There has been a sudden upsurge in the newly developed concept of mobile wallet (for instance Telenor EasyPaisa, Mobilink Jazz Cash etc) in Pakistan. This mode of financial transaction is an innovative method of financial inclusion for the unbanked population of the country. It saves the hassle of opening up a bank branch and also reduces the effort of the account holder. Additionally, the registration requirements are also very simple thus making mobile wallet a lucrative option for the masses.
Financial Inclusion Survey 2015
Pakistan’s Financial Inclusion strategy 2015 highlights the importance of mobile money in uplifting ‘digital transactional accounts’ and calls it an impetus for growth. Therefore, the recent rise in mobile wallet registration is seen as a welcoming sign. According to the data released by State Bank of Pakistan, the number of mobile wallet accounts have reached a startling figure of 13 million as of Jul-Sep 2015 as compared to only 1.8 million during Jul-Sep 2012. This is undoubtedly an encouraging number from the perspective of financial inclusion.
The question arises whether these wallet owners are from the banked segment or the unbanked segment of the population? Financial Inclusion Insights (FII) survey 2015 presents facts which can answer these questions. It conducts a survey of 6000 individuals and provides the composition of Pakistan’s wallet accounts. FII survey shows that most of these wallet owners had bank accounts while only 44% of wallet owners did not have any bank accounts.
However, when looking at the percentage of the base sample, these wallet owners with bank accounts only comprised of 8% of bank account holders. Conversely, unbanked wallet owners were only 0.61% of the unbanked sample.
Unbanked versus banked wallet owners
Unbanked wallet owners are drastically different from those who did not have a wallet account. There are a few social, cultural and economical factors which hamper the penetration of mobile wallet in rural areas.
Lack of awareness is one of the leading causes as 45% of the unbanked with no wallet accounts were unaware about its existence. Thus, communication programs could aid in generating awareness.
Gender discrimination is another vital aspect, as per FII 2015, 77% of unbanked wallet owners are males while only 22% of the population is female. Subsequently, it denotes the cultural taboo associated with women conducting financial transactions.
Ownership of mobile phone is also curbing people to opt for mobile wallet account. Only 56% of unbanked with no wallet accounts had their own mobile phones versus 94% of unbanked wallet owners with their own cellphones. This is primarily due to lack of resources as people above the poverty line are more likely to own a cell phone.
In addition, education is also a driving force in adoption of technology and shows major differences between the two segments. Unbanked wallet account holders as depicted in figure are better education versus unbanked with no wallet accounts. It seems that education is directly proportional to the technical literacy of using a mobile phone. As 57% of unbanked with no wallets are reported to not require any help in using a mobile phone. In contrast, 87% of unbanked wallet owners are reported to not require any help in using cell phones.
Despite highly encouraging numbers of mobile wallet adoption in Pakistan, mobile companies still need to do alot to reach out to the unbanked population of the country. There have to battle out the hurdles of social taboos, low literacy rate and low purchasing power of the popultion. Hence, mobile companies have to join hands with country’s civil society, NGOs and the government.
Rising GSTs on mobile phones could hamper this growth to a large extent. Government has to show strong commitment to mobile wallets for expanding the financial inclusion in the country. Therefore, all parties should combine their efforts for facilitating the growth of this sector.
Source: Pakistan Today