Pakistan a Proving Ground for Innovations in Mobile and Agent Banking

By Cgap, PRNE
Monday, October 10, 2011

WASHINGTON, October 11, 2011 -

Financial services have traditionally been out of the reach of people in poor and remote areas in Pakistan.  Now a number of developments are turning the country into a virtual laboratory for innovations that promise an end to this financial exclusion.  Both the government and the private sector are making moves that make Pakistan a market worth watching, according to CGAP, the global industry body dedicated to advancing financial access for the world’s poor.

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Since the Government of Pakistan introduced branchless banking regulation in April 2008, two large-scale initiatives have taken root and two other pilots have been introduced to test the market.

In a new paper, CGAP predicts that the next 12 months could see an even greater surge in new mobile and agent banking services seeking to bring financial services to people across the country.

The State Bank of Pakistan, the banking regulator, has supported these initiatives and has now issued four branchless banking licenses to banks, some of which have partnered with mobile operators and other actors to launch services. Recent changes to the regulations will make it much easier to open an account by removing the need to provide biometric information.

The two largest initiatives were launched by Tameer Microfinance Bank, owned by mobile network operator Telenor, and UBL, a major commercial bank. First MicroFinance Bank and Dubai Islamic Bank Pakistan have also received branchless banking licenses and have launched pilot programs.

Telenor and Tameer Microfinance Bank, operate the “easypaisa” service, through which customers - even those without a Tameer account or a Telenor phone - can pay bills or make transfers with the help of one of 12,000 easypaisa agents. By the end of July 2011, easypaisa had processed 23 million transactions altogether worth USD500 million. They have recently launched a major campaign to promote a mobile account to Telenor mobile customers.

UBL launched UBL Omni in April 2010, offering a similar range of over-the-counter services and, like easypaisa, customers can also access personal accounts through their mobile phones. UBL Omni has secured several contracts to make millions of payments on behalf of government and nongovernment agencies, including the Benazir Income Support Program, the government’s flood relief effort, and the World Food Programme.

Others planning to enter the market include TCS, Pakistan’s biggest courier and logistics company, with 400 outlets countrywide, and MCB, a commercial bank with more than 1,100 branches.

Like any innovation, however, success is not assured, even for the larger-scale efforts. “This is a tough business to succeed at,” said Chris Bold, author of the CGAP paper. “Getting customers, many of whom may have never used a bank account before, to put their trust in these services is going to be a huge challenge. These businesses need to offer services at a price that makes them more attractive to consumers than informal alternatives, and at the same time they must protect their customers — and themselves — from fraud and abuse.”

Given the early signs of customer acceptance for the initial schemes, and the commitment of serious business operators, Bold says there is reason to hope that Pakistan can progress from being a virtual laboratory for branchless banking trials to a showcase for how this approach can deliver responsible financial services to those without access. “Pakistan promises to offer some lessons in branchless banking that the world will be watching,” said Bold.

Read the CGAP paper:

About CGAP

CGAP is an independent policy and research center dedicated to advancing financial access for the world’s poor. It is supported by over 30 development agencies and private foundations who share a common mission to alleviate poverty. The Technology and Business Model Innovation Program at CGAP works to expand financial services for the poor using mobile phones and other technologies, and is co-funded by the Bill & Melinda Gates Foundation, CGAP, and the UK Department for International Development (DFID). Learn more at

Jeanette Thomas, Jthomas1 at, +1-202-473-8869, +1-202-744-4829 mobile

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