Telenor Microfinance Bank
The central State Bank of Pakistan calculated that branchless banking in Pakistan grew roughly 10% in the three months to the end of September 2018, the most recent period reviewed, with a total of 43.1 million accounts.
Some 2.5 million transactions are conducted daily through mobile devices. Similar growth was observed in branchless banking deposits during the quarter: these rose 8% to reach PRs16.5 billion ($118 million).
In Pakistan, the lion’s share of that expanding market belongs to Telenor Microfinance and its digital arm, easypaisa. Indeed, digital and microfinance have tended to go together in Pakistan ever since Norwegian telecom firm Telenor took full control of microfinance pioneer Tameer in 2016.
Leveraging Telenor’s status as one of Pakistan’s biggest mobile phone carriers, easypaisa reaches the parts of Pakistan that the big banks in Karachi can’t or won’t get to, offering the unbanked a portfolio of financial services: payments, e-wallet savings, transfers, even rudimentary insurance. As many as half of those daily transactions are made through the easypaisa platform.
And Telenor Microfinance promises to be even more ubiquitous: in November, the Pakistani authorities approved the acquisition by China’s Alibaba of a 45% shareholding in the bank for $184.5 million. The Chinese are expected to channel their Alipay platform through the Telenor network, reaching beyond the poor who use Telenor for microfinance to the massive so-called ‘sandwich layer’ with semi-formal financial arrangements, believed to number up to 100 million in Pakistan.
Telenor Microfinance will push on without its popular chief executive, Shahid Mustafa, who stepped down in February: at the time of going to press, his permanent successor had not yet been appointed.