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    Aban Haq
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    The document discusses the challenges and opportunities around financial inclusion in Pakistan, noting that only 12% of Pakistanis have access to formal financial services compared to over 40% in other developing countries. It outlines barriers like the rural-urban divide and lack of documentation, but also opportunities in expanding access to underserved sectors like rural communities, women, and SMEs through innovative delivery channels and a supportive regulatory framework. Overall, the document argues that improving financial inclusion in Pakistan could help redistribute wealth and accelerate economic growth.

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    The document discusses the challenges and opportunities around financial inclusion in Pakistan, noting that only 12% of Pakistanis have access to formal financial services compared to over 40% in other developing countries. It outlines barriers like the rural-urban divide and lack of documentation, but also opportunities in expanding access to underserved sectors like rural communities, women, and SMEs through innovative delivery channels and a supportive regulatory framework. Overall, the document argues that improving financial inclusion in Pakistan could help redistribute wealth and accelerate economic growth.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    9 views16 pages

    Fulbright Conference Presentation V1

    Uploaded by

    Aban Haq
    The document discusses the challenges and opportunities around financial inclusion in Pakistan, noting that only 12% of Pakistanis have access to formal financial services compared to over 40% in other developing countries. It outlines barriers like the rural-urban divide and lack of documentation, but also opportunities in expanding access to underserved sectors like rural communities, women, and SMEs through innovative delivery channels and a supportive regulatory framework. Overall, the document argues that improving financial inclusion in Pakistan could help redistribute wealth and accelerate economic growth.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    of 16

    Aban Haq

    Pakistan Microfinance Network

    6th Annual Fulbright & Humphrey Alumni Conference


    AIOU, Islamabad
     Why should we be concerned about financial
    inclusion?
     Magnitude of the problem: contextualizing
    with data
     Challenges & Opportunities
    a process that ensures the ease of access,
    availability and usage of the formal financial
    system for all members of an economy
    Improve the quality of life!

    Requires access to various goods and services

    Expanding access to finance:


    • Redistribution of wealth and equalizing opportunities
    • Efficiency gains and allocation of risk
    • Acceleration of economic growth
    Successful financial sector reforms
    BUT

    Source: Access to Finance Survey 2008


    Pakistan = 12%
    United States = 91%

    India = 48%
    Sri Lanka = 59%
    Indonesia = 40%
    Bolivia= 30%

    South Africa = 46%

    Source: World Bank


    In million
    Sectors Outreach Potential Penetration
    (2008) Market (%)
    Estimates
    SMEs 0.2 3.2 6.3
    Agriculture 1.4 6.6 21.2
    Mortgage 0.5 6.0 8.3
    Loans
    Microfinance 1.6 30 5.3
    Source: State Bank of Pakistan
    CHALLENGE OPPORTUNITIES
     Rural-urban divide:  Large rural economy –
     67% of population but 33% of mostly unbanked
    bank branches in rural areas  Diversification in activities
     Only 25% of total deposits and  Micro-Insurance services
    17% of advances in rural areas  Remittances
     Innovation in delivery
     Remote and difficult terrain
    channels:
     Population density  Using technology
     Using agent services
    CHALLENGE OPPORTUNITIES

     5% women vs. 20% men  Tend to be savers


    served by formal financial  Better repayment rates
    sector.  Higher social returns
     68% women vs. 42% men
    financially excluded.
    CHALLENGES OPPORTUNITIES

    Institution Level:  Regulatory Framework


     Location  MFI Ordinance 2001
     Products  Branchless banking
     Methodology regulations
     Guidelines for CBs
    Sector Level:  Successful delivery models
     Policies
    exist
     Incentives?
     Understanding the  Partnerships and synergies
    different market
    CHALLENGE OPPORTUNITY

     Interest in Financial Matters & News


    Only 47% understand the
    term ‘bank account’
     70% people have never heard
    of a debit or ATM or credit
    card
     Within the Banked:
     55% understand ‘bank charges’
     36% understand Islamic banking
     Poor land titling and property rights
     Weak law enforcements
     KYC requirements
     National ID Cards
     Other documentation
     External factors:
     Macroeconomic stressors
     Political interference
     BIG potential in Savings and Insurance:
     56% population saves either formally or informally
     39% people save regularly
     Over 50% of even the educated have actually never
    thought about getting insurance due to lack of
    information
     Technology: mobile phones, POS and agents
    (mosques, shops, fuel stations, post offices etc.)
     Partnerships – CBs, NGOs, NADRA,
    Resources for further information:
    www. microfinanceconnect.info
    www.sbp.org.pk
    www.cgap.org
    www.microfinancegateway.org

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