Does Branchless Banking Reach Poor People? The Evidence from Pakistan

In this mini-series we explore new evidence from three countries on whether branchless banking is reaching poor people starting today with Pakistan.

Proponents of branchless banking, including CGAP, have for some time made the case that branchless banking has the potential to transform the lives of poor customers and in some instances is doing so already. With many more access points across the country and without the cost of expensive branch infrastructure, branchless banking – the theory goes – should be able to reach many more people and at a much cheaper cost. Financial services will be accessible and affordable to many poor people for the first time. But it is quite possible that in the first instance at least it will be richer customers and those who already have bank accounts that will make use of services that are cheaper and more convenient.

Until recently there has been very little data on the income levels of the users of branchless banking. CGAP commissioned Coffey International Development to carry out studies of customers of several branchless banking services. The first study to take place was with EasyPaisa customers in Pakistan. With over 10,000 agents across the country, EasyPaisa already has more access points than the entire banking sector of Pakistan combined, and allows customers to send and receive money to friends and family, to pay their bills and, more recently, to open an account on their Telenor phone. We wanted to find out whether poor customers and those that were previously unbanked were using the service.

327 interviews were carried out with EasyPaisa customers at 10 locations across both rural/semi-urban and urban Pakistan between January and February 2011. Customers answered questions about both their use of EasyPaisa, but also about their homes and their household that allowed us to work out their approximate income level by comparing their answers to a nationally representative household survey.

What did we find?

  • When we looked at income levels we found that around two-fifths (41%) of EasyPaisa users live on less than $2.50 per day (in 2005 PPP adjusted dollars). The majority of customers (69%) live on less than $3.75 per day, but few customers (5%) were living below $1.25 per day. ◦When we looked at customers’ use of other banking services we found that just under half (45%) of all respondents did not have a bank account, with informal money lenders being the next highest provider of financial services (far above microcredit).
  • There was also a strong correlation between the likelihood of being poor and the likelihood of not having had a bank account among users.

Customers from all walks of life seemed to value the service and felt that it was making their lives easier.

  • When asked to rate the service, over 90% of respondents rated EasyPaisa as highly effective. Less than 10% rated it as moderately effective and almost no one rated the service as ineffective.
  • Three-quarters of the respondents (76%) felt the service has a positive impact on their lives and a high majority of users (88%) thought the service was easy to use.
  • There are a high number of repeat users: just under two-thirds (65%) of all respondents using the service to send money do so at least once a month.

These results are encouraging and seem to support the findings that are emerging from other studies that suggest that branchless banking services do reach poor people. A recent study by InterMedia in Tanzania found that nearly one-third of users of M-Pesa in Tanzania are poor (measured against a $2 per day poverty line).

Over the next few weeks CGAP will release the results of similar studies in India and Mali. We hope that they too will show that other branchless banking services are also reaching the types of customers that we have long hoped that they will.


- Chris Bold


27 August 2012 Submitted by Anonymous (not verified)

Though its a marvellous service but for only those who know how it works. Still the majority of the people doesn’t know its use more than just sending and receiving money. If we talk about BANKING, its a complex thing, far more than just money transactions or paying the utility bills. We talk about the millions of mobile phone subscribers. But here the case is different. Handling a mobile account is still not so easy as handling a phone call. Educating a customer about the product is as important as other things could be. And for this we’ve to be right at the levels of these poor + “illiterate” people. Arranging social gatherings in the areas belonging to this class should be the most productive and useful. Thank you.

27 August 2012 Submitted by Anonymous (not verified)

My question is similar to adnan masood. Mobile accounts can only be set-up through the 200+ Telenor Franchisees and official Service & Sale Centres. The 10,000 agents cannot provide account set-up. These interviewees were probably only rating the money transfer service. What would be interesting are the figures for those who actually opened an account. Word has it that only 4-6% of those who have even open accounts are actually using them.

27 August 2012 Submitted by Anonymous (not verified)

Adnan and Sahzib,

We put your questions to EasyPaisa and asked them for a response. A spokesman gave us the following update:

“In the 20 months since launch, easypaisa has built a significant volume on the merchant assisted channel (OTC services) through the 12,000+ easypaisa shops located all over Pakistan. Every month, millions of people use these shops to pay their bills and to send/receive money. In July 2011, the easypaisa Mobile Account (m-wallet) was re-launched through an extensive marketing campaign (ATL and BTL). There are over 1,300 easypaisa shops where customers can sign up for the mobile account. The registration uptake is encouraging for the mobile account. The main challenge for easypaisa and other mobile money deployments will be to educate customers and train the merchant network to maintain active customers after the initial trial transaction.”

27 August 2012 Submitted by Anonymous (not verified)

Dear Chirs,

I am a EasyPaisa Mobile Account users and use it extensively for Money Transfer, Bill Payments (Electricity, Gas, Phone, Mobile, Internet) and use it from the COMFORT OF MY TV LOUNGE. Though I am a conventional banking customer, my major reason for using the service is the huge convenience it provides. Even when one of my workers is out of town and is need of money, I can remit instantly, without getting up from my seat.

Though this product is designed for the Unbanked and Poor, but it also has a great convenience factor who are already banked.

Whats Missing:
Easypaisa should have merchant accounts, what I mean is that I should be able to use easypaisa for any service at any location, may it be a restaurant, a clothes shop, gas station or a convenience store.

In addition Easypaisa should work Online merchants to integrate their solution for Online Shopping experience; as Pakistan lacks a e-commerce infrastructure, Easypaisa should take a lead in this domain.

Once these 2 domains are included, then the M-Wallets penetration shall go out of the roof.


Sam Vaid

27 August 2012 Submitted by Anonymous (not verified)

I am perplexed by the fact that inspite of huge expenditure incurred by the respective promoters on promotion of the Easypaisa and Omni brands, very few Mobile Wallet accounts have been registered ( compared to the number of Unbanked customers) . Is that because very little money actually resides in the Wallets, or that the people conductuing their transactions through the Agents’ locations feel no need to have a wallet of their own ? What would also be interesting to know is, how many of the Wallet holders actually conduct P2P transactions amongst themselves ? And what is the amount of the P2P transactions that have been conducted during the last 1 year ?

27 August 2012 Submitted by Anonymous (not verified)

Dear All

It is my understanding that a number of banks including UBL-Omni and Easypaisa are participating in the disbursements of Benazir Income Support Program & CDCP. These payments are made on a regularly on a periodic basis to the identified beneficiaries which in turn could also be the potential customer base given the assumption that majority of the customers are part of the un-banked population. I would appreciate if somebody could provide some insights and data with respect to the conversion of these beneficiaries into branchless banking customers/banked customers.

Also have the service providers seen an increase in financial literacy and inclusion of these beneficiaries given the substantial marketing and infrastructure which has been put in place by the various financial institutions and telcos.

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