Branchless banking continues to branch out


Users transact Rs 85b via branchless banking despite the best efforts of those oh so mean banks
While branchless banking attracts more and more users, especially in the country’s unbanked rural areas, the limited banks’ authorisation to the agents is hindering its expansion. According to central bank’s quarterly report on branchless banking, the branchless banking had seen another quarter of growth on almost all fronts during July-March FY12. Growth in the agent’s network and number of mobile wallets was 19 percent and 14 percent, respectively, whereas the number and value of total transactions increased by 23 percent and 7 percent, respectively. During the review quarter, more than 25 million transactions worth Rs 85 billion or $ 938 million had been processed through branchless banking channels. “The average size of transaction has further reduced to Rs 3,367 showing that technology is reaching the previously un-banked poor,” the SBP observed, adding that the customers had transferred around Rs 99 million through their mobile to other m-wallet accounts, showing the adoption of technology by the common man. Rs 13.8 billion government to person payments and Rs 60 million salary payments had been disbursed during the quarter via mobile banking. “The growth in number of transactions is mainly due to the increasing volume of bill payments, person to person fund transfers, and airtime top-ups, which accounts for 42 percent, 32 percent and 10 percent respectively,” the SBP said. Similarly, it said, the growth in value of transactions was again owed largely to P2P payments. All other categories had either experienced slightly negative growth or had contributed a small share in total value. While considering share in total value, all bulk payments constituted almost 50 percent of the total value of transactions followed by P2P payments (36 percent) and bill payment (12 percent). Growth has been observed in loan repayment transactions as Rs 312 million were collected through BB agents. Both models, Easypaisa and Omni, were trying to increase their linkages with microfinance providers to allow microfinance borrowers to use BB channels for repayment of loans. Moreover, volume of salary disbursement has also in-creased mainly due to Easypaisa’s arrangement with government organisations for salary disbursement. Around Rs.13.8 billion have been transferred on account of G2P payments through the existing agents’ based banking. However, the current 14 percent growth rate of m-wallets showed some slowdown compared to the last quarter when the growth rate was around 40 percent. Similar trend is observed in deposits value. “The less-than-expected growth rate in m-wallets is owed to the fact that only 23 percent of the total active agents (around 24,101) are authorised by banks to open the m-wallet accounts,” the central bank said. The number of registered m-wallets has reached to 1.03 million at the end of the quarter under review in which the number of active m-wallets is about 53 percent. In addition, 5,573 debit cards have also been provided to mobile account holders, indicating efforts to create value proposition in m-wallets. The fast growing network of branchless banking has reached at 26,792 agents. This agents’ network now has foot prints in 89 percent of total districts in the country. The BB market is ready for expansion as while the Waseela Microfinance Bank, a subsidiary of M/s Orascom, has commenced its business operations as a nationwide microfinance bank, other banks are coming in.