The State Bank of Pakistan (SBP) recently launched the Financial Innovation Challenge Fund (FICF) with an allocation of GBP 10 million (USD 16.3 million) in an effort to spur innovation and broaden accessibility to financial services. FICF, which is part of the GBP 50 million (USD 81.3 million) Financial Inclusion Programme funded by the United Kingdom’s Department of International Development (DFID), was announced at the “Branchless Banking: Government to Person (G2P) Payments” conference this month.
Speaking at the conference, State Bank of Pakistan (SBP) Governor Shahid Kardar said that FICF would support G2P payments, which are intended to cut costs, improve transparency and encourage the adoption of financial services by poor people in Pakistan.
The fund will also hold contests geared towards financial innovation. “A non-government body will be leading the development in this initiative,” said Haroon Sharif of DFID. The competitions will be open to academic institutions, businesses, NGOs, and microfinance institutions (MFIs). Further details on these contests have yet to be released.
By Rick Altieri, Research Associate
About the State Bank of Pakistan (SBP): Established in 1956, the State Bank of Pakistan (SBP) is the nation’s central banking authority. SBP performs several primary functions: to regulate and supervise the nation’s financial system, to conduct monetary policy and to manage public debt. In addition, SBP acts to develop the financial framework of the country, to provide credit to priority sectors and to help in the Islamization of the banking system.
About the Department for International Development (DFID): Department for International Development (DFID) is the department of the British government responsible for carrying out overseas development work. In fiscal year 2008/2009, the British government, through DFID, spent GBP 5.5 billion, the equivalent of over USD 8.3 billion, on international development. The major spending areas included government and civil society (25 percent), health (21 percent), economic growth (16 percent), education (14 percent), and humanitarian assistance (10 percent).
Sources and Resources:
The Express Tribune: “SBP Launches Financial Innovation Programme”, May 10, 2011. http://tribune.com.pk/story/165227/sbp-launches-financial-innovation-programme/
Daily Times: “SBP to launch Financial Innovation Challenge Fund”, May 8, 2011. http://www.dailytimes.com.pk/default.asp?page=2011%5C05%5C08%5Cstory_8-5-2011_pg5_4
MicroCapital’s Microfinance Universe Profile: State Bank of Pakistan(SBP), https://www.microcapital.org/microfinanceuniverse/tiki-listpages.php
MicroCapital’s Microfinance Universe Profile: Department for International Development (DFID), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Department+for+International+Development+%28DFID%29
MicroCapital.org Brief, March 21, 2011, “State Bank of Pakistan (SBP) Announces Launch of $16m Financial Innovation Fund, Support for Mainstreaming Microfinance into Formal Banking System.” https://www.microcapital.org/microcapital-brief-state-bank-of-pakistan-sbp-announces-launch-of-16m-financial-innovation-fund-support-for-mainstreaming-microfinance-into-formal-banking-system/
MicroCapital.org Brief, December 3, 2010, “State Bank of Pakistan (SBP) Increases Minimum Capital Requirement for Microfinance Banks.” https://www.microcapital.org/microcapital-brief-state-bank-of-pakistan-sbp-increases-minimum-capital-requirement-for-microfinance-banks/
MicroCapital.org Brief, November 4, 2010, “State Bank of Pakistan (SBP) Launches $116m Concessional Financing Scheme Through Development Finance Institutions in Flood-Affected Areas, Advises Microfinance Banks to Reschedule Loans.” https://www.microcapital.org/microcapital-brief-state-bank-of-pakistan-sbp-launches-116m-concessional-financing-scheme-through-development-finance-institutions-in-flood-affected-areas-advises-microfinance-banks-to-reschedule/
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