Half of Pakistanis do not have bank accounts
The Pakistan Post with its 10,496 post offices mostly located outside the five major cities can start offering microfinance bank services, says the State Bank of Pakistan.
In its report, ‘Enhancing Financial Inclusion through Pakistan Post’ the central bank said that cross-country experience has shown that state-owned postal services can play a vital role in financial inclusion of the under-served and unbanked population, especially in the rural areas.
The data from 2015 says that 53% of Pakistan’s population are financially excluded. The total number of people with bank accounts in Pakistan is 38 million. The government aims to increase it to 65 million by 2023. Women account holders are numbered at 14.4 million and the target is 20 million by 2023. Currently, the Pakistan Post Office has 2.1 million users.
Countries like Japan are examples of how postal financial inclusion can help savings, investment in infrastructure, development of small and medium businesses and housing finance.
This will also help the Pakistan Post restructure, said the SBP. It was named among the entities flagged in the Asia Pacific Group’s ‘anti-money laundering – combating the financing of terrorism Mutual Evaluation Report of Pakistan’ for having grave deficiencies. The release of this report in October 2019 was followed by deliberations to significantly restructure the scope and operations of the Pakistan Post.
Pakistan Post offers a limited range of basic financial products and services, such as life insurance, money transfers and agency services to the Central Directorate of National Savings. It recently ventured into home delivery of pensions and home remittances.
It could branch into agriculture and livestock insurance schemes, generating local employment, and collection of financial data of previously unbanked households.
The Pakistan Post and National Bank of Pakistan can work together to deliver remittances, said the SBP. This may help the government achieve some targets set in the extended National Financial Inclusion Strategy 2019-2023.
The Pakistan Post may have to address a few weak links first. It has to train its staff so that they can deliver financial services.