Digitized Financial Inclusion may change fate of underprivileged: Experts

 Banking the unbanked population through digitized financial inclusion may bring positive change in the lives of the underprivileged populations and the national economy. This was stated by banking leaders and financial experts while sharing their views during a panel discussion “Digital Affairs: Financial Inclusion in Pakistan” hosted by Karachi Council on Foreign Relations (KCFR) in association with Swiss Asian Chamber of Commerce at Pakistan’s Pavilion on the sidelines of World Economic Forum Davos last week.

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The panel comprised of lead bankers including the keynote speaker Zafar Masood, President Bank of Punjab (BoP), Shazad Dada, President United Bank Ltd (UBL), Kabir Naqvi, President U Microfinance Bank (UBank), Salman Ali, CEO VRG, Aftab Rizvi, Risk Associates, and Imad Chishti, CEO Futafut. The discussion was moderated by Ali Shah, CEO iPath while a large number of potential investors and economic experts were present in the audience.  

Ikram Sehgal, Chairman Karachi Council on Foreign Relations (KCFR) & Pathfinder Group of Companies welcomed the guests and briefed the audience regarding the efforts being made by his team to build a positive image of Pakistan globally. Sehgal extended his gratitude to the people who stood beside his team in making such patriotic efforts. While sharing his viewpoint on the panel discussion topic, KCFR Chairman said “banking the unbanked is a huge challenge but it may lead us to the glory of economic stability and national growth”. Bringing the poorest members of the society into the mainstream of banking is the most important achievement and it seems to be possible through financial inclusion equipped with digital facilities, he added.

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Delivering his keynote address, BOP President Zafar Masood shared an overview of the banking sector in Pakistan and mentioned that despite massive challenges, Pakistan went way ahead of many other countries in terms of economic success. BOP President said that Pakistan has been committed to development goals and huge strides were being taken by the country in terms of national and international development goals including UN’s sustainable development goals. Masood also pointed out major hurdles which were being faced by Pakistan’s financial sector in banking the unbanked. While mentioning different proportions of Pakistan’s population, he said that Pakistan’s 61 percent population is between the 15-54 age group which would be most suitable for using the banking services while 35 percent of the Pakistani population is below 15 years of age and they would be ready for tomorrow’s banking. Terming financial inclusion as a heart-touching subject, BOP President said “true financial inclusion without functional deployment of a digital solution is almost impossible”. Zafar Masood stated that Punjab Bank is taking various revolutionary measures to bring non-banking customers into the national mainstream banking. Expressing his concerns BOP President said that despite being 51 percent of the total population, only 17 percent of women are using banking services. He said that such a large and significant section of the population could be included in the banking circle only through digitized financial inclusion and several steps were being taken in this regard. Masood also acknowledged KCFR Chairman Ikram Sehgal and his team for their patriotic efforts in making such events a massive success around the globe.

UBL President Shazad Dada, while sharing his views said that Pakistan is one of the fastest-growing countries and the conditions are very conducive to investment. Discussing the importance of financial inclusion in Pakistan, he said that there are many reasons for the decline in the use of traditional banking services, the most important of which is accessibility as most of the country's population lives in rural areas. He said that there are only 10 branches for 100,000 people in Pakistan whereas in Asia this rate is close to 16. In such a situation, financial inclusion can be very useful, especially when the proper use of digital resources is ensured.

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While responding to a question on the importance of digital services in financial inclusion, Kabir Naqvi, President UBank shared some valid facts and ground realities with the audience. According to him, understanding the customer and their requirements would be the most important factor in terms of an effective financial inclusion setup. He elaborated the efforts being made by UBank to reach the unbanked rural population through establishing far-flung branches where UBank officials provide direct trainings and awareness to the customers on financial inclusion and usage of digital resources.

Salman Ali, CEO VRG offered a very different perspective on financial inclusion. He told the audience that 192 million people in Pakistan use mobile phones and 41 percent of them have smartphones while the rest use simple feature phones. Salman said that the majority of people using feature phones is actually unbanked due to certain reasons while the financial inclusion can prove to be of utmost importance for them. VRG is working in this regard providing the customers a many-to-many business solution which enables them to open an account in any major bank by using a USSD code on their feature phone without internet.

Aftab Rizvi of Risk Associates, CEO FutaFut Imad Chishti, and Asif Riaz, Member Bank of Punjab also expressed their views on the occasion.