fulbright conference presentation v1

8/7/2019 Fulbright Conference Presentation V1

1/16

6th

Annual Fulbright & Humphrey Alumni ConferenceAIOU, Islamabad

Aban Haq

Pakistan Microfinance Network


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Why should we be concerned about financial

inclusion?

Magnitude of the problem: contextualizingwith data

Challenges & Opportunities


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a process that ensures the ease of access,

availability and usage of the formal financialsystem for all members of an economy


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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


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Banked, 11% Other

Formal, 1%

Informal, 32%

Financially

Excluded, 56%

Source: Access to FinanceSurvey 2008

Successful financial sector reforms

BUT


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Source:World Bank

Pakistan = 12%

India = 48%

Sri Lanka = 59%

South Africa = 46%

United States = 91%

Bolivia= 30%Indonesia = 40%


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Sectors Outreach(2008)

PotentialMarket

Estimates

Penetration(%)

SMEs 0.2 3.2 6.3

Agriculture 1.4 6.6 21.2

MortgageLoans

0.5 6.0 8.3

Microfinance 1.6 30 5.3

In million

Source:State Bank of Pakistan


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CHALLENGE

Rural-urban divide:

67% of population but 33% of

bank branches in rural areas Only 25% of total deposits and

17% of advances in rural areas

Remote and difficult terrain

Population density

OPPORTUNITIES

Large rural economy mostly unbanked

Diversification in activities Micro-Insurance services Remittances

Innovation in deliverychannels:

Using technology

Using agent services


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CHALLENGE

5% women vs. 20% menserved by formal financialsector.

68% women vs. 42% menfinancially excluded.

OPPORTUNITIES

Tend to be savers

Better repayment rates

Higher social returns


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CHALLENGES

Institution Level: Location

Products

Methodology

Sector Level:

Policies Incentives?

Understanding thedifferent market

OPPORTUNITIES

Regulatory Framework

MFI Ordinance 2001 Branchless banking

regulations

Guidelines for CBs

Successful delivery models

exist

Partnerships and synergies


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CHALLENGE

Only 47% understand the

term bank account 70% people have never heard

of a debit or ATM or creditcard

Within the Banked:

55% understand bank charges

36% understand Islamic banking

OPPORTUNITY

Interested,

36%

Neither

uninterest

ed nor

interested,20%

uninterest

ed, 11%

Not

Interested

at all; 18%

Interest in Financial Matters & News


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Poor land titling and property rights

Weak law enforcements

KYC requirements National ID Cards

Other documentation

External factors:

Macroeconomic stressors

Political interference


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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 neverthought about getting insurance due to lack ofinformation

Technology: mobile phones, POS and agents(mosques, shops, fuel stations, post offices etc.)

Partnerships CBs, NGOs, NADRA,


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Resources for further information:

www. microfinanceconnect.infowww.sbp.org.pkwww.cgap.orgwww.microfinancegateway.org

fulbright conference presentation v1

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