosting Pakistan's economy by as much as seven per cent and creating four million jobs by 2025.

Governor Reza Baqir says the bank will strengthen the country's legal and regulatory framework to bring it in line with international best practices, laying the groundwork for a "modern and robust digital payments network".

Rules are already in place for the digital onboarding of merchants to encourage acceptance of non-cash payments, while the central bank is also developing a faster payments system. The government will continue to move towards electronic payments, possibly creating a shared platform for all disbursements and collections.

The strategy has been praised by World Bank president David Malpass, who adds that the SBP must be joined by other stakeholders in the drive for digital financial services.

Riaz Haq said...

#Pakistan plans cashless society. State Bank to to install additional 1 million #digital access points over 3 years. A Micro #Payment Gateway is being implemented in collaboration with the Bill and Melinda Gates Foundation for faster #retail #payments. https://nation.com.pk/20-Jan-2020/pakistan-adopts-roadmap-towards-cashless-society-report

A roadmap has been brought in practice in government's circles to take the country towards a cashless society, reports Gwadar Pro Mobile News Net. The State Bank of Pakistan (SBP) earlier launched the National Payment Strategy System (NPSS) in order to build a road map and action plan for Pakistan to have a modern and robust digital payments network.

According to the report, the key goal of the strategy is to make the access of the people easier to financial services while helping them to improve financial inclusion in the country, particularly for women, along with greater documentation of the economy.

Therefore the SBP aimed to develop a faster payment system that would simplify the requesting, receiving and sending of payments in the country.

The State Bank of Pakistan in collaboration with the private sector, would increase the number of digital access points for making easy payments and plans to install additional one million digital access points over the next three years. SBP also claimed that migration to electronic payments will stimulate consumption and trade, boosting Pakistan's economy by as much as seven per cent and creating four million jobs by 2025. The Micro Payment Gateway is being implemented in collaboration with the Bill and Melinda Gates Foundation to ensure faster retail payments.

Meanwhile the World Bank also extended its full support to the central bank in implementation of key economic reforms and action items as highlighted in the strategy. Cash still dominates Pakistan's economy, with most wages paid in paper money and merchants largely unable to accept digital payments. Only 21% of adults have a transaction account and of these only seven percent are women. In developing countries like Pakistan, transparent cashless digital transactions can instill greater confidence in international investors.

Pakistan can acquire much from other developed countries like China to further boost the digital payment system, which is still in its infancy, as the latter has an immense knowledge base, experience and advanced technology in this field.

China's estimated 890 million unique mobile payment users made transactions totaling around $17 trillion in 2017—more than double the 2016 figure. The number of people making mobile merchant payments raised to 577 million in 2019 and expected to touch almost 700 million in 2022.

Beside many advantages coming with it there are also few challenges and issues with digital payments in country like Pakistan. For example, cyber security remains a key focus area of the central bank as keeping the system protected from cyber-attacks is a major challenge. Issues related to internet connectivity, power infrastructure, digital payment set-ups and lack of necessary insight among wider society can constrain the outreach of digital transactions. Cash is not an option but a necessity for a major chunk of our population, as only 21% of Pakistanis have access to formal financial services.

Therefore, cashless economy cannot be imposed rather it has to be gradually adopted by general public for successful implementation. The application also needs to be very simple and easy to use so that everyone can understand.

Riaz Haq said...

Digital payment and banking technology provider i2c has been tapped to fuel Pakistan’s first “digital-native financial super app” TAG, which is set to roll out in the first quarter of 2021, according to a Tuesday (Jan. 5) announcement emailed to PYMNTS.

https://www.pymnts.com/news/international/2021/i2c-chosen-fuel-pakistan-first-digital-native-financial-app/

"i2c’s tech stack provides us a sound foundation for enabling the kind of innovative, safe and secure payments experiences we’re bringing to market,” TAG CEO Talal Ahmad Gondal said in the announcement.

TAG provides instant payments capability to Pakistan’s unbanked adult population of roughly 100 million. The app includes features like mobile top-up, bill payment, automated teller machine (ATM) access, and the capacity to send and receive funds immediately without charges to anyone with a TAG account and tools to keep track of spending. The firm’s roadmap includes expansion to the Middle East and North Africa.

"We're thankful for TAG’s selection of our platform and for the opportunity to play a role in helping bring digital financial services to so many people," Aurangzaib Khan, i2c’s general manager for the MEA region, said in the announcement.

The news comes as Pakistan experienced a sizable rise in remittances from nationals working in other countries in July, showing a rare case of the pandemic helping a country’s economy.

"More good news for Pak economy,” Pakistan Prime Minister Imran Kahn tweeted in August. “Remittances from overseas Pakistanis reached $2,768 mn in July 2020, highest-ever amount in one month in the history of Pakistan. This is 12.2 percent increase over June 2020 and 36.5 percent increase over July 2019.”

As the worldwide pandemic and ensuing economic disruption have blurred the boundaries between traditional means of payment, i2c CEO Amir Wain told PYMNTS in November the largest business opportunity ahead will be in credit, with mobile becoming the largest game-changer.

“The stars of financial services in 2021 will have something to do with credit,” Wain said, adding the days of the simple checking or demand draft accounts (DDA) are over. “You can’t be a star with the DDA in 2021.”

-----------
i2c Inc. drives innovation to the global digital payments and open banking industry with a multi-function platform built for endless possibilities. Advanced “building block” processing technology at its core provides a vast suite of credit, debit and prepaid solutions—all from a single global SaaS platform. This enables clients to dynamically configure payment solutions with unparalleled flexibility, agility and performance while maintaining highly secure and reliable payments.

Founded in 2001, and headquartered in Silicon Valley, i2c’s next-generation technology helps organizations drive revenue growth, scale and adapt to change while supporting millions of users in more than 200 countries and territories and all time zones

https://www.linkedin.com/company/i2c-inc/

Riaz Haq said...

As founder and CEO of i2c, Amir is responsible for defining a clear vision and setting strategic direction for the company. Recognized as a pioneer in the prepaid/stored value industry, Amir founded software development firm Innovative Private Limited in 1987 and led the global launch of the transaction processing platform FastCash. Propelledby the success of Innovative, he founded i2c, Inc. in 2001 to bring next-generation processing solutions to the payments industry. Contributing to the company’s expansive growth curve, under Amir’s guidance, i2c has introduced a number of industry firsts, including card-linked offers, event-driven account holder communications and gift card voice personalization.
Today, as market opportunities for payments & emerging commerce continue to expand at a dramatic rate, Amir is leading i2c’s continued push to innovate the enabling infrastructure and solutions that transform commerce. Today’s consumers want choices, and Amir’s vision is to build the flexible solutions they seek in an increasingly mobile and global world.

----------------

I was born in Pakistan and before I could legally purchase beer, I came to the US to the University of Texas in Arlington to do my computer science and engineering. So it was an interesting journey coming across the globe to a new place, not knowing anyone. And, I thought besides the education in the class, just being in a new place at that age was a great learning for me. So really, really enjoyed my time and I learned a lot, and I really would call myself a serial entrepreneur because I never really worked for anyone right after college. And in fact, even during my last 18 months at college, a friend of mine and I were doing custom coding and doing projects for people. And as I graduated, I went back to Pakistan to be with my parents and saw a tremendous opportunity in terms of exposing the power of personal computing to the corporate world. And I'm talking 1986 so the IBM XT had come out, Lotus 123 was there, and it was a 10X change on the old way of doing things and just showing people some use cases and how all of this could be used was number one, extremely exciting and offered tremendous benefits to the other party. And, so that kind of got me thinking about starting a business and we started with a training program of computer appreciation for the senior executives. And I started doing this multi-day course for the senior management at large organizations and from one referral to another, that got the business going.

So, everyone kind of loved the spreadsheet aspect but then they would have problems that couldn't be solved by a spreadsheet, like inventory management, anything which has historical data and so on. So, we started getting business for custom software development and from there, it was more and more focused on the finance sector and we did a lot of work for banks in that space doing custom software development. And, currently I am based in the Bay area. I've been here since 2001, beginning of 2001, so just after the dotcom party ended. So, it was a good time and it's been a fantastic journey since then. And i2c was my third business that I started. So, between 1986 and 2001, and the other two businesses still operate successfully, with one of them traded on the stock exchange. The other is run by management. I’m on the board and spending most of my time at i2c that I'm very actively engaged with, and since then I've invested in a couple of other businesses and help them get started. So absolutely entrepreneurship I think is one thing that I have kind of seen and had in me throughout this journey.

https://leadersinpayments.com/show-notes/f/amir-wain-ceo-of-i2c

Riaz Haq said...

Pakistan has unveiled a new instant digital payments system, called Raast, that is aimed at boosting digitalisation within the country's economy.


https://www.zdnet.com/article/pakistan-launches-new-state-run-digital-payments-system/


The new digital payments system is being touted by the Pakistani government as an easy-to-use, efficient, and cost-effective payment option that will provide opportunities to small businesses and those without easy access to payments systems.

Developed by the country's state bank, in collaboration with the Bill and Melinda Gates Foundation, the Raast project was created after a review revealed that individuals living Pakistan who are financially excluded and less privileged, like women, did not have access to fast payments systems, Governor Falah Baqir said.

According to the state bank, men in Pakistan are roughly five times more likely than women to have a bank account and, of the poorest 40% of the population, just 14% have an account.

"I hope that in years to come we will look back and see this new digital public good as an important contribution to our shared goal of giving all people the tools they need to lift themselves out of poverty," Bill Gates said in a statement.

Raast will be rolled out in three phases. The first phase, which commenced at the start of the week, includes a bulk payment module that will allow for the digitisation of dividend payments, salaries, pensions, and other payments from government departments.

In the next phases, Raast will digitise payments of micro and small business owners or merchants, which will allow them to pay suppliers on time and fulfil other urgent payment obligations, the state bank said.

The new payments system will eventually provide person-to-person payments, including features such as sending requests for payments and initiating payments using identifiers such as phone numbers or any other alias.

Riaz Haq said...

The new system is called "Raast," or "direct way," and will be rolled out in three phases culminating in early 2022, according to the news outlet. The system was developed over a period of years by a collaboration between the State Bank of Pakistan and the Bill & Melinda Gates Foundation.

https://www.pymnts.com/news/international/2021/pakistan-launches-payment-system-to-boost-financial-inclusion/#:~:text=The%20system%20was%20developed%20over,the%20Bill%20%26%20Melinda%20Gates%20Foundation.&text=The%20Raast%20system%20was%20also,Britain%20and%20the%20United%20Nations.


With the new feature, merchants, businesses, individuals, FinTechs and government entities will be able to utilize real-time payments via the internet, mobile phones and agents, alongside government payments like salaries and pensions, Reuters writes. Payments for nationwide financial support programs, like the Benazir Income Support Programme and the Ehsaas Emergency Cash programme, can also be made through Raast, Reuters reports.

The Raast system was also supported by the World Bank, Britain and the United Nations. One goal for the company, according to Reuters, is to boost the role of women in the formal economy.

Also, while there are several private-sector digital cash transfer systems like JazzCash, which is operated by telecommunications company Jazz, or Telenor Pakistan's Easypaisa, Raast would be the first one to link government entities and financial institutions together.

“I hope that in years to come we will look back and see this new digital public good as an important contribution to our shared goal of giving all people the tools they need to lift themselves out of poverty,” Bill Gates said in a statement read out at the announcement on Monday, according to Reuters.

This isn't the only digital upgrade Pakistan will be receiving soon, as i2c has been tapped to work on the country's first digital-native super app, PYMNTS writes. The app, called TAG, will work to provide assistance for the 100 million Pakistan adults who are unbanked.

Riaz Haq said...

#Pakistan PM #ImranKhan rolls out ‘Raast’ #digital #payments initiative to move to cashless #economy. The initiative is part of PM's “Digital Pakistan Vision” aimed at including the poor segments of society in the formal economy. #DigitalPakistan https://tribune.com.pk/story/2279540/pm-rolls-out-raast-initiative-to-move-to-cashless-economy

The country took another step towards the digital world on Monday with the launching of Raast – Pakistan’s first instant payment system that enabled end-to-end digital payments among individuals, businesses and government entities within seconds.

Prime Minister Imran Khan launched the Raast at a ceremony here. The initiative is part of the prime minister’s “Digital Pakistan Vision” aimed at including the poor segments of society in the formal economy.

“Raast is a big step towards realising Pakistan’s potential; it will help the country move from cash economy to digital economy and help the government to collect more taxes when formal transaction channels are utilised more,” Imran said, addressing the launching ceremony in the federal capital.

Imran said that cash economy was one of the biggest hurdles for a country of 222 million to take full advantage of its potential. “Cash economy’s biggest disadvantage is tax collection; Pakistan collects the lowest tax in the world,” he said.

The prime minister regretted that only 2 million people paid taxes in a country of 220 million population, while the top-3,000 taxpayers paid 70% of the total taxes. “This is not enough to build hospitals and schools, and provide other basic facilities of life for the common man.”

The prime minister hoped that Raast will slowly and gradually take the country away from the addiction of cash economy to the digital economy and enable the country to take full advantage of its people. He said that Raast programme would take government’s other initiatives, including Ehsaas, ahead.

“The real target is to boost formal economy and our biggest problem is that we have a big informal economy,” he said, adding that the government could neither collect taxes in the presence of a big informal economy nor the country could progress. “Without revenues, there is no progress,” he said.

Prime Minister Imran said that “Pakistan can’t build infrastructure; can’t invest in human development; unable to provide education to children; can’t improve healthcare infrastructure” just because it lacked financial resources.

“The country which was making rapid progress in the region 50 years ago can’t move ahead because we don’t have enough financial resources,” he said, hoping that “Raast will take the country away from addiction of cash economy.”

Imran lauded the step of including the poor segments of society, women and overseas Pakistanis in Raast, saying it was also a big step. “Opening women’s accounts is a big step as it would help them progress,” he said, adding that women in rural areas were affected the most by poverty.

He lauded State Bank of Pakistan (SBP) Governor Reza Baqir, his team and several others, who made the project a reality. He encouraged them to keep thinking about bringing more remittances through formal channel and shifting more and more people from cash economy to digital one.

He thanked Queen Maxima of the Netherlands for taking interest in the programme and wellbeing of Pakistan, especially, in women living in deprived areas and wanting their financial inclusion in Pakistan. He also thanked the Gates Foundation, British High Commission and the World Bank for providing help to Pakistan.

In his address, the SBP Governor said that Raast would make payments secure, while the banks and monetary institutions will get benefits as it provided fast and cheap digital payment option for customers.

He added that it had been developed on international best practices as it would connect government institutions instantly, which meant that salaries, pensions as well as savings could instantly be paid through it.

Riaz Haq said...

Digital transactions record robust growth


https://www.dawn.com/news/1653511

According to the State Bank’s latest Annual Payment Systems Review (PSR) for FY21 issued on Friday, the transactions processed through the SBP’s large-value payments segment, known as Real-time Inter-Bank Settlement Mechanism (PRISM), recorded a growth of 60 per cent by volume and 12.8pc by value.

As of June 30 this year, the PRISM system had 51 direct participants — 34 banks, seven microfinance banks, nine development finance institutions and one non-bank entity (Central Depository Company). During FY21, PRISM processed 4.2 million transactions amounting to Rs444.6 trillion.

Riaz Haq said...

#Finnish fund buys 17.6% stake in TPL #Insurance in #Pakistan. The size of #Finnfund #investment is $3 million, which amounts to Rs632.8 million at the current exchange rate. https://www.dawn.com/news/1699871

KARACHI: TPL Corporation said on Friday a Finnish fund has successfully completed the transaction to acquire 17.59 per cent shareholding in TPL Insurance, a subsidiary of the Pakistani conglomerate.

Speaking to Dawn, TPL Insurance Ltd CEO Muhammad Aminuddin said the size of the transaction is $3 million, which amounts to Rs632.8 million at the current exchange rate.

Finnish Fund for Industrial Cooperation Ltd, a private firm incorporated in Finland, was originally going to invest roughly Rs540m in the Pakistani insurer through a special rights transaction. However, the investment size increased in the local currency because of the recent depreciation in the exchange rate.

“The investment will come through the issuance of new shares for which we’ve received approval from the regulator,” said the CEO.

Finnfund is a development financier and impact investor that buys stakes in “responsible and profitable” businesses in developing countries.

This is the second investment by an “impact investor” in TPL Insurance, which also raised last year an equity equalling 19.9pc of share capital from DEG, the private equity arm of the German government. The technology-driven business model of TPL Insurance supplemented by the Finnish fund’s global experience and knowledge will result in new product lines, a regulatory filing said.

According to the annual report for 2021, TPL Corporation and TPL Holdings held a collective stake of 64.38pc in TPL Insurance. After the transaction, the stake of the TPL Group in the insurer will reduce to 52pc, said Mr Aminuddin.

Riaz Haq said...

Non-bank finance firms disbursed over Rs6.14bn loans digitally

https://www.dawn.com/news/1673391/non-bank-finance-firms-disbursed-over-rs614bn-loans-digitally


Licensed digital lending Non-Bank Finance Companies (NBFCs) have made rapid progress and started to show disruption in Pakistan’s lending landscape and are proving to be significant in furthering the journey of financial inclusion, data shared by the Securities and Exchange Commission of Pakistan (SECP) showed on Friday.

The SECP has licensed six fintech-enabled NBFCs, which have collectively reached out to 365,239 borrowers with disbursement of over Rs6,139 million through 858,998 loans, which signifies that many borrowers have obtained more than one loan from these lenders.

The data released by the SECP shows that the average loans size of these digitally-enabled NBFCs ran­ges from Rs1,000 to Rs80,000 depen­ding upon the nature of business and target market of these entities.

“These are small loans available easily for the borrowers, but since these are digital-based, the borrowers cannot default and ignore the repayment,” said a senior official of the SECP adding that the data of defaulters is shared with the State Bank of Pakistan as a result the defaulter cannot avail any other financial service.


The official added under this lending mode, the small amount request by the borrower is credited into the digital wallet of the borrower within few hours as digital processing of the loan is fast and does not require any guarantee.

Newly licensed digital lending NBFCs include Finja Lending Ser­vices Limited, SeedCred Financial Services Limited, Qisstpay BNPL Limited, Tez Financial Services Limited, Cashew Financial Ser­vices Limited and CreditFix Fina­ncial Services Limited. These NBFCs are providing financial solutions to otherwise unserved and underserved through digital means and include Nano lending, Peer-to-Peer (P2P) Lending and Buy-Now-Pay-Later models etc.

All of these licences have been issued during the last three years to NBFCs that are engaged in digital lending using innovative fintech solutions.

The first fintech-enabled NBFC licence was issued in 2019 and only 55,528 requests were honoured, disbursing Rs495 million, while by the end of 2021, the six licence holders disbursed a total of Rs6.13 billion to 365,239 borrowers.

“This is a solution to the traditional complaint that the banks were not interested in small loans, and the majority of borrowers were those who either did not possessed credit cards or wanted to spend the amount in any sector which does not deal in credit cards,” the official added.

The SECP has said that fresh applications have been received for NBFC licence from investors who intend to engage in fintech based lending.

Riaz Haq said...

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.

Riaz Haq said...

Pakistan’s Digital Lending Revolution
Not only is increased digital lending the need of the hour, it is also a very attractive business proposition.

https://aurora.dawn.com/news/1144545/pakistans-digital-lending-revolution

The cruel spiral of poverty plagues generations once it takes grip. It takes money to make money. This is especially true of emerging and undocumented economies like ours. It takes money to educate one’s children, without which income prospects greatly diminish for the next generation. It also takes money for a small business owner to invest in stock or supplies. Without this, no income is generated from the business which feeds a disproportionate number of people downstream. Often, health issues can devastate families and their fortunes because a head of household was not able to afford medical treatment.

Poverty is not new. However, we have, for the first time in history, witnessed such a massive and rapid deliberate reduction in the world’s poverty. China systematically lifted 800 million people out of its poverty spiral over a relatively short 40-year period. There are many lessons in this for Pakistan, the biggest of which is that it is indeed possible to turn the corner for our people.

China relied heavily on digital technologies that financially included a significant portion of its population, and also connected them for commerce with each other. Mobile smartphone penetration, online connectivity, digital payments, and online commerce became key catalysts of income mobility. The ensuing digital footprints paved the way to provide credit to people who were previously undocumented and thus un-lendable. There is no debate now that access to credit is one of the most effective ways to reduce poverty. And today, digital access to credit can reduce poverty at scales and speeds previously unimaginable.

Pakistan has recently undergone its digital revolution. Today 80% of adults in Pakistan have access to internet-connected smartphones. About a third have made digital payments. Seventy percent of new bank accounts over the last five years were contributed by mobile wallets. Our chowkidars, mazdoors and corner store owners are all on WhatsApp and avidly consuming TikToks. E-commerce, although still relatively small with a market size of about six billion dollars annually, has shown one of the fastest growths globally. Key catalysts of income mobility are now present for us to take advantage of.

So why do less than two percent of our population receive loans from formal financial institutions? Because formal financial institutions employ traditional ways of establishing creditworthiness, by collecting documents. The size of our undocumented economy is at least as large as our formal economy and comprises the vast majority of our population. With no signals of creditworthiness, money is not lent. With poor signals of creditworthiness, money is lent but de-risked by pledging tangible assets, which are uncommon among the poor.

The scarcity of credit given by banks to consumers and small businesses is further compounded by the fact that it is hard work to give small loans with cumbersome and expensive physical processes. There is little incentive to serve these key segments, especially compared to the easy, safe and large lending appetite of our government. Nearly three-quarters of all the money deposited across banks is given to the government in the form of loans or investments by banks. This voracious appetite and easy profit from the government has crowded out private sector needs.

Riaz Haq said...

Pakistan’s Digital Lending Revolution
Not only is increased digital lending the need of the hour, it is also a very attractive business proposition.

https://aurora.dawn.com/news/1144545/pakistans-digital-lending-revolution


The good news is that the recent influx of venture capital into start-ups has led to the emergence of many new innovative financial technology (fintech) companies to solve these problems. Signals such as salary information, sales receipts and supply purchase data are being digitised and leveraged to establish creditworthiness with great success. Pakistani innovators benefit from the learnings from other emerging markets that previously cracked these problems with great success, including China, Indonesia, Africa and others. It should be no surprise that digital lending has started to make great progress in Pakistan.


For digital lending to truly take off in Pakistan, three key pieces of the ecosystem need to come together in a symbiotic manner: banks or money suppliers, fintechs and digital data-generating platforms. Banks are flush with cheap deposits from zero mark-up current accounts and therefore have the capital to lend. Fintechs, whose licences are governed under progressive lighter weight regulations, efficiently package small business and consume uncollateralised loans by acquiring and scoring them digitally. And finally, the platforms that collect the digital footprints of small businesses and consumers through transactional workflows, provide reliable signals for lending. They also embed financial services from fintechs into their platforms. The good news is that there are already several examples of all three stakeholders collaborating to lend in Pakistan with stellar results.

Pakistan’s five million micro and small businesses are stuck in a stagnant cash flow-starved hand-to-mouth status quo. Yet, they constitute 40% of our GDP and employ almost 80% of our non-agricultural workforce. Small and medium-sized enterprises (SME) lending data from fintechs shows that access to capital increases SME income by an average of 30%. Digital lending at scale to small businesses will have a tremendous impact on our economy, employment and standard of living. Similarly, less than 0.35% of people have received housing loans and consequently, home ownership remains dismally low. It is clearly in the country’s interest for responsible digital lending to take off.

Not only is increased digital lending the need of the hour, but it is also a very attractive business proposition. We have seen the entry of several well-funded foreign lending apps that have sprayed thousands of loans using sparse scoring data. As a result, their first cycle loan losses are exceptionally high, requiring expensive pricing to cover defaults. Many of these apps are unlicenced and engage in predatory practices. Customers are misled through claims of reasonably priced loans while hidden fees result in expensive triple-digit markup rates. Furthermore, the address books of customers are often harvested and their contacts are harassed if loans are not repaid on time. Most people who take loans from these apps are first-time borrowers with little financial literacy and can easily become over-indebted. Access to affordable credit with dignity is an important measure of a society’s evolution.

Riaz Haq said...

Pakistan’s Digital Lending Revolution
Not only is increased digital lending the need of the hour, it is also a very attractive business proposition.

https://aurora.dawn.com/news/1144545/pakistans-digital-lending-revolution


Clearly, increased regulatory oversight is urgently needed to keep pace with the innovations in digital lending that we are seeing in the field. Informal players like these loan apps and your local electronics store do not share loan repayment behaviour with credit bureaus. This results in financial institutions approving loans that are unlikely to be repaid, ruining future credit access to a vulnerable segment that can benefit most from them. This must be carefully monitored and regulators must encourage lenders to utilise high-quality data to minimise defaults and keep loans affordable for greater impact. For example, low default rates of working capital loans that leverage actual business transactional data through embedded digital workflows allow small businesses to negotiate better rates. These digital loans scored using rich data give power back to small business owners who can in turn profitably grow their businesses and hire more workers.

In addition, as data becomes more sought, stored, and potentially shared, our consumer data protection laws will be tested and likely need to be updated. We will inevitably hear about large-scale data breaches and their aftereffects. While data leaks must be prevented and privacy protected, platforms across the ecosystem must also integrate and share data responsibly. This must happen with consumer consent. Combined data sets will produce richer signals to unlock more opportunities. Seldom in human history have we had such powerful tools to uplift our population in such a short period. One hundred and ten million digitally connected and transacting Pakistanis will produce rich footprints to enable lending for themselves and their businesses. When regulated and executed responsibly, digital lending has the potential to uplift millions of Pakistanis out of poverty and significantly raise Pakistan’s GDP. Amid the doom and gloom, exciting times lie ahead.

Riaz Haq said...

Investors, including HBL, participate in Finja’s Series A2 Funding Round
Finja, Pakistan’s largest dual-licensed SME digital lending platform, announced fresh capital injection as part of its $10 Million Series A2 financing round, with participation from notable investors including Sturgeon Capital and HBL.


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.”

Riaz Haq said...

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

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

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.

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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.

Riaz Haq said...

Pakistan:Insurance market grows by nearly 22% in 2021
https://www.asiainsurancereview.com/News/View-NewsLetter-Article?id=82438&Type=eDaily

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

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Riaz Haq said...

Pakistan cracks down on sketchy digital lending

https://techcrunch.com/2022/12/28/pakistan-cracks-down-on-sketchy-digital-lending/


Pakistan’s markets regulator issued new guidelines for digital lending in the country, cracking down on several sketchy practices that it said have become prevalent in the South Asian market.

The Securities and Exchange Commission of Pakistan said Wednesday evening that non-banking finance companies that disburse loans through digital channels, including mobile apps, will be required to disclose key fact statements such as the credit amount they are granting to consumers, annual percentage rates, duration of the loan and “all fee and charges.”

The non-banking finance firms will be required to share these key facts with consumers through audio or video and emails and text messages in both English and Urdu languages. “Any fee not included in key fact statement will not be charged to the borrower,” the regulator said (PDF) in a press release.

These firms will also not be able to access borrower’s phone book or contacts lists or pictures on the device “even if the borrower has given consent in this regard,” the regulator said. (You can read the full guidelines here {PDF}.)

“The lender shall also not be allowed to contact the persons in the borrower’s contact list, other than those who have been specifically authorized by the borrower as guarantors and who have also provided their consent to the digital lender at the time of loan approval,” it added.

The move follows the regulator noticing a rise in mis-selling, breach of data privacy and “coercive” recovery practices of licensed digital lending companies” and to safeguard public interest, it said.

Neighboring nation India also introduced strict rules surrounding digital lending in a move that has toppled the local fintech industry.

https://www.secp.gov.pk/document/circular-no-15-of-2022-requirements-for-nbfcs-engaged-in-digital-lending/?ind=1672222021650&filename=Circular-No.15-of-2022..pdf&wpdmdl=46436&refresh=63ac43d13db561672233937

Riaz Haq said...

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.

Riaz Haq said...

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.

Riaz Haq said...

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).

Riaz Haq said...

HugoBank Appoints Atyab Tahir as CEO to Build a Digital Bank in Pakistan

https://finance.yahoo.com/news/hugobank-appoints-atyab-tahir-ceo-020000099.html

Atyab Tahir brings over 2 decades of local and international experience in fintech and digital financial services to help build a digital bank in Pakistan

HugoBank expects to increase Pakistan's bank account penetration rate to over 80% and to open 34 million new accounts by 2027

SINGAPORE, March 27, 2023 /PRNewswire/ -- HugoBank, Pakistan's latest digital bank led by a Singapore Consortium, today announced the proposed appointment of Atyab Tahir as Chief Executive Officer, subject to the State Bank of Pakistan's fit and proper assessment. Following the company's incorporation, Atyab will set-up and lead HugoBank in Pakistan to offer digital banking services to people and small businesses across the country.

Atyab brings over 20 years of business experience and deep industry knowledge to drive HugoBank's mission in Pakistan. Prior to HugoBank, Atyab led Jazzcash and served as a country head for Mastercard. He has also held senior positions with Tameer Bank and HBL where he focused on innovation and growth. With his vast experience in banking and fintech in Pakistan, the Middle East and New York, Atyab brings the best of both industries complete with a rich understanding of the local market and its needs.

"I am thrilled to lead HugoBank at the beginning of its journey in Pakistan and am confident that our digital bank will catalyse financial inclusion and wellness for the people of Pakistan. I am excited to assemble a team to build a customer-centric bank focused on offering accessible, convenient, and secure digital financial services to underserved individuals and SMEs alike," shared Atyab Tahir, Chief Executive Officer of HugoBank.

HugoBank will promote financial inclusion and literacy in Pakistan, offering products and services at price points that are accessible to everyone. The consortium aims to help Pakistan to achieve an 85% bank account penetration within five years, up from the current 16.29%[1] and is expected to open 34 million new accounts by 2027.

Pakistan has one of the lowest credit adoption rates in the financial sector, with only 2.4% of its population having access to credit from formal financial sources and 53% of the country's 220 million population currently financially excluded. Recognising the challenges faced in Pakistan, HugoBank is committed to introduce its state-of-the-art financial platform that will provide customers with an easy and convenient way to safeguard their money. With HugoBank, financial inclusion and literacy will become more accessible, ultimately contributing to the economic growth and wellbeing of the country.

Led by Singapore's Atlas Consolidated, which owns and operates the fast-growing WealthcareⓇ and savings app Hugosave, HugoBank is a joint venture formed in partnership with The Getz Group and Muller & Phipps. It received its No-Objection Certificate by the State Bank of Pakistan in January this year.

David Fergusson, CEO of Atlas Consolidated said, "We are pleased to welcome Atyab Tahir as the new CEO of HugoBank. With his extensive experience and deep understanding of the market, we are confident that he will lead HugoBank in promoting financial inclusion and literacy in Pakistan and help improve the lives of millions across the country. We are excited to work with him to provide and share international best practices and platforms to drive a positive change in the financial landscape and client's Wealthcare®."

Riaz Haq said...

#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.