By Noman Baig, Habib University and Bridget Kustin, Saïd Business School, University of Oxford
(continuation of Part One - Workshop Reflections)
Third, workshop conveners Dr. Noman Baig and Dr. Hafeez Jamali (director of Habib University’s Interdisciplinary Research and Action Center) assembled an unusually diverse group of participants: from financial technology start-ups, conventional and Islamic banks, academia, the State Bank of Pakistan – and even the State Bank of Pakistan’s Money Museum & Art Gallery.
The development of mobile wallets will bypass the agent network, who work on small commissions of 7-8% per transaction. Mobile wallets will give the corporations direct access to the customers who, instead of storing money in their conventional wallets or pockets, are now being encouraged to store it in mobile wallets. The money deposited in mobile wallets is then lent to commercial banks with an interest rate, which then gets further distributed in loans at a higher rate of return. Mobile wallet companies such as Finja and Monet believe that the historical monopoly of banks over money will be finally broken with the advent of smartphones. Fintech companies expressed great optimism about the role of smartphones in digitizing money.
|Session III: Financial Inclusion - Imaduddin, Kader, Bhatti, Bizinjo, Jamali (L to R)|
Muhammad Imauddin, a leader in microfinance policy at the State Bank of Pakistan and head of the National Financial Inclusion Strategy Secretariat at the State Bank, pointed out that the Finance Ministry’s 2015 national financial inclusion strategy reflected its commitment to the sector’s growth. In other words, Pakistan’s regulatory sector is amenable to financial inclusion, but infrastructure transformation takes time, due in part to the way that social issues are intertwined with regulatory concerns. Social issues affecting the work of regulators—but that require input from a variety of actors—include the longstanding exclusion of women from access to formal finance, and the distinct needs of merchants versus customers.
Many speakers referenced basic mobile phones, smartphones, Facebook, and WhatsApp when discussing the prospects of financial inclusion. These tools and free platforms have changed the fabric of Pakistani life through their rapid uptake by millions. The financial inclusion products, tools, services, and platforms discussed at this workshop—along with appropriate regulations and risk protections—can be similarly transformative.
|Keynote: Dr. Asma Ibrahim, Director of|
the Money Museum & Art Gallery
This ended the workshop on an unexpectedly provocative note: The fact of transformation (or “disruption”) is not itself remarkable or new. What remains consequential are its effects: Who will the transformation benefit, and how? Who will be left behind, and how? How will newly generated value be assessed, and where will newly generated wealth be distributed?
Bridget Kustin is an international board member of IMTFI and Postdoctoral Research Fellow, Saïd Business School, University of Oxford
Noman Baig is also an international board member of IMTFI and Assistant Professor in the School of Arts, Humanities and Social Sciences at Habib University, Karachi.
Links to videos
Session I: Digitization and Mobile Money
Bridget Kustin (Moderator, Saïd Business School, University of Oxford); Samar Hasan, Karandaaz; Qasif Shahid, Finja; Ali Sikander, Paysys Labs
Session II: Branchless Banking
Sohaib Khan (Moderator, Columbia University); Ahmed Ali Siddiqui, Meezan Bank; Talha Leghari, Monet; Bridget Kustin, Saïd Business School, University of Oxford
Session III: Financial Inclusion
Dr. Hafeez Jamali (Moderator); Fawad Abdul Kader, Zain Khalid Bhatti, Bank Alfalah; Shoukat Bizinjo, State Bank of Pakistan; Muhammad Imaduddin, State Bank of Pakistan
Dr. Asma Ibrahim, Director, State Bank of Pakistan Money Museum & Art Gallery