WITH half its adult population excluded altogether from the financial system, Pakistan is well positioned to reap the gains of financial inclusion. While the other half is served in some capacity or the other, only 16pc of the total is formally banked, meaning most of those using the banking system do so peripherally, such as presenting a cash cheque to collect payment. The National Financial Inclusion Strategy has made some gains through the use of mobile banking instruments, but much room for growth remains. Big push strategies are key to this, such as routing all government payments through mobile banking channels. The gains from a growing financial inclusion approach are innumerable, starting with documentation of small ticket transactions, but also for business ventures that are made possible, and the voluminous data that can be mined to fine-tune other policy measures.

One such step has just been taken in the form of a partnership between Nadra and Mastercard. The idea is to make every CNIC a potential payment portal, and use the CNIC number and Mastercard’s clearing system to vastly increase the potential population that can be targeted in further financial inclusion initiatives. The idea will take time to find traction, but it deserves sustained attention from all concerned, within Nadra and the State Bank to ensure that it eventually strikes roots. Nadra is an example of how large databases can be potential game changers enabling further business development. Their database has proved invaluable in promoting mobile communications as well as financial inclusion initiatives. Now it looks like the ground is being laid for a giant leap into a future where even international remittances can be sent electronically directly between sender and beneficiary. The potential of such partnerships is enormous. Innovative approaches such those being deployed in the financial inclusion efforts are the real unsung game changers that are currently being rolled out.

Published in Dawn, January 20th, 2017