Microfinance Focus, October 13, 2011: With a Central Bank having a constructive regulatory approach for the branchless banking sector, a variety of business models involving a wide range of players, including mobile network operators, technology companies and courier business, is emerging in Pakistan. According to a CGAP report, the country has become one of the fastest developing markets for branchless banking in the world.  

SBP has issued four branchless banking licenses and is considering several others. The government is further encouraging innovation by piloting the use of branchless banking to distribute government payments.

SBP issued revised the branchless banking regulations in June 2011. The new regulation removed the requirement to capture biometric fingerprint information at the time of account opening for the lowest value accounts. Deploying the biometric capture technology to thousands of agents was expensive and created a significant barrier to customer enrolment.

According to CGAP, these changes to the regulation have unleashed yet more activity. Easypaisa, the longest-established service in the market launched by Tameer Microfinance Bank and their parent company, mobile network operator Telenor, now claims over half a million mobile accounts following a major campaign. The mobile account will complement their over-the-counter bill payment and domestic money transfer services which together have processed a total of Rs 43 billion (US$500 million).

UBL Omni’s branchless banking service launched in April 2010 by commercial bank UBL. UBL has won several contracts to disburse payments for nongovernment organizations and government schemes. UBL reports that at the end of June 5,000 agents were disbursing payments to 2 million recipients under these programs. Recently, UBL started accepting loan repayments for microfinance institutions (MFIs) and providing cash management facilities for businesses.

New players including Mobilink (one of the largest mobile network operator in Pakistan), TCS (logistics and courier company), Bank Alfalah, Askari Bank and MCB are expected to enter the branchless banking market.