ISLAMABAD: Mobilink Microfinance Bank Limited (MMBL) has launched on Tuesday its 9-point agenda for the future of financial inclusion in the country and stressed the need to declare a small-medium emergency on SME financing.
TSMEs contribute nearly 40 percent of the GDP and 80 percent of the labour force and must be provided easy financing, stated the speaker, while speaking at the launch of 9 points agenda for financial inclusion.
Ahead of formally launching the agenda, Chief Executive Officer of MBBL Ghazanfar Azzam regretted that financial inclusion in Pakistan has been very low and without making finances available to the SMEs, agriculture and bringing 49 percent female population in financial inclusion, the country may be unable to move on sustainable growth.
Going forward, he said that the SMEs can be backbone of the economy. Azzam said the efforts have been made in recent years to expand the financial inclusion in the country, yet two-third population is out of the system. He said that overall financial inclusion was very nominal and the country has a long way to go when it came to borrowing of women, farmer and other sectors. He said that out of 34 million mobile wallets only 14 million wallets are active which reflects that huge number is out of the system.
Azzam underlined the importance to improve digital banking and stated that subsequent to the Covid-19 pandemic, digital transformation on a sustainable basis has become indispensable for socio-economic growth and development. Being an industry of financial inclusion in the country, MMBL has identified key strategic areas that need immediate interventions to bring every Pakistani into the fold of financial inclusion.
The development of these areas through access to finance will prove to be a game-changer for the national economy. He said that we are committed to playing the role for the uplift of Pakistan. The agenda presented included research-based recommendations in the areas of diversity and inclusion, microfinance, SME finance, housing finance, agriculture finance, digital lending, payments, savings, and insurance.
During a brief two-member panel discussion, a representative of the SECP said that microfinance institutions were affected badly due to the Covid and going forward these are being incentivised. Additionally, she said that every effort was being made to facilitate the microfinance institutions and some regulatory interventions have also been made.
On the importance of gender balance, she said that she herself was an example of gender balance in the SECP, where 28 percent female staff is working on top level. Mohsin Ahmed of microfinance network sought amendments in Microfinance Ordinance 2001, and stated microfinance institutions are in touch with the State Bank of Pakistan for necessary amendments in the Ordinance.
He further stated that the MFI are also facing issue of tax as overall perception is that they are making profit and therefore, should be taxed. Chief Finance and Digital Officer of Mobilink microfinance bank Sardar Mohammad Abubakr said that this was a very small effort and any discussion on financial inclusion must address the needs of the masses.
He said that with the right approach, digital financial inclusion can help alleviate poverty by bringing women into the financial inclusion mainstream and enabling the all-important SME sector to have formal access to finance. He said that a national digital execution plan and public-private collaboration can help take ahead this agenda meaningfully.
The MMBL strongly proposes banking the entire adult population, especially women, and facilitating easy financing of SMEs, which contribute nearly 40 percent of the GDP and 80 percent of the labour force, he added. The document also emphasised facilitating digital payments that continue to lead the way in digital finance and their growth hints at the country's progress towards transformation to a digital economy in the future.
In addition, the policy document acknowledges the significant reform in the housing sector as a result of Naya Pakistan Housing Scheme and similar initiatives taken by the Government of Pakistan as well as the banks. It stressed that low-cost affordable housing for the masses is of utmost importance and reforms in housing finance practices and procedures are necessary to complement these efforts.
With the implementation of lockdowns and social distancing measures in order to curb the Covid-19 pandemic, it has become clearer than ever before that Pakistan needs to fully emit transformation on a sustainable basis. The use of internet/mobile banking services increased 116 percent year-on-year during quarter first of 2021, as consumers utilised their smartphones to transfer funds, pay utility bills, carry out retail purchases, thereby facilitating its increased adoption and use cases.
These developments in the provision of financial technology services are complemented by regulatory and policy framework - 2017 digital Pakistan policy and the digital Pakistan policy 2021 - which aims to transform financial landscape of the country as one of the leading markets for digital finance in South Asia.
The document stated that there is also an urgent need of a national digital execution plan and a public-private taskforce, which will ensure implementation of policy frameworks and the goals set jointly by the public and private sector. With over 62 million registered bank accounts and a rate of mobile phone penetration of over 75 percent, there is a considerable opportunity for digital financial services to step in and serve the unbanked segment of the population.
The MMBL had over 34 million registered users including 14 million monthly active digital wallets and the bank was lending to small and medium-sized enterprises with over 800,000 traditional individual and micro-enterprise loans disbursed, besides more than 1,100,000 digital nano loans disbursed till August 2021.
Copyright Business Recorder, 2021
Comments
Comments are closed.