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Stakeholder Engagements: Key Issues and Recommendations Pakistan Microfinance Network September 19, 2013

Stakeholder Engagements: Key Issues and Recommendations Pakistan Microfinance Network September 19, 2013. Presentation Outline. Background Key issues identified Recommendations. Background. Stakeholder consultations by PMN (July – Sept 2013) Commercial banks involved in G2P payments

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Stakeholder Engagements: Key Issues and Recommendations Pakistan Microfinance Network September 19, 2013

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  1. Stakeholder Engagements: Key Issues and Recommendations Pakistan Microfinance Network September 19, 2013

  2. Presentation Outline • Background • Key issues identified • Recommendations

  3. Background • Stakeholder consultations by PMN (July – Sept 2013) • Commercial banks involved in G2P payments • Provincial government departments in Balochistan, Khyber-Pakhtunkhwa, Punjab & Sindh • Planning and Development, Finance, Health, Education, Social Welfare, Labor, Zakat and Ushr, Bait ul Maal, PDMAs • Provincial roundtables

  4. Scope of G2P Payments: Some Examples KPK • Education: • Three programs, totaling almost PKR 1 billion • Health: • Two programs, totaling PKR 500 million • Health insurance program, EUR 10 million • Youth: • Three programs, totaling almost PKR 1.1 billion • Balochistan • Religious and Minority Affairs: PKR 502 million • Punjab • Education: • School education: PKR 1.0 billion • Higher education: PKR 750 m • Pensions: PKR 66 billion • Sindh • Incomesupport program: PKR 2 billion

  5. Enabling Factors Recognition of benefits within Government Banks have experience of working with the unbanked Understanding of challenges and limitations

  6. Key Issues Identified (I/III) • Policy direction on G2P Payments and use of technology needs to be developed at the highest levels • Who will be the ‘Champion’ within provincial governments? • One-size-fits-all – not going to work POLICY

  7. Key Issues Identified (II/III) • Capacity of provincial government in evaluating and implementing technology based payments is limited • Lack of financial literacy and awareness is a curtailing factor • Thinness of financial infrastructure in certain regions • Business case for banks of focusing on ultra poor as a segment ECO SYSTEM

  8. Key Issues Identified (III/III) • High verification costs to financial institutions (as required by regulations) are a limiting factor • Interoperability in branchless banking • Move towards biometric verification for enhanced transparency and accountability has its advantages but also challenges OPERATIONAL

  9. Recommendations (I/II) • National and provincial level policies on use of technology based payments for G2P programs may be considered • Continued support from SBP and NADRA to facilitate banks in reaching out to the unbanked • Donors and multilaterals should consider developing technical assistance programs for provincial governments • Need to invest in financial literacy at a much greater scale and including the ultra poor as a target segment; co-ordination of efforts

  10. Recommendations (II/II) • Technical guide on the different payment technologies • Exploring the deployment of biometric verification systems as a next step towards transparency and accountability

  11. Thank You

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