Pakistan has been admired in some quarters for its policies on financial inclusion and the framework that exists to encourage it. But, the fact remains that in a country of more than 180 million people, there are still (including duplications) only 35 million banking accounts. While the microfinance industry continues to make steady progress, branchless banking may be about to go into overdrive – boosted, curiously enough, by anti-terrorist measures.
Microfinance in Pakistan had just short of 3 million borrowers in the first quarter of 2014, according to the Pakistan Microfinance Network, and nearly 6 million savers. Total loans were Rs57bn ($555m), or less than 1% of the total outstanding bank stock. The biggest lender is Khushhali Bank, in which United Bank (UBL) has an effective 30% stake. Its revenues increased by about one-third in 2013, thanks partly to improved risk assessment and monitoring.
