Monday, January 18, 2010

Bringing finace to Pakistan's poor: lessons for other regions?

"Imagine your life if you had no access to banks, ATMs, credit cards, or savings and checking accounts -- just cash that you needed to hide or carry around. It would be hard to save, plan, get ahead, take chances, or feel secure". This is a quote from a CNN article. In the article information related to the Telenor product EasyPaisa (recently launched in Pakistan) is given.

Pakistan is a very big country. This is the second most populous Islam country (after Indonesia). The people of Pakistan are very hard working with an ingrained entrepreneurial spirit. One sees small merchants everywhere and trading is commonplace. The launch of EasyPaisa should be seen in this context and some of the comparisons with mPesa are very insightful:
  • Pakistan is significantly larger than Kenya (180 to about 40 million people). Safaricom is the dominant mobile operator with a market share in access of 70%, whereas Pakistan is highly competitive with five incumbent operators.
  • EasyPaisa is a product launched by a bank (owned by the mobile operator - the operator bought a bank in order to launch the product), whereas mPesa is a product launched by a mobile operator. mPesa is not positioned as a banking product, wheras EasyPaisa's objective is to open a bank account (with savings capability) for every subscriber.
  • EasyPaisa started with a few simple products that could only be serviced by agents. This enabled them to grow, motivate and train the agent network, prior to the launch of the banking product aimed at individuals. According to the article, Telenor has 150 000 merchants to convert to a target of 20 000 agents within a year. mPesa currently supports more than 10 000 agents.
It would be interesting to see the Pakistan service expand and grow and to learn new lessons in a country with distinct differences.

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