. in this connection, i would like to refer to a paper submitted by the world bank on the “ integrity in mobile financial services ” which identified four risk factors viz. anonymity, elusiveness, rapidity and poor oversight. anonymity is the risk of not knowing a customer ’ s actual identity. elusiveness is the ability to disguise mobile transaction totals, origins and destinations. rapidity is the speed with which illicit transactions can occur. poor oversight identity refers to the level of regulation of service providers. any model of mobile financial services needs to address to these issues 3. 8 firstly, let me admit that despite a wide network of bank branches spread across the length and breadth of the country, banking has still not reached a large section of the population. they are deprived of basic banking services like a savings account or minimal credit facilities. banking penetration was not there because earlier technology was not available. but now, technology is available. reserve bank has taken measures to achieve increased financial inclusion though the “ banking correspondent bc ” model. the rbi also formulated a biometric access / smart card based scheme of electronic benefit transfer ( ebt ) by banks to facilitate routing of social security benefits, national rural employment guarantee act payments and other government payments could be routed. the scheme, which involves subsidizing the cost of issue of the biometric access / smart cards by banks, was initially implemented in andhra pradesh in 2008 and has been extended across the country till june 30, 2010. i would also like to mention here that as per the annual report of india post for the year 2008 – 09, there are over 1. 55 lakh post offices in india, of which 89 % are in the rural areas. and post offices offer money transfer services through their money order and instant money order schemes. one of the important concerns in any money transfer transaction is the bonafide of the underlying. this concern is not restricted to india but felt across the globe. 3. 9 the know your customer ( kyc ) guidelines / anti money laundering ( aml ) guidelines have been well established in banks and appropriate mechanism is in place for reporting high value transactions to the financial intelligence unit of the government of india. the msp led model would have concerns from the point of view of money laundering and the safety and security of the transactions. the customer identification processes followed in case of prepaid customers are lax as the msps consider this as low risk from their financial stand point. given the large number of such

by icil – a representative firm of dun and bradstreet. this scheme is anticipated to deliver over 5 years period about rs105 billion ( us $ 1. 74 billion ). since its launch this year, the scheme has delivered rs2 billion to about 22, 136 borrowers 4. recognizing pakistan ’ s context, and drawing from other country experiences, it has to be acknowledged upfront that financial exclusion can only be tackled effectively : ( i ) if it is well conceptualized, well grounded and well integrated in the overall financial sector policy framework ; ( ii ) if it is backed by absolute political commitment and cooperative stance of the federal, provincial and local government and relevant sector agencies to create a healthy and conducive environment for financial intermediation at the lower end of population where risks are of different nature ; ( iii ) if financial institution recognize their corporate social responsibility and work towards financial deepening and credit diversification that is key to financial inclusion as well as to managing banks ’ health and its systemic risks ; ( iv ) if there is focus on provision of holistic financial services, whereby savings mobilization is perceived critical and integral to establishing the client on a sound footing and clients have collateral free access to financing with adequate provision for risks mitigated through credit enhancement mechanism and insurance ; and ( v ) facilitating reliable and secure payment between different parties. major elements of financial inclusion strategy. drawing from considerations highlighted above, pakistan ’ s financial inclusion strategy is broad based and flexible that aims to encourage partnership and social cohesion and mobilization with the objective of empowering and nurturing clients and their businesses. it engulfs all segments of population by offering them holistic and multiple services and products. anchoring and weaving these objectives, goals and principles, the sbp and the pakistan microfinance network ( pmn ) have developed a far reaching microfinance strategy that is one of the principal driver ’ s of financial inclusion strategy 5. in april 2007, the government has approved this microfinance strategy and a time bound action plan has been prepared to launch its implementation. presently, the institutional framework of mf industry includes a set of ( i ) retail providers such as six mfbs ( licensed only recently by central bank ), ( ii ) the national and provincial rural support programs and charitable or specialized ngos, ( iii ) the wholesale apex institution, the principal being the ppaf which relies on donor and government financing support to refinance community organization whose number has reached 60