Mobile wallets (Such as Telenor EasyPaisa, Mobilink Jazz Cash etc) are often heralded as an innovative source of financial inclusion for the unbanked. And rightly so, mobile wallet accounts bypass the necessity of building and staffing a bank branch, and it also relieves its account holder from making the effort of going to a bank branch. Similarly, at least for Pakistan, its registration requirements makes it an easier option than a regular bank account.
Pakistan’s Financial Inclusion strategy for2015 recognises the importance of mobile money in expanding “digital transactional accounts”, which the strategy recognises as a key driver. In this regard, the recent upsurge in the number of mobile wallet registration should be encouraging. Just to put it in perspective; as perdata from the State Bank of Pakistan, at the end of Jul-Sept 2012, the number of wallet accounts was at approximately 1.8 million, however by Jul-Sept 2015 the same has risen to 13 million.
It is definitely a heartening increase especially when seen from a financial inclusion angle. But it is important to consider the demographics of these new wallet owners, are they predominantly from the banked segment or the unbanked one? A relevant source for answering these questions is the Financial Inclusion Insights (FII) survey 2015 for Pakistan. The FII 2015 is a nationally representative survey with a sample of 6000 individuals. Besides covering other aspects of Pakistan financial inclusion landscape, the FII also provides interesting insights into the probable demographic composition of Pakistan’s wallet accounts.
To begin with, the FII 2015 predicts that most wallet owners already had bank accounts, more specifically only44% of mobile wallet owners did not have bank accounts. When seen as a proportion of their base samples, wallet owners with bank accounts constituted 8% of bank account holders, however, unbanked[1] wallet owners were only 0.61% of the unbanked sample.
So who are these unbanked wallet owners? And how are they different from the unbanked who did not opt for a wallet account?In the following paragraphs will go over a few significant differences between unbanked mobile wallet owners, and the unbanked who do not have a wallet account.
Awareness about mobile money seems to be low among this group as 45% of unbanked with no wallet accounts were simply unaware about any of mobile money brands out there. It won’t be wrong to assume that almost half of the unbanked with no wallet account don’t even know about the existence of a mobile money option.
Gender differences were also apparent, as FII 2015 predicts 77% of unbanked wallet owners to be male, and only 22% to be female. This might be because of cultural constraints in Pakistan that discourage
Mobile wallets (Such as Telenor EasyPaisa, Mobilink Jazz Cash etc) are often heralded as an innovative source of financial inclusion for the unbanked. And rightly so, mobile wallet accounts bypass the necessity of building and staffing a bank branch, and it also relieves its account holder from making the effort of going to a bank branch. Similarly, at least for Pakistan, its registration requirements makes it an easier option than a regular bank account.
Pakistan’s Financial Inclusion strategy for2015 recognizes the importance of mobile money in expanding “digital transactional accounts”, which the strategy recognizes as a key driver. In this regard, the recent upsurge in the number of mobile wallet registration should be encouraging. Just to put it in perspective; as perdata from the State Bank of Pakistan,at the end of Jul-Sept 2012, the number of wallet accounts was at approximately 1.8 million, however by Jul-Sept 2015 the same has risen to 13 million.
It is definitely a heartening increase especially when seen from a financial inclusion angle. But it is important to consider the demographics of these new wallet owners, are they predominantly from the banked segment or the unbanked one? A relevant source for answering these questions is the Financial Inclusion Insights (FII) survey 2015 for Pakistan. The FII 2015 is a nationally representative survey with a sample of 6000 individuals. Besides covering other aspects of Pakistan financial inclusion landscape, the FII also provides interesting insights into the probable demographic composition of Pakistan’s wallet accounts.
To begin with, the FII 2015 predicts that most wallet owners already had bank accounts, more specifically only 44% of mobile wallet owners did not have bank accounts. When seen as a proportion of their base samples, wallet owners with bank accounts constituted 8% of bank account holders, however, unbanked[1] wallet owners were only 0.61% of the unbanked sample.
So who are these unbanked wallet owners? And how are they different from the unbanked who did not opt for a wallet account?In the following paragraphs will go over a few significant differences between unbanked mobile wallet owners, and the unbanked who do not have a wallet account.
Awareness about mobile money seems to be low among this group as45% of unbanked with no wallet accounts were simply unaware about any of mobile money brands out there. It won’t be wrong to assume that almost half of the unbanked with no wallet account don’t even know about the existence of a mobile money option.
Gender differences were also apparent, as FII 2015 predicts 77% of unbanked wallet owners to be male, and only 22% to be female. This might be because of cultural constraints in Pakistan that discourage female wallet adoption. As per the latest FII data, Pakistan has the highest percentage of financially excluded women among comparator countries.
Mobile phone ownership was another differentiating factors as only 56% of unbanked with no wallet accounts had their own mobile phones, compared to 94% of unbanked wallet owners who had their own cellphones. This could be related to poverty, as per FII 2015 respondents above the poverty line were more likely to own a mobile phone compared to those below the poverty line.
Educational attainment between the two groups is also significantly divergent, as unbanked wallet account holders tend to be better educated than the unbanked with no wallet accounts, as shown in Figure 1. Probably related to education is the technical literacy of mobile use, and on that front 57% of the unbanked with no wallet, accounts reported to not requiring any help while using mobile phones. In comparison, 87% of the unbanked wallet owners reported to not requiring any help while using mobile phones. Implying that unbanked wallet owners are likely to be more tech savvy when compared with the unbanked with no wallet accounts.
The increase in Pakistan’s wallet adoption is encouraging but FII 2015 data indicates that when it comes to reaching out to the unbanked, Pakistan’s mobile money companies might be up against impediments such as; patriarchal norms, low literacy as well as a weak purchasing power. Such problems indicate that their solution might lie beyond the ambit of mobile money companies and require the attention of other stakeholders such as Pakistan’s civil society, donor community as well as the Government.
For instance there is a dire need for advocacy to address the stigma associated with mobile phone possession for women.The recent 100% increase in GST on mobile phones is another example where the government is seemingly overlooking the importance of mobile phones for financial inclusion. In all it has to be a combined effort to enable Pakistan to reap the benefits of mobile money, just having the requisite mobile money infrastructure is not enough.
Source: http://www.pakistantoday.com.pk/2016/09/18/business/pakistans-rising-mobile-wallet-adoption/