In a latest technological development, FINCA Microfinance Bank is planning to launch digital payment solution in rural and semi-rural regions. The idea of introducing digital payment solution is to cut down the delivery cost besides augmenting digital literacy.
Through this, all the necessary details of the client will be obtained through biometric verifications. The bank will be using devices to get hold of all the required information. Consequently, it will minimize the loan-processing time to within 48 hours. Besides devices, FINCA Microfinance Bank’s recently introduced mobile wallet, SimSim is apparently the hope of the management which will eventually upsurge its position in rural areas.
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Digital payment solution is the future
While talking to journalists, FINCA Impact Finance Global President and CEO Andree Simon stated:
“I believe that the introduction of digital financial services in Pakistan can help us reach the untapped market, which is huge”
In addition, she also said that the ongoing developments in the microfinance sector of Pakistan are positive and encouraging. She was of the view that their bank operations are mounting; however, there were some concerns when she talked about financial inclusion. She stated:
“Financial inclusion in Pakistan is slow, in fact it is dependent on physical verifications on ground for a very long time. This increases the time of verification, as the officer has to meet the clientele physically, which turns it into an expensive delivery model. With digital finance, the delivery cost can reduce significantly as we have already done in other countries and reduce direct expenses up to 90%”
Read More: SBP approves mobile wallet app SimSim
Role of mobile wallet
When Andree Simon was asked about mobile wallet, she answered that this product has the tendency to spread villages without any physical presence. Essentially, it will assist in refining the people on how to use the mobile device in a better manner for financial inclusions.
In addition, she added:
“Access to technology in Pakistan is uneven and in reality people in rural areas are not that literate. Using traditional mobile phone is time consuming and as the cost of smart phones will came down, people have more choices and we have more room to educate people”
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About Finca Microfinance Bank
Initiated in May 2013, FINCA managed to register a year-on-year growth of 63% in 2015. Additionally, the bank also managed to successfully post 86% growth in 2016 with a profit-after-tax of Rs631 million. It is pertinent to mention that FINCA Microfinance Bank disbursed roughly 430,000 loans. Until now, the bank has disbursed around Rs37 billion.
The management of the bank is keen on focusing disbursing loan to agriculture since 60% of loan payments are made for this very sector. According to the bank, the agriculture sector borrows six times more from the informal sector than the actual disbursement of Rs700 billion from formal networks.
Speaking about this very sector, Andree Simon said:
“We are in active discussions to introduce new and diversified product lines. We are also looking to explore agriculture loans since this sector offers a huge opportunity”
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Moving forward
Pakistan is blessed with a very rich talent. The environment for the business has great potential in the country. The staff is also talented and the population density is quite high which promises a lot of opportunities. However, financial inclusions remains a massive concern as Andree Simon stated:
“Financial inclusion, however, what we dream of is not at that level. Majority of the people don’t have a bank account, which is an issue”
At the end, Andree Simon was quite hopeful that the bank will minimize this gap through digital financial inclusion in the upcoming years.
Source: Express Tribune
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