Al Hammond

Pakistan Journal: Reaching Rural Households With Technology

I was in Karachi this past weekend, where I addressed a packed seminar, Improving Access to Financial Services: Mobile Money Transfer and Beyond, convened by the Asian Development Bank and the State Bank of Pakistan. If audience enthusiasm is any indication, financial service provision over mobile phones continues to gain momentum in both development and private sector circles.

The topic of my talk was low-cost networks and their role in providing all kinds of services–not just financial–to rural communities where there is currently no coverage. I believe that connectivity is a key enabler to all kinds of business development, and that the other important ingredient is microfinance. Despite the rapid spread of mobile phone coverage and the exponential growth of microfinance (legitimized by Muhammad Yunus? Nobel Peace Prize), there are still millions–billions–of rural, low-income villagers who remain off the network. Connectivity and microfinance can jump-start the latent economic potential of these billions–by giving them access to finance, markets, information, customers, suppliers, government tenders, large companies…the list goes on.

Another presenter at the seminar was a team from Globe Telecom (Philippines) who spoke about their G-Cash platform (previously noted on NextBillion). They now claim it can be implemented on any mobile system–a not-so-subtle indication that G-Cash is going to scale up, and soon. I am beginning to wonder if G-Cash is going to be one of the first BOP innovations to blow back to the West/North, and if we?ll be using the system here in the United States sooner than expected.

I don?t want to overlook remarks made by Dr. Shamshad Akhtar, the head of Pakistan’s state bank–effectively the chief banking regulator–who urged private sector banks to work with technology providers to make financial services over mobile phones happen. This was like getting implicit approval before the fact–a huge step in an area that often gets bogged down by complicated and contradictory regulations.

Pakistan now has 130 million mobile subscribers, and that number is expected to more than double within the next 18 months. Compare that to the number of microfinance clients–less than 1 million borrowers. The implication is clear: if the country is serious about expanding access to financial services, they have to go digital.