FINCA Microfinance Bank is all set to bring digital disbursement solutions in rural and semi-rural areas in an effort to improve digital literacy and cost of delivery.
The loan processing time would be reduced to 48 hours as the bank will use gadgets to gather all necessary required details of the clients through biometric verification systems. SimSim mobile wallet, the recently launched bank’s app is also going to help increase the foothold in rural localities.
FINCA Impact Finance Global President and CEO Andree Simon, speaking to the journalists said that he believed that the introduction of digital financial services in Pakistan could help them reach the untapped market, which is huge. She added that Pakistan’s microfinance sector has been developing and bank operations have been expanding, however financial inclusion still is an issue.
She said that financial inclusion in Pakistan is dependent on physical verifications on ground for a very long time and is slow as well. This adds more time to the verification process as the officer has to meet the clientele in person and that makes it expansive.
The digital finance has already reduced 90% of the direct expenses in other countries and will reduce the cost significantly in Pakistan as well.
She further added that with this product, FINCA will be able to reach villages without physical presence, it will also help in creating awareness among people and educate them on using mobile phones for financial inclusions.
People in rural areas have very limited means of access to technology and they are also not very literate, using smart phones has made it easier for companies like FINCA to educate them about financial inclusions.
FINCA started its Pakistan operations in May 2013 and has been growing successfully with year-on-year growth of 63% in 2015 and 86% in 2016 with a profit-after-tax of Rs631 million. It has disbursed around Rs 37 billion in 43, 000 loans since 2013.
Since around 60% of loan disbursements bank made are for agriculture and livestock loans, the bank management is looking to focus on this key sector as it borrows six times more from the informal sector than the actual disbursement of Rs700 billion from formal channels.
She further added that they were looking to explore agriculture loans and were involved in active discussions to introduce new, diversified and customized product line, recognizing the opportunity the agriculture sector has to offer.
Pakistan is a very opportunistic country; its population density is high and has a talented workforce with a very strong and growing business environment.
Financial inclusion has not yet reached a level and still majority of people don’t have a bank account which is an issue. She expressed hope to bridge this gap through digital financial inclusion in coming years.