Branchless Banking A Revolution in the Making in the Financial Services Industry. Ghazanfar Azzam CEO, Waseela Microfinance Bank

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1 WaseelaMicrofinance Bank Branchless Banking A Revolution in the Making in the Financial Services Industry Ghazanfar Azzam CEO, Waseela Microfinance Bank

2 WaseelaMicrofinance Bank (An overview) Waseela Microfinance Bank Limited is solely owned by Orascom Telecom Holding S.A.E ( Orascom Telecom ) & a sister concern of Mobilink (PMCL) Waseela Microfinance Bank Limited (WMBL) is the 10th licensed microfinance bank in Pakistan 6th Microfinance bank having nationwide operating mandate Target Market a combination of: Low and Middle income Savers Small Entrepreneurs Farmers Cell phone Users Branchless Banking through the biggest Telecom operator in Pakistan Branchless Banking through the biggest Telecom operator in Pakistan

3 WaseelaBank & Its (Envisaged) Role in Pakistan's Financial Sector Core (Micro Banking) Business Physical infrastructure & capacity to monitor & control Branchless Banking (as it is known and understood now) Synthesis of core banking and branchless banking (in future where boundaries between the two will become invisible)

4 Our Vision Vision To become a market leader in branchless banking, mobile banking and micro financial services offering simple, innovative and value added products and services to the general public.

5 The need for banking to be made easy in Pakistan (The Global Context) Source:

6 The Case of Pakistan % 67% Million USD 1, Population Unbanked Population Cellular Penetration Per Capita Income Cellular Operations Banks

7 Distribution & Alternate Channels Branchless Banking, Mobile Wallet, OTC, Bill Payment ATM, Debit Cards & Internet Banking Branches Deposit Mobilization & Loan Disbursement

8 Branchless Banking Opportunity in Pakistan Lowest Banking Penetration United Kingdom United States India Pakistan Philippines Million population 50% Literate 67% Cellular Penetration Internet Penetration of 11% 15% Banking Penetration Approx. $8 Billion transacted outside the banking industry per year $13.8 Billion annual domestic remittance (formal + informal) Around $7 billion worth of utility bills paid per annum Int l Remittance of $18 billion expected in 2012 (formal + informal) Number of branches per 100,000 people Number of ATMs per 100,000 people Source: State Bank of Pakistan

9 Market Sizing (Total) Market Sizing (Formal channels) Financial Service / Market Size Domestic Remittances USD 8.4 bil USD 9.8 bil USD 11.5 bil USD 13.5 bil International Remittance USD 15 bil USD 16.8 bil USD 18.7 bil USD 20.8 bil Utility Bill Payment (number) 503 mil 554 mil 598 mil 641 mil Retail Payment (number) 498 mil 538 mil 627 mil 716 mil Market Sizing (Informal channels) Financial Service / Market Size Domestic Remittances USD 5.4 bil USD 6.3 bil USD 7.4 bil USD 8.7 bil International Remittance* USD 2.7 bil USD 2.5 bil USD 2.4 bil USD 2.3 bil *SBP and Government of Pakistan have started Pakistan Remittance Initiative (PRI), to encourage international remittances through formal channels. Latest SBP reports show a decline in international remittances through informal channels Source: Figures for projected yearly growth. Statistics Bureau, Economic Survey of Pakistan, SBP reports & market intl

10 Market Share Domestic Remittances International Remittances* Bill Payments 19% 17% 11% 4% MFS / Branchless Banking Pakistan Post 3% Exchange Companies Pakistan Post MFS / Branchless Banking Banks Banks Banks & Pakistan Post 77% 80% 89% *18-20% of international remittances are intermediated by Money Transfer Organizations (MTOs) like Western Union, MoneyGram etc. Source: Market intel, Statistics Bureau, Economic Survey of Pakistan, SBP reports, News articles

11 Branchless Agent Network Conventional Banking Current Branch Strength of Scheduled and Microfinance Bank in Pakistan, excluding foreign banks is just over ten thousand (10,000) Branchless Banking Current agent network of branchless banking in Pakistan is approximately thirty thousand (30,000) 2013 Outlook Major increase of branchless agents expected in 2013 due to new players coming into the market Expected branchless agents population to be in excess of forty thousand (40,000)

12 Branchless Banking Evolution L I O N E F A T C V I N E A E N R S N A D N H I N I I A D N C N S T M O G I T B S I A D N R A E U A O N O O B E L R R L V S N A M D R A T S O I C A G E A I N A I B R A N C H L E S S B A N K I N G A E N G O O M T A I G S I L C O N M R O R E I L T E U N L V K N R P P L E N C A N R G U T T E R O M T R C C A S F P O R F I R Y A I N I P U A D A E T E R E C O A N Y U T E T M D D S E N Y D M C E S A I I S M S E T N T S E N S C T B N T E A U T N R S C S E R EM N T

13 Branchless Banking A major step towards Financial Inclusion

14 Thank You! شکريہ!