Latest news with #MurtazaAli
Forbes
3 days ago
- Business
- Forbes
How Fintech Is Bridging The Credit Gap For The World's Unbanked
Murtaza Ali is President of JazzCash. getty Zara, a skilled seamstress in Lahore, often called the heart of Pakistan, creates intricate wedding garments that are in high demand throughout her community. Though she has reliably paid her utility bills for 15 years and maintains a positive balance in her mobile wallet, not a single bank would approve her loan application to expand her growing business. Her predicament mirrors that of millions across Pakistan who remain invisible to the traditional banking sector. This issue represents a pressing economic challenge in Pakistan, as well as other parts of the world: having a vast population with demonstrable financial discipline, yet for many, no pathway to formal credit. According to recent statistics, 60% of Pakistan's adult population is integrated into the financial system, with less than 2 million having access to formal credit. Traditional banks require financial documents including salary slips, tax documents and collateral, which excludes millions in the informal sector from formal lending opportunities. As a result, these individuals have no choice but to rely on informal lenders, who are often not transparent with their terms and can exacerbate financial insecurity. The consequences extend beyond individual hardship, creating systemic barriers that stifle entrepreneurship, limit business growth and constrain economic mobility across all sectors. On the other hand, fintech credit scoring models help expand financial inclusion, as they enable risk assessment beyond conventional metrics such as collateral or salary slips. Fintechs can use alternative digital data, such as wallet transactions and payment patterns, to assess creditworthiness for people outside the formal banking system. This is a game changer for Pakistan's unbanked population, who can access real-time credit with their pre-whitelisted limits—preapproved borrowing amounts determined using alternative data such as mobile usage or digital transaction history. The impact of this approach is already proving transformative in Pakistan. Through fintech-based credit from digital lenders such as our company, JazzCash, small and medium-sized businesses, which account for 40% of Pakistan's GDP and employ roughly 80% of the workforce, are now able to more easily expand their operations, purchase inventory and improve cash flow. These data-driven innovations are beginning to reshape Pakistan's financial landscape providing crucial credit to small businesses and individuals often overlooked by traditional banks, complementing the State Bank of Pakistan's wider push to expand financial inclusion. Fintech innovations are also transforming access to credit in other emerging markets beyond Pakistan. In the Philippines, digital disruptors such as Tonik and Salmon are similarly stepping in to solve the challenges of lending to consumers without formal credit histories. Salmon, for example, uses AI-driven credit evaluation methods and alternative data in its lending process. It has also integrated facial recognition technology into its KYC processes. Other emerging markets are also feeling the benefits of innovative, tech-enabled credit scoring tools. In Kenya, M-Shwari, a mobile-based credit solution that uses transaction history and behavioral data to determine loan eligibility, has so far disbursed over $6 billion in loans and attracted 32 million users. In Latin America, meanwhile, inDrive Money, a financial services vertical of global ride-hailing platform inDrive, is also leveraging alternative data to facilitate loan access to drivers and unlock lending for the underbanked in Mexico, Colombia, Indonesia and Peru. While the impact of these types of fintechs is already significant, their work is not without its own set of obstacles, and several ongoing challenges remain. In underbanked markets—particularly those plagued by high rates of online fraud—newer fintechs must work hard to win the trust of customers who might be skeptical about using digital services. This means they have to actively counteract this perception by heavily investing in locally targeted marketing and financial education initiatives. Additionally, since these consumer-lending fintechs need to leverage alternative data for credit scoring, they are heavily reliant on operating in markets with progressive, forward-thinking regulators. So, expanding access to credit in markets where the regulator doesn't explicitly allow the use of alternative data for credit scoring is a challenge. Lastly, fintechs rely on 'unstructured' alternative data, which is less concrete and therefore more challenging to use for accurately forecasting financial behavior. Therefore, they require access to far larger volumes of data to create accurate credit engines. While larger fintechs, including our company, have already found ways to meet this challenge, many smaller players are still actively working to overcome it. As the president of one of Pakistan's leading fintechs, I recognize that harnessing alternative data and digital technologies is an effective and accessible way of unlocking consumer lending and bringing millions of the unbanked into the formal economy. While making a difference to the economic empowerment of individuals like Zara, the seamstress from Lahore, it can also have an important multiplier effect for the economy and society at large. Providing financial services to unbanked individuals, women in particular, can fuel economic growth and job creation, as well as play a key role in improving health, education and food security. With nonbank financial intermediaries holding 49% of global financial assets, fintechs have the power to become the force for driving greater financial access on a global scale. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Business Recorder
25-04-2025
- Business
- Business Recorder
JazzCash plans to expand its regional footprint
KARACHI: JazzCash plans to expand its regional footprint, particularly in the Gulf, to facilitate cross-border payments to the Pakistani customers. As part of this initiative, JazzCash has partnered with du Pay-a UAE-based financial services provider, to enable seamless cross-border transactions through Western Union. This collaboration allows Pakistani nationals to send money directly to JazzCash mobile wallets in Pakistan, making remittances faster and more convenient. Murtaza Ali, President of JazzCash, addressing at Money 20/202 Asia, disclosed that JazzCash is set to expand its focus on Insurtech to help bridge Pakistan's protection gap, introduce asset fractionalization, allowing the masses to own a fraction of high-value assets, democratize stock investments and trading, and significantly grow its digital merchant base, with a strong emphasis on supporting women-led businesses and freelancers. He said that financial technology is not just reshaping economies, but it's transforming lives and empowering underserved communities across emerging markets. Around 3,000 senior decision-makers from banks, payment gateways, card networks, big tech, venture capital firms, lending institutions, blockchain, and bitcoin companies attended Money20/20, making it a key platform for advancing fintech discussions. Murtaza highlighted that a large segment of the adult population still hasn't opened their first bank account, and there is a huge scope for the financial inclusion. He urged stakeholders to design accessible solutions that address real needs on the ground. He emphasized that, with over 20 million monthly active users, JazzCash is driving a shift from a cash-based economy to a digital one, aligning with the State Bank of Pakistan's vision and the government's broader goal of digitizing the economy. Currently, JazzCash has the largest QR payments network in Pakistan, and is the country's largest digital loan issuer, having disbursed 108 million digital loans for productive purposes. He mentioned that in 2024, JazzCash processed transaction values equivalent to approximately 9 percent of Pakistan's GDP and accounts for nearly 50 percent of all IDs on RAAST, the country's national payment platform underscoring its critical role in Pakistan's financial ecosystem. Murtaza also commended the collaborative efforts of the State Bank of Pakistan, the Pakistan Telecommunication Autho-rity, and the Securities & Exchange Commission of Pakistan, recognizing their role in balancing innovation with consumer protection, thereby advancing digital and financial inclusion across the nation. In his concluding remarks, Murtaza discussed the expanding digital capabilities and services offered by VEON, the parent company of Jazz and Mobilink Microfinance Bank, aimed at accelerating digital and financial inclusion across its markets. Specifically, within its fintech vertical, VEON's digital operators JazzCash of Pakistan, Simply of Kazakhstan, and Beepul of Uzbekistan, collectively processed a gross transaction value equivalent to $ 36.5 billion over the past twelve months as of December 2024, contributing to the digitization of economies in Pakistan, Kazakhstan, and Uzbekistan, he mentioned. Copyright Business Recorder, 2025
Business Recorder
25-04-2025
- Business
- Business Recorder
Zakat disbursements across Punjab through JazzCash
LAHORE: Punjab Zakat & Ushr Department has joined hands with JazzCash, Pakistan's largest fintech platform, to facilitate the disbursement of Zakat funds through its extensive agent network. The partnership aims to increase efficiency, transparency, and ease of access for beneficiaries of Zakat across the province. Under this partnership, Zakat disbursements are scheduled to begin in May. Eligible recipients identified by the Zakat & Ushr Department will receive SMS notifications informing them of their entitlement. The CNIC-based cash disbursements will be conducted through JazzCash agents upon biometric verification. Rashid Iqbal Nasrullah, Advisor and Special Assistant to the Chief Minister of Punjab, said, 'Our goal has always been to serve the people of Punjab with integrity and compassion. This collaboration with JazzCash will make Zakat disbursements more efficient and accessible, especially for those in remote areas. We are delighted to have JazzCash on board as our digital partner and look forward to working together to uplift our most deserving citizens.' Murtaza Ali, President of JazzCash, said, 'This partnership marks a crucial step forward in ensuring that support reaches those who need it most with dignity, speed, and security. We commend the Government of Punjab for its continued efforts to make social welfare assistance more transparent and accessible.' The initiative will support some of society's most vulnerable segments, including individuals requiring guzara (livelihood) assistance, Persons With Disabilities (PWDs), and those seeking marriage support. Guzara allowance beneficiaries and PWDs are eligible for biannual funds, while marriage assistance beneficiaries are eligible for one-time funds. Copyright Business Recorder, 2025
Forbes
28-03-2025
- Business
- Forbes
Insurance For All: Pakistan's Digital Path To Financial Security
Murtaza Ali is President of JazzCash. getty As Pakistan stands at the crossroads of digital transformation, a critical gap in the current financial infrastructure becomes increasingly apparent: Our insurance penetration remains just 0.8% of the GDP. This means millions of Pakistani families are vulnerable to financial shocks from health emergencies, accidents or loss of life. This vulnerability is further underscored by recent increases in poverty. In its recent 'Poverty Projections for Pakistan' report, the World Bank noted a 25.3% poverty rate in 2024, up by 7 percentage points from 2023. The report states, 'Poor households face disproportionately higher welfare losses and get pushed deeper into poverty.' Two emerging markets offer compelling insights into insurance sector transformation. India, with its vision of 'Insurance for All' by 2047, has made significant strides in expanding insurance coverage. While still below the global average and having declined recently, India's life insurance penetration stands at 2.8%. Their insurance regulator, IRDAI, has been instrumental in this growth, implementing innovative strategies such as creating a digital platform for insurance that simplifies product selection. Simultaneously, Kenya provides another instructive model. Through mobile-based microinsurance platforms such as M-Tiba, the country has dramatically increased insurance access, particularly in rural areas. These digital solutions have enabled low-income Kenyans to access affordable health insurance through mobile technology. In this global context, we must ask ourselves: What is Pakistan's road map to universal insurance coverage, and how can we leverage our growing fintech ecosystem to achieve this ambitious goal? The challenges are significant but not insurmountable. In a country where traditional insurance has long been viewed with skepticism and perceived as a luxury rather than a necessity, we need a paradigm shift in how insurance products are designed and distributed. In 2023, our general insurance penetration was about 0.2%. Pakistan's insurance metamorphosis requires a fundamental redesign of products, distribution and consumer engagement. The traditional model comprising complex products, agent-driven sales and paper-heavy processes has proven inadequate for a population increasingly connected through 196 million mobile cellular subscriptions but historically underserved by formal financial services. Insurance products need to be simplified and unbundled to meet specific consumer needs rather than offering complex, all-inclusive packages that many find overwhelming and expensive. Microinsurance models with low premiums and focused coverage can serve as entry points for first-time insurance consumers, particularly those with limited financial resources. Digital-first distribution represents the second transformation pillar. By leveraging Pakistan's growing smartphone penetration, insurers can create mobile-first solutions that eliminate traditional barriers to access. The most promising approach may be embedded insurance, where protection becomes an organic extension of daily activities. Fintech startups, telecom providers, payment platforms and traditional insurers must form strategic partnerships that combine technological innovation with insurance expertise. For example, Singapore-based super-app Grab seamlessly integrates accident coverage into every ride, requiring no separate purchase decision from users. European neobank Revolut includes device protection, effectively bundling banking and insurance into one consumer relationship. In Pakistan, digital wallets are exploring similar models, integrating microinsurance into routine transactions such as bill payments and toll fees, quietly introducing many consumers to their first formal protection products without requiring behavioral change. Insurance doesn't have to be about an agent scaring you into buying a premium by listing all the bad things that could happen to you. Now, it can be as easy as a pop-up asking you if you would like to insure your journey after you pay your toll tax on the motorway. The path to universal insurance coverage in Pakistan requires addressing several critical challenges. First, we must prioritize financial literacy and insurance awareness. Many Pakistanis remain unaware of insurance benefits or harbor misconceptions about its compatibility with religious beliefs. In India's case, life insurance became a higher priority for Indian consumers during the Covid-19 pandemic. Risk awareness grew during that period, and customers became accustomed to purchasing things digitally. With mobile teledensity at 79.8%, as of February, and broadband coverage of around 59%, insurance providers must develop simple products and leverage digital channels to educate and acquire customers. Second, our regulatory framework must evolve to encourage innovation while protecting customers. Drawing inspiration from both India's regulatory sandbox approach and Kenya's mobile-first strategy, we can create an environment that encourages insurance innovation. The recent success of micro-insurance products, with premiums as low as Rs. 10 daily, proves that affordability and accessibility can coexist with commercial viability. Third, we must address our market's unique characteristics. Pakistan needs to leverage its growing digital payment infrastructure and provide both conventional insurance and takaful options. The availability of Shariah-compliant alternatives is crucial for widespread adoption in our market. Fintech startups and insurance companies must work together to provide accessible products tailored to meet customers' diverse needs, particularly in underserved rural areas. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
