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Pakistan's Fintech Revolution to Promote Financial Inclusion

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

Source: Brookings' Digital and Financial Inclusion Report 2017

Importance of Financial Inclusion:

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


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

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


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

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

1) Access to Financial services

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

2) Payments

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

3) E-Commerce

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

4) Interoperability

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

5) Early stage ideas related to:

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

Finja's SimSim Mobile Payment:

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

Private Credit Bureaus:

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

Progress To Date:

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

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


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

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Comment by Riaz Haq on November 4, 2017 at 4:28pm

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

KAZUKI KAGAYA, Nikkei senior staff writer

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

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

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

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

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

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

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

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

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

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

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

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

Comment by Riaz Haq on November 4, 2017 at 9:24pm

Building a secure and inclusive
global financial ecosystem

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

Pakistan Update:

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

In October 2016, the Pakistan Post and Karandaaz Pakistan signed a partnership agreement to digitize
money order services at Pakistan Post. According to the terms of the agreement, Karandaaz Pakistan
will provide technical support in developing a new product called the “mobile money order,” which
will be made available through Pakistan Post.9
Next steps
• Promote registration of mobile wallet accounts to deepen usage of diverse financial services
• Advance implementation of the Pakistan Financial Inclusion and Infrastructure Project
• Enhance broadband infrastructure to support digital and financial inclusion 

Comment by Riaz Haq on November 4, 2017 at 10:09pm

State Bank of #Pakistan: #Pakistanis fast adopting #digital financial transactions - The Express Tribune #fintech

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

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

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

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

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

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

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

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

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

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

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

King of the ring

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

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

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

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


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

PSO set to offer branchless banking services

Point of sale

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

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

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

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

Comment by Riaz Haq on November 7, 2017 at 8:19am

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Comment by Riaz Haq on November 7, 2017 at 5:00pm

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

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

Comment by Riaz Haq on November 13, 2017 at 9:31pm

#Broadband users in #Pakistan cross 48.13 million • Dispatch News Desk #3g #4g #smartphones

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

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

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

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

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

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

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

Comment by Riaz Haq on Friday

11 Fintech Startups from Pakistan You Need to Know About in 2017

According to the World Bank, half of Pakistan’s population do not have access to the most fundamental banking and financial services. The arrival of Pakistani fintech startups catering to average consumers has effectively bridged this gap, enabling local “unbankable” citizens to enjoy the conveniences of modern banking and finance—while allowing for more productive and efficient digital financial services.


AbacusConsulting was founded as a management consulting firm—but has evolved into one of Pakistan’s premier business solutions providers. The company specializes in developing finance-related business solutions for business and organizations large and small.


Finja was founded by tech and banking industry veterans in efforts to produce innovative financial services accessed via digital ecosystems. Its SimSim solution is Pakistan’s first payment solution for free and frictionless payments in real-time.


Inov8 is widely regarded as the fastest growing digital payments company in the region. The company collaborates with Easypaisa to connect its vast distribution network to all commercial banks that have adopted Inov8’s technology; additionally, it recently signed up Telenor Microfinance Bank’s mobile money platform to its platform.


KarloCompare’s web and mobile app allows users to compare a large range of credit card, personal/auto loan, travel insurance, and broadband offers with a few clicks/swipes. The startup has been featured by Techinasia, E27, Yahoo! News, and Propakistani, among others.


OneLoad’s platform allows users to top up their mobile accounts easily through its streamlined mobile app and web portal. Retailers can top up mobile numbers from any mobile phone operator, allowing for a unified mobile billing experience for customers and a single universal mobile usage balance.

Red Buffer

Red Buffer specializes in developing data science services, cloud and mobile apps, and machine learning/natural language processing (ML/NLP) applications. The company focuses in particular on NLP for domains like legal, finance and e-commerce.


Stocksfm has created the first transparent social investment network focused on emerging markets. The company created the $ticker tag to compile and organize streams of information around stocks and markets, across internet and social media websites. This innovative “stream” concept provides insights and ideas used by investors, media analysts, and others as they research and manage their financial investments.


Monet is a card and payment services provider aimed at digitizing payments in cash-based economies. The startup was the winner of the Grand Challenges Explorations, an initiative funded by the Bill and Melinda Gates Foundation.


TPS develops solutions for prepaid mobile card and card management channels, payment issuing, billing payment gateway integration, and more. The company is trusted by over 120 customers in over 30 countries across the globe.


Incubated at Plan9, Payload has developed an easy-to-use technology that allows businesses to accept bitcoin payments while only handling Pakistani Rupees. Check out our coverage of Payload in last year’s 15 Tech Startups in Pakistan You Need to Know About.

Fintech may have taken the world by storm, but in Pakistan, various roadblocks must be surpassed before digital solutions are accepted into the local banking and finance mainstream. Despite the challenges, these 11 innovators are leading the charge to bring fintech to Pakistan’s masses; be sure to keep them on your radar in 2017 and beyond.


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