Mobile Commerce and Banking Summit and Exhibition: Government aims for financial inclusion, but roadblocks plenty
Speakers agree on importance, say population needs affordable products
Mr. Sirajuddin Aziz (President & CEO Habib Metropolitan Bank Ltd) speaking on Financial Inclusion at 1st Mobile Commerce & Banking Summit & Exhibition 2015. PHOTO: fb.com/wesociallink
KARACHI:
In a highly interactive session, experts from the financial sector, business community and telecom industry pressed for the need to support financial inclusion - the focal point of the ‘First Mobile Commerce and Banking Summit and Exhibition’ inaugural session, which kicked off on Wednesday.
Financial inclusion refers to the delivery of financial services at affordable costs to the disadvantaged, low-income or unbanked segment of the population.
‘The Convergence of Mobile Technology, Finance and the Consumer’ was the theme of the event and brought together prominent bankers, business leaders and telecom experts to hold a dialogue on the sector’s most challenging issues.
Additionally, the seminar aimed to highlight the importance of mobile technology for business-to-business (B2B) and business-to-consumer (B2C) financial industry.
Panelists shared contrasting views breathing life into the event, which was laden with economic and financial data.
Weary of withholding tax
“Withholding tax is the biggest threat to mobile commerce,” Karachi Chamber of Commerce and Industry trade analyst and adviser Ateeq Ur Rehman said in an apparent reference to the 0.6% withholding tax the government had imposed.
“If we want economic growth, we have to develop mobile commerce for which the business community plays a significant role,” Rehman said.
However, he added that the imposition of the tax killed the very purpose of financial inclusion for it discouraged businesses from using financial channels.
“We are not interested in documenting our transactions because we don’t want to pay our taxes,” Habib Metropolitan Bank’s President and CEO Sirajuddin Aziz said to the audience. Pakistan’s tax-to-GDP ratio stands at less than 9% compared to the region’s average of 15%, the banker said in his speech, which was the main highlight of the inaugural session.
If honest decisions are not taken, the country is doomed to fail, Aziz said, while calling for introspection. Giving example of the government’s decision to block the social video-sharing website Youtube.com, he said they deprived public of their basic right as opposed to supporting a technology, which can be helpful in many ways.
Single aim
While there were contrasting views on some aspects, all speakers were unanimous on the importance of financial inclusion and its growth.
The government has set a target for financial inclusion: they want 50% of the country’s adults to have a bank account (mobile account included) by 2020.
However, the ratio is 14% of the population so far, much lower than Bangladesh, Sri Lanka and India who have a penetration of more than 40%.
State Bank of Pakistan Agricultural Credit and Microfinance Head of Department stated only 23% of the population (190 million) use some kind of financial service while those who use formal banking services are only 16%.
Published in The Express Tribune, November 19th, 2015.
In a highly interactive session, experts from the financial sector, business community and telecom industry pressed for the need to support financial inclusion - the focal point of the ‘First Mobile Commerce and Banking Summit and Exhibition’ inaugural session, which kicked off on Wednesday.
Financial inclusion refers to the delivery of financial services at affordable costs to the disadvantaged, low-income or unbanked segment of the population.
‘The Convergence of Mobile Technology, Finance and the Consumer’ was the theme of the event and brought together prominent bankers, business leaders and telecom experts to hold a dialogue on the sector’s most challenging issues.
Additionally, the seminar aimed to highlight the importance of mobile technology for business-to-business (B2B) and business-to-consumer (B2C) financial industry.
Panelists shared contrasting views breathing life into the event, which was laden with economic and financial data.
Weary of withholding tax
“Withholding tax is the biggest threat to mobile commerce,” Karachi Chamber of Commerce and Industry trade analyst and adviser Ateeq Ur Rehman said in an apparent reference to the 0.6% withholding tax the government had imposed.
“If we want economic growth, we have to develop mobile commerce for which the business community plays a significant role,” Rehman said.
However, he added that the imposition of the tax killed the very purpose of financial inclusion for it discouraged businesses from using financial channels.
“We are not interested in documenting our transactions because we don’t want to pay our taxes,” Habib Metropolitan Bank’s President and CEO Sirajuddin Aziz said to the audience. Pakistan’s tax-to-GDP ratio stands at less than 9% compared to the region’s average of 15%, the banker said in his speech, which was the main highlight of the inaugural session.
If honest decisions are not taken, the country is doomed to fail, Aziz said, while calling for introspection. Giving example of the government’s decision to block the social video-sharing website Youtube.com, he said they deprived public of their basic right as opposed to supporting a technology, which can be helpful in many ways.
Single aim
While there were contrasting views on some aspects, all speakers were unanimous on the importance of financial inclusion and its growth.
The government has set a target for financial inclusion: they want 50% of the country’s adults to have a bank account (mobile account included) by 2020.
However, the ratio is 14% of the population so far, much lower than Bangladesh, Sri Lanka and India who have a penetration of more than 40%.
State Bank of Pakistan Agricultural Credit and Microfinance Head of Department stated only 23% of the population (190 million) use some kind of financial service while those who use formal banking services are only 16%.
Published in The Express Tribune, November 19th, 2015.