In an effort to promote Digital Financial Services (DFS) in Pakistan, National Institutional Facilitation Technologies NIFT, an existing Payment System Operator/Provider (PSO/PSP) offering nation-wide cheque clearing services, has signed an agreement with Bank Alfalah, one of Pakistan’s leading and progressive banks, to facilitate settlement services for mobile/electronic commerce payments (Digital Commerce Payments) through NIFT’s DFS platform under the brand name “NIFT ePay” using bank accounts. Through this partnership, NIFT ePay and Bank Alfalah will enable for the first time in Pakistan, the use of bank accounts & wallets to execute secure and interoperable digital commerce payments. Banking customers maintaining their account with any member bank of NIFT E-payment scheme will be able to use this facility. Must Read: Telenor Pakistan condemns sacrilegious incident and highlights commitment to the country Bank Alfalah, being one of the leading merchant acquiring banks in Pakistan and a trusted name in payments will act as the settlement bank among NIFT ePay member banks in Pakistan. The settlement bank will also support NIFT for handling disputes/claims e.g. duplicate processing for a seamless customer experience across the industry. The agreement was signed by Mr. Haider Wahab, CEO, NIFT and Ms. Mehreen Ahmed, Group Head – Retail Banking, Bank Alfalah in the presence of teams from both entities. Speaking on the occasion, Mr. Haider Wahab– CEO NIFT said, “Growth of Digital Payments is certain, given the focus and initiatives taken by State Bank of Pakistan and the Government on driving digitization and financial inclusion in Pakistan. The recently launched National Payment Systems Strategy (NPSS) and the MPG initiative by SBP lays out a clear and solid framework for a digital payments network in the country, NIFT looks to embracing these initiatives and the tremendous opportunities this will bring about. NIFT has been providing consistent services to the financial industry over the past two decades and its time that we play our role in creating a reliable, secure, and interoperable payments systems which enables different digital payments use cases in Pakistan. We are very excited venturing into these new partnerships with the industry to offer new range of Digital Financial Services providing same level of confidence that is expected from NIFT by the industry. We are pleased to sign up Bank Alfalah as NIFT ePay settlement bank having strong and common understanding of managing digital payment operations. The bank has over the years demonstrated progressive innovation around digital services which forms the common bridge between the two organizations.” Ms. Mehreen Ahmed remarked, “Bank Alfalah is proud to be an enabler for an innovative & first of its kind solution being launched by NIFT. We are a dominant player in the payments and digital space, and will continue to play our role in spearheading and facilitating payments in the country. Through this partnership, while we will be at the core of enabling the payments industry for a new service, I am also excited that this will open up a new transaction set for the bank’s account & wallet holders.”
Karandaaz launches first-of-its-kind Study on Warehouse Receipt Financing
Karandaaz Pakistan,a Section 42 company working to promote access to finance for small businesses and financial inclusion in the country has launched a study on Warehouse Receipt (WHR)financing in Pakistan. WHR financing is a form of institutional credit that is extended by banks to farmers and traders against physical commodities stored in licensed warehouses. The study assesses the current status of uptake of WHR financing in Pakistan through in-depth interviews with current and potential users, suppliers and regulators of the scheme including the State Bank of Pakistan (SBP), provincial food departments in Sindh and Punjab, Securities and Exchange Commission of Pakistan (SECP), National Bank of Pakistan (NBP), Habib Bank Ltd. (HBL) and Zarai Taraqiati Bank Ltd. (ZTBL). In addition, the study provides important insights on how WHR financing, through a well-developed ecosystem and strong institutional linkages between borrowers, banks, warehouses, and service providers, reduces post-harvest losses of agricultural commodities and enables growers to command better prices for their produce by avoiding distress sales immediately after harvest. A comprehensive analysis of the price trend of major agricultural commodities over the last five years reveals that WHR financing could be a viable source of credit for wheat, rice, cotton and maize farmers in Pakistan. These commodities are storable and their post-harvest price trends over the last four to five years justify delayed marketing.It is worth noting that the majority of farmers in Pakistan have small landholdings – over 72 percent hold less than 8 acres of land. Once the system is strongly established, small farmers will also be able to benefit from WHR financing. Sharing his thoughts, CEO Karandaaz Pakistan, Mr. Ali Sarfraz said,“WHR financing ecosystem is still a new concept. Pakistan has no licensed warehouse currently and there are no proper procedures in place for licensing and operating warehouses. In absence of proper information and data about the existing warehouses, the uptake of WHR financing will not be possible.Recent regulations by the SECP will enable the formation of collateral management companies and this will in turn have positive impact on this this mode of financing.” In terms of recommendations, key areas that need further development for the implementation of a successful and effective system of WHR financing are establishment of collateral management companies that will license and ensure quality control of warehouses; establishment of a warehouse and storage network for agricultural produce; creation of a database on storage facilities; development of a commodity exchange market; and raising awareness of farmers. The complete study can be accessed on theKarandaaz websi Karandaaz Pakistan is a not-for-profit development finance company established in 2014 and registered with the SECP. The organization promotes access to finance for small businesses through commercially directed investments, and financial inclusion for individuals by employing technology-enabled digital solutions. Karandaaz Pakistan has financial and institutional support from leading international development finance institutions; principally the United Kingdom Department for International Development (DFID) and the Bill & Melinda Gates Foundation.
