I will continue to write about Pakistan's United Bank Limited (UBL) innovations in information and communications technology to promote financial inclusion.
1. Benazir Income Support Programme (BISP) smart card pilot
The sharp rise in oil prices in 2008 was a catastrophe for underprivileged people. In response to this problem, the Government of Pakistan initiated BISP where families living below the poverty line could receive cash assistance every month. Initially, checks were delivered by mail to a beneficiary's door. In 2010, BISP partnered with UBL to pilot a smart card method.
The BISP card had a chip embedded on the front and a 2D barcode containing the Computerized National Identity Card (CNIC) number on the back. A BISP beneficiary was also given a PIN by mail in addition to the BISP card. Every month, the beneficiary could visit an OMNI agent who would scan the 2D barcode and asked the beneficiary to enter the PIN into the agent's mobile phone or keypad to authenticate the transaction. Once authenticated, cash would be paid to the beneficiary. With more than 2.5 million people receiving support, BISP was the largest cash transfer program in Pakistan in less than three years.
BISP smart card
2. The Watan Card Program - 2010 Floods
In July 2010, one-fifth of Pakistan's total land area was inundated following heavy monsoon rains, which affected approximately 20 million people. The National Disaster Relief Program partnered with Visa Inc., UBL and two other banks to disburse aid. UBL issued pre-paid Visa debit cards, also known as Watan cards, loaded each with Pkr 20,000 (US$230) in which beneficiaries were able to withdraw cash with no charge at an ATM or an OMNI agent. Moreover, Visa and the Government of Pakistan also established the infrastructure that allowed beneficiaries make purchases or withdraw cash in local merchants.
With a vast network of branchless banks, UBL was able to execute various humanitarian projects throughout Pakistan with methods that were similar with one another. As I mentioned in the previous post, even though UBL's programs were not mainly for financial inclusion purposes, people were 'forced' to be included in financial activities and became familiar with banking products. Having the infrastructure readily available, UBL was able to gain new clients in a relatively short period of time and accelerated financial inclusion for Pakistani citizens. As Ali Arshad Hakeem, National Database and Registration Authority Chairman, said:
'Our positive experience with the IDP Visa prepaid debit card last year increased confidence among the government and people of Pakistan that electronic payments are the future for aid disbursement, and an important first step towards financial inclusion.'
References:
1. Bankable Frontier Associates. 2011. Case Study: United Bank Limited Supports Cash Transfer Payments.
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