Byline: Syed Fazl-E-Haider
Strategically located Balochistan offers tremendous opportunities for growth of financial sector as the security situation in the province continues to improve and the projects under the China-Pakistan Economic Corridor (CPEC), development of Gwadar Port and untapped natural resources have brought the province in the radar screen of international investors. Present government led by Prime Minister Imran Khan needs to work on a strategy to increase the relative wealth among the local population and create a middle-class that will increase demand for banking facilities in the province. The local investors and businessmen should be provided more supportive financial services, meeting their demand for financing solutions.
Pakistan Financial Inclusion and Infrastructure project has already been launched aiming at increasing access to financial services for households and businesses by improving usage of digital payments in the country. The project will be implemented by the recently-established Pakistan Microfinance Investment Company, the Central Directorate of National Savings and the State Bank's development finance group. In 2015, Pakistan launched the National Financial Inclusion Strategy (NFIS) with a vision to allow individuals and firms access to a range of quality payments, savings, credit and insurance services.
Pakistan's financial sector has transformed into a modern and sound financial sector dominated by private banks. The banking sector accounts for 75% of financial sector assets. The microfinance sector is significant in terms of financial access. Islamic finance is growing rapidly, and currently accounts for 11% of sector assets. The World Bank committed to provide $130 million finance for the project.
Unfortunately, Balochistan still lacks access to formal financial services including savings, credit, insurance and payments vis-a-vis formal financial intermediaries, at an affordable cost. There are the clear directives of the central bank to the banks to prepare at least a three-year plan to strengthen their presence in Balochistan by taking concrete steps to increase financing under the concessional schemes and to promote businesses in the province. The central bank has directed that all banks are needed to take measures to increase the number of branchless banking agents, branchless banking accounts and ATMs in the province and open branches in underserved districts of the province.