Financial Inclusion Plan’s target is to raise number of customers with access to bank accounts
The Pakistani banking sector, which has already been highly profitable, is on track to expand further with millions of new customers set to enter its fold owing to financial inclusion initiatives.
The priority target of the Financial Inclusion Plan (FIP) is to raise the number of customers with access to bank accounts and services to 50 per cent of the adult population. The number was 23 per cent in 2015 and 12 per cent in 2008.
These are some of the key objectives of the State Bank of Pakistan (SBP), the central bank, and its two associates – Pakistan Microfinance Investment Company (PMIC) and the Central Directorate of National Savings (CDNS) – in launching the Pakistan Financial Inclusion & Infrastructure Project. It has the potential to expand the banking sector, the overall economy and fund new infrastructure projects. The World Bank has come up with a $130 million assistance programme for the FIP.
This decision has been welcomed by the government, bankers and the millions of villagers who have never visited a bank, written a cheque or dealt in any other banking instrument.
What will be the profitability and benefits for service providers and the common man? “The sky is the limit,” Finance Minister Ishaq Dar told Khaleej Times.
“The programme will impact the people and the whole economy in a scale never imagined in the entire developing world,” said Mohammad Ashraf Wuthra, governor of the SBP.
A spokesman of the SBP’s Development Finance Group (DFG) said the project aims at providing banking services to persons, households and businessmen, better access to financial services and banking via modern digital payments. “This will be assisted by fast-growing IT services,” the spokesman said.
The SBP will channel the required funds through the PMIC. It is the PMIC’s responsibility to provide funds to institutions such as micro finance banks and CDNS branches to develop new financial products to attract people with small savings. The initiative will also help people with savings to fund national infrastructure projects and provide funds to small and medium industries and commercial units at reasonable costs.
Owners of small businesses and households are still seeking greater access to credit, banks, the financial market and other sources of finance. After the policy was implemented to expand financial inclusion from 2008 to 2015, the number of people and households with access to various types of financial services had risen from 12 per cent in 2008 to 23 per cent in 2015.
Apart from the Financial Inclusion Plan, the banks are moving ahead in other areas too. For instance, the growth in FDI inflows is enhancing banks’ profitability and financial transactions. The SBP reported that FDI inflows rose 9.9 per cent during the first seven months of the financial year 2016-17 as compared to 2015-16. The fund inflow was mainly from the Netherlands, China and Turkey.
In another development, the SBP has asked banks, forex firms and money changers to accept old US dollar bills from the public. People, including overseas Pakistanis visiting home, have raised complaints that money changers and banks are not accepting old US dollar bills and bills of smaller denominations. In cases where they accepted old bills and bills of $5, $10 and $20, the customers had to suffer losses in terms of lower rates. This move by the SBP should be a big help to all Pakistanis at home and abroad.
The writer is based in Islamabad. Views expressed are his own and do not reflect the newspaper’s policy.
MORE FROM Khaleej Times
The Dubai Ruler has greenlighted the project that will also make… READ MORE
The 36-year-old sergeant was killed while on duty with the Saudi-led… READ MORE
Making your flights all the more interesting since time immemorial READ MORE
This lady has her priorities straight . we think READ MORE