Experts for increasing literacy, developing legal infrastructure to promote financial inclusion

ISLAMABAD: Financial experts Tuesday recommended for increasing financial literacy through government programmes, replacing cash withdrawal with non-cash method and investing in legal infrastructure to promote financial inclusion in South Asian countries for their development and economic uplift.

Addressing a two-day conference on 'financial inclusion strategies in South Asia: methodology and perspectives' they asked for promoting micro-finance to introduce lending culture, besides easing the documentation requirements and boost competition in the financial institutions.

The seminar was organized by Zarai Tarqiatie Bank Limited (ZTBL) and World Bank in collaboration with Association of National Development Finance Institutions in Member Countries of the Islamic Development Bank (ADFIMI).

The event was aiming at promoting the financial inclusion to eliminating the poverty and promote the micro-finance as well as create awareness of the importance about the financial inclusion.

The other objective of the event was also to review the state of financial inclusion in South Asia and share the good practices in conventional and Islamic finance in the region.

Speaking on the occasion, President ZTBL Syed Talat Mahmood said government had sponsored number of guarantee facilities and subsidized landing schemes to encourage the financial inclusion.

Despite these efforts, the level of financial inclusion remained low as 10.3 percent adults had an account with the formal financial institutions.

He said the ratio was bellow both in South Asian average of 33 percent and the average for over all middle income countries of 41 percent.

About 51 percent of adults used neither formal nor informal products, while 36 percent of adults saved but only 4 percent with the formal financial institutions, he added.

He informed that ZTBL was embarking upon the modern day banking and financial services through adopting and offering services including alternative delivery channels like internet banking, channelizing funds inflows, remittances into investment and enhanced financial access to marginalized farmers through service providers and crop production companies.

The president said the ZTBL was also working on the development synergies to enhance adaptability and effectiveness of information communication technologies through development of mobile phone application.

He said the bank was also working on a plan to offer Sharia Complaint Banking and financing facilities through initiation of Islamic banking.

Addressing the event, Dr Zamir Ahmad Head of World Bank Global Islamic Finance Development Center said main goals of financial inclusion were eradication of poverty, financial stability and economic growth.

He said access to financial facilities was the major hurdle in financial inclusion in South Asia as about world's 20.6 percent unbanked population was living in India, where as Pakistan was unbanked percentage was 5.2 percent.