Growing the SME Sector through Financial InclusionM. Mudassar Aqil

CEO, FINCA Microfinance Bank Ltd.

March - 2019

The number of SME borrowers has been largely stagnant over a period oftime – 135K in 2014 vs. 180K in 2018

There is little incentive and readiness on the part of commercial banks tofocus on SME financing.

Government wants to increase the SME borrowers 4X and private creditshare 2X by 2023

SMES: ACCESS TO FINANCE

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THE PERFECT STORM: KEY ENABLERS ARE IN PLACE TO CATALYZE DFS

150 Million Cellular Subscriptions

56 Million Subscribers

58 Million Subscribers

ATMs: 14,000

Active Mobile Banking Agents: 200K

Smartphone ownership by 2020: 51%96% of Adult Population

Biometric verified SIMs

Mobile Wallets: 19 Million

Bank Users: 25 million

Number of registered e-Commerce Merchants: 1,094

POS: 53,500

Plastic Cards:40.9 Million

Switches/Gateways:

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BUILDING THE DIGITAL BUSINESS PLATFORM: SME FINANCING

Monitoring & control through risk based sampling &

scorecards

Scale up, secure, integrate

Open banking platform & marketplace

Risk

Analytics

Digitize Borrower Acquisition & portfolio management• Automation; Rule-based tools

• Required documentation captured electronically

• Supplement customer information from external sources

• Pre-screening Models• E-signatures

• Algorithm based Credit Scoring Models/Benchmarking

• Match borrower profile and needs

• Risk-based pricing• Automated credit decisions with

option for manual review• Streamlined approval, focus on

outliers

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CASE STUDY

Industry firsts:

● First Revenue and Brand Partnership between Bank & Fintech

● First App in Pakistan to launch QR Code Payments

● First and only Payment Service to have 0 MDR

● First bank to launch Remote Digital account opening

● First App to introduce Referral and Invite feature.

● First Payment Service to facilitate Cash-in at Doorstep

● First Payment service app that allows Ticket bookings for Cinemas , Airlines and Events

● First Mobile Wallet to enable Insurance & Claims processing through App

● First Payroll solution with integrated HRM, Vendor management and analytics.

● First Integrated Marketplace/Digital Wallet

Center of a perfect Storm

BANKING + FINTECH: COLLABORATION FOR GROWTH

• Proven AI, Computing and Risk Management capabilities; Focus on SME Financing• Through sharing these technological capabilities, MYbank aims to enable 1,000 financial

institutions to provide more cost-effective financing services to 30 million SMEs andfarmers in China in the next three years

• By combining big data analytics and online technologies, WeBank is able to provide aninnovative financial product: totally online, no paperwork or collateral, and withimmediate evaluation and access to funds. 310 Model

• Provides trade finance through its digital platform. Loans for businesses are typicallydesigned to tide over payment or receivables cycles

• It has tied up with eight banks and four non-banking finance companies(India)

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