‘Fintech can help document economy’

Minister stresses country’s future depends on fintech ecosystem

Technology can steer documentation in the economy and boost digitalisation of banking sector as well as payments, said Minister of Science and Technology Fawad Chaudhry.

Speaking at a webinar titled “Target 10 Million: Leveraging Fintech to Expand Retail Investor Participation” on Tuesday, the minister said the only way to document the entire economy of Pakistan was to bring fintech into play.

“Fintech has a huge role to play in Pakistan economically and government policies can help companies succeed,” he said. “On the other hand, the companies specialising in fintech can do wonders for Pakistan.” He lauded payments through digital means under the Ehsaas programme, calling it a step forward for Pakistan.

The minister shared his vision on digitalising the government machinery so that all payments made by the government could be turned digital. He was of the view that the future of Pakistan depended on effectiveness of the fintech ecosystem.

He cherished that a large number of youth was opting for work in technology-focused businesses and vowed full cooperation of his ministry in devising business-friendly regulations for fintech businesses.

“We should encourage local companies to introduce fintech in the country,” he said. The minister, however, lamented the absence of PayPal in Pakistan’s market.

Speaking on the occasion, Pakistan Stock Exchange (PSX) CEO Farrukh Khan said that the new trading and surveillance system at the PSX, which was being developed in cooperation with the Shenzhen Stock Exchange, would be implemented by the end of March 2021.

He stressed that the platform would ensure robust and transparent trading at the PSX. “It was a huge challenge to complete the system in the given timeframe amid the Covid-19 pandemic,” he said.

During the initial lockdown to contain Covid-19 back in March 2020, the PSX continued to trade smoothly unlike other regional markets and as a result it emerged as one of the best stock markets in the world. He added that on average the PSX outperformed the MSCI index over the past 10 years by 3%.

Last year was indeed challenging but still Pakistan escaped difficult times thanks to the strong monetary and fiscal steps taken by the government and the State Bank of Pakistan, he said.

He termed the introduction of Roshan Digital Account a massive step forward and said the PSX was working with the State Bank to streamline know-your-customer regulations and account opening procedures, which acted as bottlenecks to investment.

SECP Commissioner Shauzab Ali said Pakistan was a huge economy with endless potential but still lagged behind in terms of growth in the number of investors and securities.

He added that documentation was helpful to the economy and Pakistan always emerged as a more documented economy than its peers. “Sector-specific expansion is helping the country,” he said.

“We are working with telecom companies to find avenues to leverage network services to attract investors to the capital market.”

He termed the just ended year special for Pakistan because funds generated by the market were more than the debt provided by banks.

He informed webinar participants that the SECP was in the process of revamping company registry following which the number of processes for companies would be reduced. “Next step will be digitising our internal processes,” he said.

“We are proposing new bills for regulatory reforms and the securities bill will be submitted to the government in the first quarter of 2021.” He added that the SECP was also working on the potential concept of direct listing of companies.

Published in The Express Tribune, January 13^th, 2021.

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