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November 27, 2019

Queen Maxima stresses women participation in financial programmes


November 27, 2019

ISLAMABAD: The Special Envoy of UN Secretary General and Netherland’s Queen Maxima said on Tuesday that the provision of lending for women and poor segments of the society should be increased in Pakistan under financial inclusion programme.

“There is need for increasing participation of women and poor segment of the society for financial inclusion programme as loan provision for private sector increased and ease of doing business improved in Pakistan” the visiting Queen Maxima said while addressing Innovative Finance Forum organised by Asian Development Bank in collaboration with Karandaaz Pakistan and Bill Gates & Melinda Foundation here on Tuesday.

She praised the strategy adopted by Pakistan under financial inclusion programme and said that the country was getting good results out of it. She said that the poverty line stood at around 40 percent out of which only 14 percent possessed bank accounts. The new government, she said, was implementing national financial inclusion programme under which the number of active digital financial accounts would be increased to 65 million by end of 2023.

Out of total 65 million digital accounts, 20 million accounts of women will be opened. She said that she met with Pakistani official during her visit and was informed by governor State Bank of Pakistan (SBP) about revised financial inclusion programme and its strategy to bring un-bankable into financial system. On this occasion she appreciated the mechanism of micropayment gateway system.

On the second day of the 2-day Pakistan Innovative Finance Forum, State Bank of Pakistan (SBP) and Karandaaz signed an agreement to partner for the implementation of Micropayment Gateway, a part of the National Financial Inclusion Strategy.

The agreement was signed by Ali Sarfraz, CEO Karandaaz and Syed Sohail Javvad, Head of Payment Systems Department, SBP. The signing was witnessed by Queen Maxima of Netherlands currently visiting Pakistan; Hammad Azhar, Minister for Economic Affairs Division; Dr. Reza Baqir, Governor SBP and Dr Shamshad Akhtar, Chairperson Karandaaz. Through this agreement, Karandaaz with funding from BMGF will support SBP to put in place this gateway, a digital payment platform based on modern technology making real time interoperability of smaller digital transfers possible.

Queen Maxima who is visiting Pakistan in her capacity as the UN Secretary-General's Special Advocate for Inclusive Finance for Development (UNSGSA) said, “It is encouraging that SBP is committed to set up the micropayment platform and that all providers and government entities will be required to join in 2020. The next steps in designing the appropriate governance structure, scheme rules, initial use cases, and pricing will be critical for the platforms to succeed and to have impact. I encourage you all to engage with industry Working Group led by the State Bank and also to discuss and provide your inputs on the design.”

Minister for Economic Affairs Hammad Azhar extended warm welcome to the visiting Queen Maxima and said that Pakistan was determined for implementing financial inclusion programme under which the government payments would be shifted on digital mechanism by 100 percent and work was underway to achieve this goal. He said that the government devised policy for small and medium enterprises (SMEs) through which this sector would be facilitated.

The SMEs, he said, could promote economic activities and could provide more job opportunities. He said that the SMEs contributed 30 percent into GDP and stood at 90 percent of total enterprises of the country, adding that its share in exports clinched 25 percent. The minister said that the SME sector was ignored in last 10 to 15 years after which its share in GDP shrank from 15 percent to 7.5 percent. This incumbent regime, he said, envisaged to increase share of SMEs into GDP up to 17 percent by 2023 and the target for provision of SME loans would be increased by 0.2 to 0.3 million borrowers.

He said that the government was establishing Credit Company. He said that the commercial bank did not provide loans to SME sector. He was of the view that the CPEC was important for the SME sector as Kamyab Young Programme was aimed at promoting small and medium enterprises in the country. The minister said that Pakistan rating improved in World Bank’s Ease of Doing Business Report and the country’s ranking would further improve next year.

Speaking at the occasion, Dr. Shamshad Akhtar, Chairperson Karandaaz said, “In Pakistan, around 50% of the adult population, mostly women, lack access to formal financial services. Most households resort to risky, inefficient, and expensive informal channels to fulfil their financial needs. Immediate clearance of transactions will keep the system-cost low and providers would contribute data to a shared service, ensuring all users and transactions are legitimate and risk free. Millions of people in Pakistan are not included in the formal economy and thus miss out on the many advantages of formal financial systems. With a high mobile phone penetration, Pakistan is well positioned to expand and accelerate digital financial systems and this micropayment gateway will go a long way in spurring financial inclusion in the country.”

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