Pakistan Floods —Branchless Banking Responds

Every reader of this blog will have seen the heart-breaking pictures of the impact of the flood in Pakistan. Many of us will have also made donations to relief agencies that are doing what they can to help those that have been worst affected – probably by using our credit or debit card on line. In Pakistan, branchless banking providers are facilitating both the mobilization of donations and the disbursements of cash to those that need it most.

CGAP’s partner in Pakistan, Tameer Microfinance Bank, and their parent company, Telenor Pakistan, have made it possible for people in Pakistan who may not have internet access to make donations to relief organizations using their EasyPaisa mobile banking platform and have removed the usual transfer fees. EasyPaisa account holders can make donations direct from their mobile wallets and anyone can walk into one of 6,000 agents to contribute to the work of organizations including the Pakistan Red Crescent Society and SOS Children’s villages. They are also in discussion with a number of NGOs about using EasyPaisa to help them to distribute payments to people who have lost their homes or their livelihoods and Telenor themselves have pledged over Rs 213 million (USD 2.5 million) to flood relief efforts.

UBL Bank has won a contract from the Government of Pakistan to make electronic payments of Rs 100,000 (USD 1,170) each to 2 million households – the vast majority of whom will never have set foot in a bank. UBL plan to use their Omni Branchless Banking platform to deliver payments to recipients via Visa debit cards. They will open accounts and distribute cards so that recipients can spend their money at stores or withdraw their cash at ATMs or agents that have been specially set up to deal with the post-flood situation. In post-disaster situations, being able to access cash becomes a life or death issue and from the provider perspective it’s also a major challenge. UBL has 1,800 agents at present and they plan to set up 3,000-4,000 more over the next 3-4 months to cope with the increased demand, according to Abrar Mir, Executive Vice-President of Branchless Banking, who hopes that the people that they reach will continue to use their accounts long after the floods have subsided.

Other organizations are using mobile phones in innovative ways that are not related to branchless banking. Ushahidi, an open source project that allows users to crowdsource crisis information via mobile, have set up pakreport.org a mapping service that allows anyone in the country to text information about the flood. Information is collated and made available to the emergency services and disaster response organizations and NGOs via a web-based interface.

The presence of two branchless banking services in Pakistan (EasyPaisa and UBL Omni) may play an important part in the response to the flood in Pakistan. In Haiti, where no branchless banking solutions exist, the Bill & Melinda Gates Foundation and USAID set up a prize for the first organization to launch a branchless banking solution earlier this year that could be used to make payments to those affected by the earthquake. Although there are some encouraging signs, the prize has yet to be claimed. The response in Pakistan has been much faster due to the presence of existing systems.

Disasters are a fact of life in many countries, and disproportionately affect the poor. Branchless banking will never be able to prevent disasters, but it has the potential to dramatically improve the way in which we can respond to them.

- Chris Bold