branchless banking deposits have grown to rs 503 million. the average size of branchless banking transactions is rs 3, 855 ( us $ 43 ) which shows that mobile phone technology and agentbased banking are helping access to financial services by the hitherto unbanked poor. early uptake of mobile banking is also beset with challenges. the existing agents network needs to be further capacitated to generate new demand ; handle and service even larger volumes of transactions to establish the business viability of bb operations. going forward, sbp will be initiating actionable research on the supply and demand side in collaboration with the branchless banking ecosystem for further development of such services in pakistan. the study will focus on opportunities such as : bis central bankers ’ speeches i. estimation and development of a retail payments system strategy : the initial bb business is based on handling large volumes of transactions. therefore payments services such as bulk g2p, b2b, b2p payments and retail p2p payments are a necessity for survival in its infancy phase. identification and preparation of a matrix of these payments will be helpful in highlighting the volumes in payments services and opportunities for future development and partnerships for establishing the business case / viability and promotion of branchless banking in pakistan. ii. research into agents ’ economics and business case and identification of key bottlenecks including public policy issues such as taxation of bb services etc. iii. research into agents ’ selection and management for identification of challenges, particularly in the management of liquidity at agents ’ outlets, quality of service for maintaining minimum service standards, security systems & controls for fraud prevention and detection, complaint handling and redress mechanism, and agent disqualification and delisting mechanism etc. interventions will be launched to enhance the agent ’ s credibility. iv. research on bb technologies : there is a need for understanding of bb technologies for adoption of common standards and platforms for promotion of financial inclusion on a massive scale. therefore, a study on bb technologies would be conducted for understanding existing technologies along with development of some common standards. these will also be helpful in getting one step nearer to the interoperability of the technological solutions and agent networks. v. likewise demand side field research into the experience of current users and nonusers of branchless banking will be conducted. the survey would help in identification and understanding the top financing needs of the low income clients and help bb providers tailor their products to satisfy the unmet demand for such services. similarly the survey will also

dfid. as a precursor to this program, sbp has already formulated a microfinance strategy which aims to enhance the outreach of microfinance industry to 3 million by 2001 though efforts are underway to fast track this and to reach 10 million in next few years. in conjunction with this, sbp is working with the industry to enhance outreach by proper exploitation of the avenues available for promoting state of the microcredit summit campaign report 2007. credit for small and medium enterprises and agriculture and rural finance. while financial penetration ratio is quite low in pakistan, the growth in outreach has improved : for instance : ( i ) number of microfinance beneficiaries have tripled to 1. 5 million over the last two years, ( ii ) number of agriculture borrowers increased to 2 million by the end of this fiscal year, with agriculture credit rising from just over rs50 billion in fy03 to almost rs200 billion in fy07 ; and ( iii ) number of small and medium enterprise borrowers rose from 91, 663 in dec 2003 to nearly 190, 000 in dec 2007. 18. through this forum, i would like to invite other stakeholders including standard chartered bank ( scb ) to join us and dfid – together to further augment the financial inclusion program. pakistan has laid sound financial sector legal, policy, regulatory and supervisory framework and has now an elaborate banking and microfinance industry infrastructure which, if effectively, nurtured and exploited can pave way for better results in extending outreach.