‘Watan’ branchless banking partnership to reach up to 1.6 million Pakistan flood victims with cash transfers, other financial services
Waterloo - Nearly 1.6 million flood victims in Pakistan will soon flash plastic debit cards as a way to get back on their feet following last summer’s heavy monsoon rains which took many lives and left millions homeless.
For a large majority of these families, it will also be their first contact with the formal banking system, thanks to a unique collaboration between the Government of Pakistan, United Bank Limited, and Waterloo-based Mennonite Economic Development Associates, with funding for MEDA from the Bill & Melinda Gates Foundation.
In post-disaster situations, one of the most critical issues is how to deliver aid to victims in a timely and transparent way; logistical delays can be devastating. The “Watan” project aims to both quickly meet the basic needs of displaced families while at the same time revolutionizing Pakistan’s banking landscape by introducing Pakistan’s “non-banked” poor to the formal banking system. “Watan” means “Nation” or “Country” in Urdu.
The Government of Pakistan selected UBL, one of Pakistan’s leading financial institutions which operates the UBL Omni Branchless Banking platform, to issue VISA debit cards (called “Watan cards”), pre-loaded with Government funds of US $235, to 1.6 million families displaced by the flooding. Additional instalments, up to a total of about US $950 each, will assure users multiple opportunities to use (and get used to) the cards over the coming months.
“We hope this will be a ground-breaking experience in bank services, as well as bringing Pakistan’s branchless banking services to a whole new level, particularly in the rural economy,” says Kim Pityn, MEDA’s Chief Operations Officer.
The Bill & Melinda Gates Foundation, a private foundation based in Seattle, Washington, will contribute US$1.5 million to MEDA to support UBL’s management and administrative costs of procuring and distributing the cards to 70 districts in four provinces of Pakistan. The funding will also support MEDA to monitor and document the UBL Watan experience, in order to share its lessons with the wider microfinance and financial sector communities globally.
“This is an opportunity to learn how relief-oriented cash transfers can translate into increased financial inclusion,” says Joyce Lehman, Program Officer at the Bill & Melinda Gates Foundation. “Our hope is that this innovation will help poor people better access and manage their money during emergencies, and become familiar with tools that can help them build financial security over the long term.”
For UBL, the Watan partnership presents an unprecedented opportunity to crack the as-yet untapped unbanked customer market in Pakistan. “For us, as a commercial bank, we have the dual motivations of helping Pakistani citizens in a time of great distress, while at the same time entering into a whole new and untested market,” says Abrar Mir, Executive Vice-President of Branchless Banking at UBL. “Prior to this initiative, there were only 5 million total credit and debit cards in Pakistan. We will have expanded that by 1.6 million in less than three months. Our ultimate goal is that UBL can retain these new customers by teaching them the benefits of using our additional services such as savings, remittances, and bill payments that can be accessed via their Watan VISA debit cards.”
The Watan project began in November and will continue until December 2011.