KARACHI: The State Bank of Pakistan (SBP) has achieved its target of 50 percent adult population with a bank account before 2020, its deputy governor said on Wednesday.
Jameel Ahmad, SBP deputy governor said unique account ownership has reached 63.9 million as of June 2018, representing more than 50 percent of adults with a bank account well before the deadline of year 2020.
The bank accounts include both branch banking as well as branchless banking. The SBP in 2015 launched the first National Financial Inclusion Strategy (NFIS). This strategy sets the vision and outlines an action plan for achieving certain targets.
“Since we reached the headline targets well before our deadline of 2020, the government adopted an enhanced NFIS, which sets the vision to improve financial inclusion through further access to finance and deposit base, promotion of small and medium enterprises, easy and affordable access to finance to farmers, facilitation in low cost housing finance,” Ahmad said in a key note address at the 21st Management Association of Pakistan’s convention.
NFIS aims to enhance the usage of digital payments to 65 million active digital transaction accounts, with gender segregation of 20 million accounts by women. Promotion of SME finance by extending finance to 700,000 SMEs which is 17 percent of the private sector credit is one of the important goals to be achieved under the NFIS.
The other goals include: Increase in agricultural finance by serving six million farmers through digitalised solutions and extending annual disbursements to Rs1.8 trillion. And finally enhance the share of Islamic banking assets and its number of branches to 25 percent and 30 percent of the banking industry respectively.
“The NFIS action plan expects to contribute in achieving sustainable development through creation of three million new jobs, generate additional exports of $5 billion and enhance banks’ deposits to GDP ratio to 55 percent by 2023 through measures adopted under NFIS-2023,” Ahmad said.
“I must mention that the NFIS strategy also includes digitisation of payment systems and adoption of technology as an effective method to improve financial access and inclusion. This leads me to my next topic which is the digitisation of payment systems and SBP’s policy on it.
SBP has already started work on the implementation of a micro payment gateway in partnership with Bill & Melinda Gates Foundation and its representatives in Pakistan, he revealed.
This Gateway would offer faster retail payments with advanced application programming interfaces and directory services, which would simplify the requesting, receiving and sending of payments in the country.
SBP has also been closely working on digitising government collections and payments, which include digitisation of government salaries, pensions and government collections. Recently, SBP, FBR and the provincial revenue authority of Punjab have successfully completed the project for digital collection of taxes and duties using alternate delivery channels.
The SBP’s deputy governor said while central banks seem to be primarily concerned with the formulation and implementation of monetary policy, their domain has now expanded towards increasing financial inclusion as well.
This is necessary not only from financial deepening purposes but also from the perspective of poverty reduction. Enhanced financial inclusion ensures economic efficiency, maximum participation of its population in the overall economic process, thus maximising growth and development, he noted.