Pakistan rated among fastest growing markets in mobile banking

SBP Governor talks about expansion of the industry spurred by technology.

KARACHI:

The disparity between the banked and unbanked segments of the country as well as recent growth in branchless banking sector remained the highlights of the International Mobile Commerce Conference held on Thursday.

Only 22% of the country’s population owns bank accounts, while more than 60% Pakistanis have access to mobile phones, according to experts who believe that the unbanked or under-banked segments of Pakistan offer huge opportunity to expand mobile and branchless banking.

Pakistan’s mobile phone subscription reached 112 million – around 62% of the total population, Governor, State Bank of Pakistan Yaseen Anwar said while addressing a packed conference  attended by executives from leading national and international banks, telcos and mobile commerce software providers.

In contrast, the governor said, only 25 million people – mostly from the high income segment – own banking accounts. “Where conventional banking has its limitations, electronic payments and mobile banking products should fill the gap,” he said.

The governor also shared various data in support of the growth in branchless banking sector. “Consultative Group to Assist the Poor (CGAP), in its recent study, has recognised Pakistan as one of the fastest developing markets for branchless banking,” Anwar said.

Sharing statistics of SBP, Anwar said value of branchless banking transactions reached Rs79,410 million during the last quarter. Total number of branchless banking accounts have increased to 929,184, he said, while branchless banking deposits have grown to Rs503 million.

SBP introduced branchless banking regulations in 2008. He further said around 80 million branchless banking transactions of Rs300 billion have been executed in Pakistan. “I am expecting a surge in the number of access points to over 50,000 very soon,” he said. Total volume (number) of transactions has jumped to 20.6 million during the October to December 2011, Anwar said. The average number daily transactions has increased to 228,855, he added.

The average size of branchless banking transactions, Anwar said, is Rs3,855 which shows that mobile phone technology and agent-based banking are providing financial services to unbanked poor.

While talking about the benefits of branchless banking, he said, rural customers will no longer be required to travel long distances. He further said a large proportion of population – which is unbanked – has been heavily reliant on cash-based transactions, thus causing a negative impact on documentation of the economy, the tax-base, efficiency of economic transactions, etc.

Representatives of the world’s leading software providers gave detailed presentations and discussed case studies on how mobile banking has succeeded in other emerging as well as developed markets.

Mobile banking is the only way forward, said Mathew Talbot, Senior Vice President, Mobile Commerce Sybase 365 – which was recently acquired by SAP. Pakistan is one of the fastest developing markets for branchless banking in the world, he said, which is why Sybase is here.

Sybase provides technologies to banks, which enable the latter to have full control of their bank accounts and make transactions through mobile device regardless of their location. It creates opportunities for bringing the unbanked and under-banked segments of the society into the financial network.

Published in The Express Tribune, March 16^th, 2012.