SBP gains global recog­ni­tion for eas­ing reg­u­la­tory norms

The Pak Banker - - Front Page -


The State Bank of Pak­istan (SBP) has gained global recog­ni­tion for its reg­u­la­tory role in microfinance and branch­less bank­ing by cre­at­ing an en­abling en­vi­ron­ment for their de­vel­op­ment in Pak­istan.

The world's renowned news­pa­per Fi­nan­cial Times and the World Bank have praised cen­tral bank of Pak­istan for its in­no­va­tive ap­proaches in ex­pand­ing the ac­cess to fi­nan­cial ser­vices for the un­banked and un­der­served pop­u­la­tion of the coun­try.

In an ar­ti­cle pub­lished in Fi­nan­cial Times on Novem­ber 06, says "Pak­istan has one of the best reg­u­la­tory en­vi­ron­ments in the world for microfinance and one of the fastest­grow­ing microfinance sec­tors, with 3 mil­lion bor­row­ers. It is also one of the most in­no­va­tive places in the world for mo­bile bank­ing ser­vices, partly due to the State Bank of Pak­istan's moves to en­cour­age the mar­ket".

The Con­sul­ta­tive Group to As­sist the Poor (CGAP) of the World Bank in its re­cent pub­li­ca­tion has also high­lighted Pak­istan as the fastest grow­ing branch­less bank­ing mar­ket in the world and a lab­o­ra­tory of in­no­va­tion.

The SBP has been play­ing a lead­ing role while work­ing closely with the in­dus­try through var­i­ous pol­icy and strate­gic ini­tia­tives to trans­form the fi­nan­cial mar­ket into an equitable sys­tem of ef­fi­cient mar­ket-based fi­nan­cial ser­vices to the hith­erto ex­cluded poor and marginal­ized seg­ments of the so­ci­ety.

It may be men­tioned here that the SBP has moved be­yond its tra­di­tional role for mod­ern­iz­ing the mar­ket in­fra­struc­ture and im­prov­ing risk man­age­ment frame­work for microfinance in­dus­try. In par­tic­u­lar, SBP has in­vested sub­stan­tially for es­tab­lish­ing microfinance-spe­cific Credit Bureau, launch­ing na­tion-wide Fi­nan­cial Lit­er­acy Pro­gram, car­ry­ing out var­i­ous mar­ket sur­veys and stud­ies, trans­form­ing Microfinance Banks (MFBs), and chan­nel­ing Rs. 6 bil­lion com­mer­cial fund­ing for MFBs through credit en­hance­ment mech­a­nism for lend­ing to new bor­row­ers. The cen­tral bank is also sup­port­ing ca­pac­ity build­ing and innovations through smart sub­si­dies for microfinance play­ers and larger fi­nan­cial ser­vices providers un­der the DFID-funded Fi­nan­cial In­clu­sion Pro­gram (FIP).

As a re­sult of these ef­forts of SBP, ten microfinance banks are now oper­at­ing in the coun­try. The MFBs have also strength­ened their cap­i­tal base through cap­i­tal in­jec­tion, and are now well-cap­i­tal­ized. All MFBs are pri­vately owned by lo­cal and in­ter­na­tional in­vestors in­clud­ing banks, de­vel­op­ment agen­cies,

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