Pakistan leads in expanding financial inclusion efforts, says PM Kakar

KARACHI: Pakistan is at the forefront of the global financial inclusion drive, as Prime Minister Anwaarul Haq Kakar revealed significant progress during a webinar related to the World Economic Forum’s Spotlight Pakistan Day.

The discussion primarily focused on the success of the Virtual Remittance Gateway’s (VRG) Asaan Mobile Account scheme.

According to Dawn.com, Pakistan is enabling its citizens to effortlessly open bank accounts, even without access to the internet. By using a simple code on basic mobile phones, more than 8.5 million Pakistanis have opened bank accounts, and this number continues to grow daily.

The VRG, established in 2013, plays a pivotal role by offering cost-effective solutions to facilitate payments for unbanked and low-end customers. Under the supervision of the State Bank of Pakistan (SBP) and the Pakistan Telecommunication Authority (PTA), the Asaan Mobile Account scheme was launched in December 2021.

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As of October, the scheme has recorded an impressive 80.45 million transactions, and the number of accounts opened has surpassed 8.5 million. These transactions encompass interbank fund transfers, local fund transfers, and utility bill payments.

VRG, the service provider of the AMA scheme, has accomplished another milestone by reaching 8.5 Million Asaan Mobile Accounts by processing over 80.2 Billion rupees worth of financial transactions and hopes to achieve bigger milestones through hard work and determination. pic.twitter.com/aydRr5wC44

— Virtual Remittance Gateway (@VRGWorld) November 7, 2023

Notably, local fund transfers make up 48.9 per cent of the total, followed by interbank fund transfers at 35.4 per cent, and utility bill payments at 15.8 per cent.

Regionally, Punjab leads the way, accounting for 58.2 per cent of total transactions, with Khyber-Pakhtunkhwa and Sindh at 21.2 per cent and 11.1 per cent , respectively.

It’s pertinent to note that women in Punjab have a significant share in the total transactions conducted by women, at 81.2 per cent.

Meanwhile, Zarrar Sehgal, Chairman of VRG and Pathfinder Group, stressed the transformative potential of this platform not only for Pakistan but for other developing countries that lack the infrastructure for rapid financial inclusion.

He said that this model, which provides financial access to the underprivileged, could be replicated globally, yielding substantial social and economic benefits.

VRG is a 100 per cent equity-financed entity, with no external financial support from governments or donor-related organisations. Now, it seeks growth capital to enhance scalability.

Muhammad Salman Ali, VRG CEO, highlighted that 53 per cent of Pakistan’s adult population remains financially excluded. The Asaan Mobile Account scheme, which relies on the Unstructured Supplementary Service Data (USSD) channel, enables digital banking for nearly half of the population still using basic phones.

Ali pointed out the remarkable success of initiatives like Konnect by Habib Bank Ltd and JS Bank Ltd’s branchless banking segment, which together have empowered millions of users to access formal financial services, even in areas with limited banking infrastructure.

The Asaan Mobile Account scheme has not only opened doors to financial inclusion but also paved the way for more extensive outreach in Pakistan and beyond.

Hum News