ICT-mobiles, financial sector to boost Pak banking

Information and communication technology (ICT) and mobile phones, the fastest growing business, joined by Pakistan's fairly robust banking sector are now busy in their endeavour to conquer the economy.
The ICT-mobile telephony and the financial sector have decided to expand banking to benefit a larger number of customers. One of the key elements of these efforts is the Financial Inclusions Plan (FIP).
But the sector's expansion and its help to the banking sector need several steps which should be undertaken by the government and the relevant sectors.
"In order to draw more investment into Pakistan, the government will have to introduce the right kind of incentives on top of matching them with a reasonable taxation regime," says Mark MacGann, group chief, external affairs at Veon Group which was previously known as VimpelCom Ltd.
MacGann and other key leaders of the global ICT industry had gathered at Karachi at a summit to finalise plans for expanding the IT industry and investment into this sector.
Its two partners - Pakistan Microfinance Investment Company (PIMC) and the government-operated Central Directorate of National Savings, (CDNS) are leading the way to integrate IT-and-banking. The possibilities for their success are very strong.
Look at the fact that CDNS already has a chain of several thousand branches in the country for small savers who receive interest rates much higher than the commercial banks, and is known as 'Qaumi Bachat.' The World Bank is a key partner. It has provided $140 million for the FIP.
"We at the central bank feel strongly to push our financial inclusion plan to bring millions of new customers into the banking network. The fruit of implementing the FIP will help and strengthen the economy, moving on a fast track," Mahmood Ashraf Wathra, Governor of State Bank of Pakistan, says while talking to Khaleej Times.
"We as IT-mobile phone service providers are sure to equally profit from the programme. We are very enthusiastic on implementing it," says Irfan Wahab, CEO Telenor Pakistan.
"The FIP is targeting 50 per cent of the country's adult population and turn them into banking sector's customers by 2020. The government estimates the total population at 200 million. Only 12 per cent of the adult group was doing business with the banking sector in 2008. The number rose to 23 per cent in 2015," the SBP says.
"It will take an additional 27 per cent to achieve the target, which is not difficult," says Atif Bajwa, CEO of UAE-based Bank Alfalah.
In order to expand ICT to help all the present and the future users, experts discussed a number of plans at the summit. These experts were of the view that for "entire digital ecosystem development in Pakistan, a consultative and collaborative approach is required among various industries, and sectors ranging from health, education, agriculture to media on different levels.
Dr Syed Ismail Shah, chairman Pakistan Telecom Authority (PTA), in his keynote address at the "Digital Banking and Mobile Payments Summit-2017, said: "In line with Pakistan government's vision for digital financial inclusion in the country, PTA as a facilitator is helping mobile operators transform themselves into digital service providers and creating awareness among the masses to fully capitalise this opportunity for the benefit of all."
Shah said: "Pakistan has witnessed a tremendous growth in the telecom sector over the years, especially in the mobile broadband, and a high growth is projected for the future." The regional comparison shows "a big surge in Pakistan's use of mobile broadband and inter-net. It followed the launch of 3G and 4G technology. Close to 90per cent of the Pakistani population is low covered in terms of mobile telephony. Several projects have been launched to expand it further."
Syed Irfan Ali, executive director, Banking Policy and Regulations Group of State Bank of Pakistan, in his address on "Achievements of Financial Inclusion", said: "The first and foremost objective of the government of Pakistan and SBP is that the National Financial Inclusion Plan Strategy (NFIS) has been set out to enhance the outreach of basic financial services to the un-banked and underserved segments. It aims to target 50 per cent growth in bank accounts by adult population by 2020. He said branchless banking is "the strongest driver for achievement of financial inclusion objective, and with branchless banking operators, 20 million mobile wallets and agent network of 350,000, over 1.3 million transactions are carried out every day."
He also said that the SBP is working on creating a new and separate, category of digital banks, which will incorporate new and developing technologies throughout a financial services entity.
The writer is based in Islamabad. Views expressed by the author are his/her own and do not reflect the newspaper's policy.