How mobile banking has helped Pakistan’s poor

Published: 11 January 2017 at 11:00

Benazir Income Support Programme headquarters in Islamabad

State welfare programme has improved the status of women while cutting corruption

Untitled PageResearch carried out in Pakistan indicates that mobile phone banking can help alleviate poverty, improve women’s rights through financial and social inclusion and reduce corruption in developing countries.

The study by Dr Atika Kemal of Anglia Ruskin University’s Lord Ashcroft International Business School, is the first to look at how mobile banking innovation can help with the disbursement of government-to-person payments in state welfare programmes.

Dr Kemal studied the Benazir Income Support Programme (BISP) in Pakistan, which was launched in 2008 and is one of the largest social protection programmes in Asia.  

BISP provides over 5.3 million low-income households with 4,500 Pakistani Rupees (approximately £34.50) every quarter. The payments are disbursed digitally to women only, as heads of the household.

Pakistan has a population of over 180 million, but only 23 million bank accounts, 11,600 bank branches and 6,232 ATMs across the country (compared to 70,000 ATMs in the UK). The shortage of banking infrastructure is particularly severe in rural areas.  Mobile banking has become popular for the poor by providing bank accounts to advance financial inclusion in underserved communities. 

The BISP payments were initially distributed to households in cash or money orders via a network of local parliamentarians and postmen. In 2010, mainly to improve transparency, visibility, security and efficiency in the delivery of social cash, a shift to digital technologies, including mobile banking, took place in selected districts. 

However, due to the high costs in funding mobile handsets to women, besides other security reasons, mobile banking was gradually phased out and eventually replaced by the Benazir Debit Card.

BISP is primarily funded by the Government of Pakistan, but also receives financial support from multilateral and bilateral donor agencies, including the World Bank and the Department for International Development (DfID) in the UK.

Dr Kemal, an Associate Lecturer at Anglia Ruskin University, said: 

“The transition from cash-based to digital payments was really due to pressure from international agencies which had invested in the programme.  While some political actors resisted the shift to mobile banking, it led to increased accountability and governance, and a reduction in administrative and transaction costs.  Financial inclusion was really only a secondary objective for BISP.

“However, from the perspective of women, mobile banking provided flexibility and convenience to cash the full amount of grants at various locations such as banking agents, ATMs and point-of-sale machines via a secure PIN known only to the beneficiary.  This eliminated the practice of politicians or postmen demanding bribes for delivering the cash payments at home.

“BISP is also responsible for women’s empowerment through social and political inclusion.  Women were issued with national identity cards that were mandatory to register with BISP and to eliminate identity theft when cashing payments. This not only boosted their social standing and authority in their households but also granted political freedoms through assisting their rights to exercise their vote in elections.

“However, my study also found that the majority of women were illiterate, so they encountered digital and financial hurdles. Also, other infrastructural constraints, such as weak mobile signals and power outages in their homes, affected mobile phone usage. Women were also dependent on more literate family members or friends for reading text messages to notify them of payments.”


According to the World Bank, 2.5 billion people around the world do not have access to formal financial services such as savings, credit, insurance and payment services.  Even BISP only provides a bank account with the facility to withdraw funds, blocking access to other banking services such as making payments, depositing savings and accessing micro-credit.

Dr Kemal added: 

“Many governments, NGOs and international agencies working in similar environments may learn lessons from this study and switch to digital payment channels to disburse a wider variety of government-to-person payments to promote financial inclusion in underserved communities.

Providing wider access to financial services to those that are currently marginalised improves socio-economic standing and wellbeing in impoverished households."