Banking in Pakistan

Banking in Pakistan

Bridging the Divide

Mobile UsersTraditional Banks Mobile Banking

• No of Mobile Users

• Mobile Penetration.

• Banking Model

• Gaps in the Model

• Banked percentage of the Population

• Banking for the Unbanked

• User-friendly Technology

• Reducing Expenses

Understanding the Basics

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Central Banking

• State Bank of Pakistan is the Central bank of the country and its head office is at Islamabad.

• It has offices at Karachi, Hyderabad, Sukkur, Rawalpindi, Lahore, Faisalabad, Gujranwala, Sialkot , Multan ,Peshawar and Quetta.

Commercial Banking

• It is the most effective mobilizer of savings and provides short term requirements of working capital to trade, commerce and industry.

• National Bank of Pakistan , Habib Bank Limited, United Bank Limited, Muslim Commercial Bank Limited ,Allied Bank of Pakistan Limited are the five commercial banks in the country.

Exchange Banking

• It comprises of 18 foreign banks with 64 branches which are located at Karachi and other commercial cities.

• It is engaged in financing foreign trade and is authorized to perform normal banking functions .

Banking Model: Simplified

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Source: Wikipedia

Savings Banks

• Post Office Savings Bank is the only Savings Bank in the country.

• It is controlled by the Government of Pakistan. • It accepts deposits from the public and invests

them in various Government projects.

Co-operative Banks

• There are 3 systems of cooperative banking in Pakistan.

• They consist of primary cooperative societies at the base; Central Cooperative Banks and Banking Unions in the middle and Provincial Cooperative Banks at the top.

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Banking Model: Simplified

Source: Wikipedia

Unbanked Pakistan

• 85% of the Pakistani adult population are financially excluded and do not use either formal or informal financial products.

• 11% of the adult population are formally banked, but almost a quarter of these people withdraw funds immediately.

• 32% of the adult population use other formal products such as insurance, leasing or microfinance.

An average Pakistani farmer has no means of saving

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Source: Finscope

Pakistan Today

Mobile Connectivity

• Total Subscribers: 107 million

• Annual growth rate: 4%

• Population Penetration: 64%

Pakistan has the highest mobile penetration rate in the South Asian region.

Source: Budde

Obopay Confidential 7

• Mobile phone subscriptions in Pakistan is 112 million whereas only 25 million people – mostly from high income group have bank accounts

• Which means 22% of the country’s population owns bank accounts, while more than 60% have access to mobile phones

Source: Tribune

There exists a comprehensible window of  facilitation between  the 25 million bank account

holders  versus  the 112 million mobile  subscribers.

Five mobile phone companies have brought  the entire country under comprehensive 

network coverage.

SBP has now issued four branchless banking licenses and there are two services which are

operational in the market at scale.

Mobile Banking: The Solution

Source: MIFA

Insufficient funding to increase outreach. All banks have limited access to capital.

Lack of diverse products and services for every section of the society

Duplication of efforts by non-governmental stakeholders (e.g., SBP credit bureau,

wholesale funds)

Mobile Banking: The Solution

Source: MIFA

Bringing it all Together

• Universal

• Ubiquitous

• UI

Consumer Linkages

GTM

Platform• High Performing

• Efficient

• Global

• Eco-system approach

• Direct integrations

• Inter-operable

• Investment in branding, distribution and operations

• Strategic partnerships

• Appetite to stay the course

Mass Market Offerings Drive Volume/Profitability Create Largest/Network Effect

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