PakAlumni Worldwide: The Global Social Network
Pakistan's Fintech Revolution to Promote Financial Inclusion
Pakistan is ranked 16th among 26 nations ranked by Brookings Institution with an overall score of 69% in "The State of Financial and Digital Inclusion Project Report" for 2017. As the world observes the "World Financial Inclusion Week" this week (October 30-November 3, 2017), the Internet revolution is enabling rapid growth of financial technology (fintech) for increasing financial inclusion in Pakistan. The purpose of the observance of the week is to "hold conversations focused on how new products and partnerships are advancing financial inclusion, not just access", according to the Center for Financial Inclusion. It is important for Pakistan where about 100 million adults lack access to formal and regulated financial services.
Importance of Financial Inclusion:
Access to regulated financial services for all is essential in today's economy. It allows people to save, borrow and invest. Those who lack access to regulated banking services are often forced to resort to work with unscrupulous lenders who trap them in debt at unaffordable rates. Such loans in extreme cases leads to debt bondage in developing countries. Financial inclusion is good for the individuals as well as the national economies. It spurs economic growth and helps document more of the economy.
Easypaisa:
Fintech (financial technology) is bringing financial services to the unbanked population through non-bank institutions licensed by the State Bank of Pakistan, the top bank regulator in the country. One example of a non-bank is Telenor Pakistan, a leading mobile phone service operator, offering financial services via a large network of agents, currently over 70,000, far exceeding the total number of branches of all the banks in the country.
Easypaisa, a service operated by Telenor Pakistan, offers basic financial services like open a bank account, deposit or withdraw money, transfer funds, make mobile payments and pay utility bills.
Karandaaz:
Another important player promoting financial inclusion is Karandaaz Pakistan , a non-profit organization, set up by UK’s Department for International Development and Bill and Melinda Gates Foundation. It is providing grants to a number of local initiatives to develop and promote financial technology solutions in Pakistan.
Karandaaz Pakistan is promoting Fintech startups in 5 areas of focus:
1) Access to Financial services
Credit Scoring Models, Formalize savings through need based products, Digital lending services, and Insurance
2) Payments
Retail payments solutions through QR code, Supply / Value Chain Digitization, Ideas around digitization of online payments and merchant payments
3) E-Commerce
Smoothening of on-boarding process, Enabling Escrow Accounts for a retail merchant, Alternate payment modes other than COD
4) Interoperability
Innovative ideas to address the lack of interoperability among m-wallets
5) Early stage ideas related to:
M-Wallet Use cases, Education of Financial Services through technology, Customer Engagement / Experience, Micro Credit, Digital Savings
Finja's SimSim Mobile Payment:
Finja is a Pakistani fintech startup that recently introduced SimSim app for mobile payments. It's the first such application that has received approval of the State Bank of Pakistan. Finja has raised $1.5 million in venture funds so far. SimSim uses NADRA, a biometric citizen identity card that the Pakistan government has issued to almost its entire adult population, comprising around 60 percent of the total population of 207 million.
Private Credit Bureaus:
Credit data and scoring are essential to facilitate risk assessment and lending by financial institutions.
Under the Credit Bureaus Act, 2015, privately-run credit bureaus can collect and disseminate the credit data from both financial and non-financial institutions including retailers, insurance companies, utility providers and landlords, as notified by the federal government, according to Muhammad Akmal, Director of Banking Conduct and Consumer Protection Department at the State Bank of Pakistan. The bureaus can do credit scoring, consolidate credit data for analysis and research purposes.
Progress To Date:
According to the latest State Bank statistics on branchless banking (BB) sector, m-wallets grew by 87% , reaching 27.3 million by the end of June 2017. It has a lot of room for growth in a county where about 100 million adults lack access to regulated financial services.
Pakistan is ranked 16th among 26 nations ranked by Brookings Institution with an overall score of 69% in "The State of Financial and Digital Inclusion Project Report" for 2017.
Summary:
Pakistan is ranked 16th among 26 nations ranked by Brookings Institution with an overall score of 69% in "The State of Financial and Digital Inclusion Project Report" for 2017. Access to regulated financial services for all is essential in today's economy. It allows people to save, borrow and invest. Those who lack access to regulated banking services are often forced to resort to work with unscrupulous lenders who trap them in debt at unaffordable rates. Such debt in extreme cases leads to bondage in developing countries. Financial inclusion is good for the individuals as well as the national economies. It spurs economic growth and helps document more of the economy. The rapid growth of mobile phones and Internet access in Pakistan offers a unique opportunity to increase financial inclusion in the country. A number of players are working on financial technology to make its application a reality in Pakistan. Among these players are non-bank banks like Telenor and non-profits like Karandaaz.
Related Links:
Haq's Musings
Financial Services Sector in Pakistan
Pakistan Ranked Among Top 5 For Financial Inclusion Efforts
Pakistani Banks Post Strong Growth
Branchless Banking in Pakistan
Pakistan Ranks High in Microfinance
World's Largest Democracy Tops Slavery Charts
NADRA's Biometric Database
 |
| Source: Brookings' Digital and Financial Inclusion Report 2017 |
Importance of Financial Inclusion:
Access to regulated financial services for all is essential in today's economy. It allows people to save, borrow and invest. Those who lack access to regulated banking services are often forced to resort to work with unscrupulous lenders who trap them in debt at unaffordable rates. Such loans in extreme cases leads to debt bondage in developing countries. Financial inclusion is good for the individuals as well as the national economies. It spurs economic growth and helps document more of the economy.
Easypaisa:
Fintech (financial technology) is bringing financial services to the unbanked population through non-bank institutions licensed by the State Bank of Pakistan, the top bank regulator in the country. One example of a non-bank is Telenor Pakistan, a leading mobile phone service operator, offering financial services via a large network of agents, currently over 70,000, far exceeding the total number of branches of all the banks in the country.
Easypaisa, a service operated by Telenor Pakistan, offers basic financial services like open a bank account, deposit or withdraw money, transfer funds, make mobile payments and pay utility bills.
Karandaaz:
Another important player promoting financial inclusion is Karandaaz Pakistan , a non-profit organization, set up by UK’s Department for International Development and Bill and Melinda Gates Foundation. It is providing grants to a number of local initiatives to develop and promote financial technology solutions in Pakistan.
Karandaaz Pakistan is promoting Fintech startups in 5 areas of focus:
1) Access to Financial services
Credit Scoring Models, Formalize savings through need based products, Digital lending services, and Insurance
2) Payments
Retail payments solutions through QR code, Supply / Value Chain Digitization, Ideas around digitization of online payments and merchant payments
3) E-Commerce
Smoothening of on-boarding process, Enabling Escrow Accounts for a retail merchant, Alternate payment modes other than COD
4) Interoperability
Innovative ideas to address the lack of interoperability among m-wallets
5) Early stage ideas related to:
M-Wallet Use cases, Education of Financial Services through technology, Customer Engagement / Experience, Micro Credit, Digital Savings
Finja's SimSim Mobile Payment:
Finja is a Pakistani fintech startup that recently introduced SimSim app for mobile payments. It's the first such application that has received approval of the State Bank of Pakistan. Finja has raised $1.5 million in venture funds so far. SimSim uses NADRA, a biometric citizen identity card that the Pakistan government has issued to almost its entire adult population, comprising around 60 percent of the total population of 207 million.
Private Credit Bureaus:
Credit data and scoring are essential to facilitate risk assessment and lending by financial institutions.
Under the Credit Bureaus Act, 2015, privately-run credit bureaus can collect and disseminate the credit data from both financial and non-financial institutions including retailers, insurance companies, utility providers and landlords, as notified by the federal government, according to Muhammad Akmal, Director of Banking Conduct and Consumer Protection Department at the State Bank of Pakistan. The bureaus can do credit scoring, consolidate credit data for analysis and research purposes.
Progress To Date:
According to the latest State Bank statistics on branchless banking (BB) sector, m-wallets grew by 87% , reaching 27.3 million by the end of June 2017. It has a lot of room for growth in a county where about 100 million adults lack access to regulated financial services.
Pakistan is ranked 16th among 26 nations ranked by Brookings Institution with an overall score of 69% in "The State of Financial and Digital Inclusion Project Report" for 2017.
Summary:
Pakistan is ranked 16th among 26 nations ranked by Brookings Institution with an overall score of 69% in "The State of Financial and Digital Inclusion Project Report" for 2017. Access to regulated financial services for all is essential in today's economy. It allows people to save, borrow and invest. Those who lack access to regulated banking services are often forced to resort to work with unscrupulous lenders who trap them in debt at unaffordable rates. Such debt in extreme cases leads to bondage in developing countries. Financial inclusion is good for the individuals as well as the national economies. It spurs economic growth and helps document more of the economy. The rapid growth of mobile phones and Internet access in Pakistan offers a unique opportunity to increase financial inclusion in the country. A number of players are working on financial technology to make its application a reality in Pakistan. Among these players are non-bank banks like Telenor and non-profits like Karandaaz.
Related Links:
Haq's Musings
Financial Services Sector in Pakistan
Pakistan Ranked Among Top 5 For Financial Inclusion Efforts
Pakistani Banks Post Strong Growth
Branchless Banking in Pakistan
Pakistan Ranks High in Microfinance
World's Largest Democracy Tops Slavery Charts
NADRA's Biometric Database
Riaz Haq
Pakistan approves blockchain-based national eKYC banking platform
https://www.kitco.com/news/2023-03-06/Iran-advances-its-digital-ria...
In other crypto-related developments out of the MENA region, the Pakistan Banks’ Association (PBA) has signed off on the development of a blockchain-based Know Your Customer (KYC) platform with the goal of strengthening the country’s Anti-Money Laundering (AML) capabilities in a bid to counter the financing of terrorism.
According to a report from the Daily Times, the PBA, which is comprised of 31 traditional banks operating in Pakistan, signed off on the project to develop Pakistan’s first blockchain-based national eKYC banking platform on Thursday at the behest of the State Bank of Pakistan (SBP), the country’s central bank.
Included in the list of member banks are multiple international behemoths such as the Industrial and Commercial Bank of China, Citibank and Deutsche Bank.
The new blockchain-based eKYC platform – dubbed “Consonance” – will also reportedly improve operational efficiencies, which are primarily aimed at improving customer experience during onboarding.
Consonance will be developed by the Avanza Group, and the platform will be used by member banks to standardize and exchange customer data via a decentralized and self-regulated network.
Mar 8, 2023
Riaz Haq
#SBP has launched SMEConnect, a centralized digital platform that simplifies access to financing for Small and Medium Enterprises (SMEs) across Pakistan. The platform enables SMEs to apply to their preferred banks through a single, streamlined application process, promoting accessibility, efficiency and transparency.
See PR: sbp.org.pk/assets/documen…
Visit SMEConnect: smeconnect.sbp.org.pk
https://x.com/statebank_pak/status/2115801028037923199?a=stl8vSlaLj...
———-
Credit is a vital driver of economic growth in developing countries, acting as the main fuel for business expansion, job creation, and poverty reduction, though its effectiveness depends heavily on how the capital is allocated and managed. [1, 2, 3, 4]
Key Roles of Credit in Developing Economies
Enterprise Growth and Innovation: Bank lending and private credit allow small and medium-sized enterprises (SMEs) to buy equipment, scale operations, adopt new technologies, and fund working capital. Enterprise credit specifically drives GDP growth and helps lower income inequality. [1, 2, 3, 4]
Job Creation: As local businesses expand using borrowed capital, they increase the demand for labor, reducing local unemployment and raising household incomes. [1, 2]
Poverty Reduction and Financial Inclusion: Access to basic credit, savings, and microfinance helps low-income households and marginalized entrepreneurs invest in income-generating activities and cope with financial emergencies. [1, 2, 3]
Public Infrastructure: Governments and state entities use credit and bond markets to finance large-scale public works—such as transportation, energy grids, and sanitation—that lay the groundwork for long-term productivity. [1]
Risks and Limitations
Enterprise vs. Household Credit: Studies show that credit directed toward businesses boosts real economic output, whereas rapid surges in unguided household or consumer debt often fail to generate long-term growth and can lead to over-indebtedness. [1, 2]
Non-Performing Loans (NPLs): In developing financial systems, poor credit vetting or political interference can lead to high levels of bad debt (non-performing loans), which slow down bank lending and drag down economic output. [1]
Sovereign Borrowing Costs: Developing nations often face biased or high sovereign credit ratings from international agencies, raising their cost of external borrowing and forcing procyclical fiscal tightening during downturns. [1]
Diminishing Returns: Flooding an economy with cheap credit in the absence of real productive enterprise or sound regulation can create asset bubbles or financial instability rather than genuine growth. [1]
Oct 31
Riaz Haq
Pakistan eyes export growth, wider SME financing to boost economy
https://mettisglobal.news/Pakistan-eyes-export-growth-wider-SME-fin...
November 11, 2026 (MLN): Pakistan needs to expand its export base, improve access to financing for small and medium enterprises (SMEs), raise productivity and remove structural barriers to achieve sustainable economic growth, Minister of State for Finance Bilal Azhar Kayani said on Tuesday.
Addressing a special forum titled “Economic Security: Pakistan’s Economic Bottlenecks – Diagnosis and Prescription”, he said exports were the only sustainable source of foreign exchange earnings, stressing the need to diversify export products, tap new markets and strengthen existing export-oriented sectors.
Highlighting the Export Facilitation Scheme (EFS), he said the facility supported exporters through duty-free imports of inputs used in goods intended for export. However, its coverage remained limited, with fewer than 1,000 SMEs benefiting from the scheme out of an estimated 10,000, according to APP.
He said the government was working to simplify procedures and remove regulatory obstacles to enable more businesses to benefit from existing export support facilities.
Sharing findings from consultations with around 50 SME exporters conducted on the Prime Minister’s direction, Bilal Azhar Kayani said access to finance, rather than energy costs, emerged as the primary concern among participants.
Climate Finance Investments
He noted that several established exporters with years of operational experience continued to face difficulties securing financing available under existing schemes.
The minister said the Prime Minister had prioritized improving SME financing and was engaging banks to review their performance in extending credit to SMEs, small farmers and low-cost housing projects.
He stressed that economic policymaking required active private-sector participation, adding that businesses dealing with regulatory and operational challenges should be involved in developing policies rather than keeping the process confined to separate government departments.
He said recommendations from private-sector-led working groups had contributed to several tax measures introduced in the recent budget. These included eliminating super tax for businesses earning between Rs150 million and Rs500 million, reducing it by two percentage points for businesses earning above Rs500 million and removing super tax on exporters.
Tax relief had also been extended to salaried individuals, he added.
Regarding reforms to the Export Development Fund, he said the government had accepted proposals to transfer its management to private-sector leadership and abolish the export development surcharge. The fund's board was now headed by exporters, with 89 exporters represented on it.
He also called for stronger coordination between federal and provincial governments to improve the utilization of development funds, noting that combined development spending by both levels of government exceeded Rs4 trillion.
Linking education with economic productivity, he said improvements in the education system were essential for developing a skilled workforce and securing long-term economic benefits.
He further emphasized the need to empower local governments by bringing decision-making authority and resources closer to citizens to address local issues effectively.
On governance, Bilal Azhar Kayani stressed improving the capacity and quality of public officials, ensuring respectful and informed engagement with citizens and reducing discretionary powers in the implementation of government policies and schemes.
6 hours ago