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Pakistan’s teeming millions are on the verge of a digital revolution

SAM SPECIAL 2020-07-25 065826

Mass poverty and pandemics are both facts of life which involve millions of people at the same time. The same can be said of relief measures – they have to cater to millions of people at the same time. 

In a country like Pakistan with over 200 million people, to find a solution to this problem would have been impossible in the past. Just a couple of years ago when the Benazir Income Support Program (BISP) was launched, outdated methods like parliamentarians naming people who should be included in the program were applied with unsavoury results. Over 800,000 “undeserving” beneficiaries had to be removed from the BISP database as their standard of living was found above the criteria set for ‘the poor’. 

Now, for the disbursement of support money, the BISP smart card has been initiated. The National Database and Registration Authority (NADRA) played a crucial role in identifying the rightful persons under the BISP programs by applying various biometric checks.

Grants were given to the families through phone to phone banking. Beneficiaries were issued a SIM and cell phone at a NADRA counter to receive SMSes on the cash grant. After presenting the SMS and valid National Identity Card (NIC) copy, the beneficiaries receive a cash grant through a Point of Sale (PoS) franchise. The system has onboard a total of over 27 million households. Over 4 million BISP debit cards have been biometrically issued to the beneficiaries. The BISP Smart Card, Mobile, Debit Card and Money Order are the mediums utilized.

The Pakistan Tehreek-e-Insaf (PTI) government has put the fight against poverty on top of its agenda. Last year it launched the Ehsaas program for poverty elevation. But identifying genuine beneficiaries is still a challenge as the last population census-2017 results are not yet officially approved, while, the labour force survey 2018-19 of Pakistan Bureau of Statistics (PBS) has not yet been made public.

When the population census, labour force survey and NADRA’s data are synchronised and available, it would be easier to identify eligible persons. It is expected that the coverage of the BISP program will be further expanded when the ongoing survey of the scorecard is completed. The upgraded data can be used for other programs as well, for instance for the ration program that was initiated in the wake of the current corona pandemic.

The National Socio-Economic Registry (NSER) is underway to collect household data on the socio-economic conditions at the grassroots level for future program targeting – an ongoing process that keeps updating information. Other technologies are employed as well.

Lift-SAM Special-English-25 July 2020 copyWhen the corona virus hit the country, and it combined with the lockdowns, the “Ehsaas Emergency Cash” program was created. It identifies the beneficiaries based on an SMS campaign. It has been designed in the context of the economic hardship being experienced by the vulnerable due to the coronavirus crisis. The financial assistance under the program is meant to help them buy rations so that they don’t go hungry. The program covers 12 million families. With Rs. 12,000 per family, the total budget is Rs. 144 billion.

And again, the question about how to disburse the money and, in addition, control its use, are confronting the State. Control is necessary because otherwise, some would be spending the ration money for other purposes which undermines the task of feeding the poor.

In order to make the program more convenient for people, more access points for working the program would be necessary. In the currently used disbursement model, in which cash is distributed from a limited number of locations, over-crowding occurs violating social distancing norms. Given the technological solutions that are already available, one could think of more creative solutions for handling this unprecedented situation and convert this challenge into an opportunity.

One such option would be to utilize the Asaan Mobile Account (AMA) whereby the amount is disbursed through the mobile account of the beneficiaries, which they can use to purchase rations from utility stores and/or registered groceries agents such as Imtiaz, Chase up etc. The scheme has been developed by the State Bank of Pakistan (SBP) in conjunction with the Pakistan Telecommunication Authority (PTA).  

SBP and PTA have separately issued licences to service provider companies which are integrated electronically with 12 banks and four mobile operators on a “many to many” basis unlike the present switch which is “one-to-one”. A pilot program has already been successfully tested in the last 6 months. It is ready to be launched. 

Such an AMA account can be opened easily by dialling the USSD code *2262# from mobiles (feature and non-feature phones) or by using the registration data from the “Ehsaas Program”. Once the amount is credited in the account, the person can go to the nearest utility store or registered grocery agent, buy groceries either for the full Rs. 12,000 or for the minimum amount set by the government (e.g Rs. 6,000) and pay the amount using the same USSD code. The balance can be cashed at the same place.

All banks (and their agents) and Telcos (and their agents) can be approached for encashment to avoid overcrowding and delays. Using utility stores and possibly even other grocery chains like Imtiaz, Chase up etc. as Points of Sale (POS) will not only increase the number of cash disbursement points and avoid crowding but also serve the purpose laid out by the government to help vulnerable families spend the major portion of the amount credited for the purpose it is meant for – namely buying foodstuff. Further, this will help extend the reach of financial services in Pakistan to the unbanked population. 

While only 20% of the Pakistani population (ca. 46.8 million) have bank accounts, according to the latest statistical data by PTA’s telecom indicators, the number of mobile phone users in Pakistan has reached 161.183 million, as of May 2019. Moreover, the provision of 4G/LTE services in remote areas of Pakistan has also made a significant increase in overall 3G/4G subscribers. The number of 3G and 4G users in Pakistan reached 68.07 million in May 2019. With an increase of 0.173 million users in just a month, it is evident that 4G users in Pakistan are increasing rapidly and will soon take over the 3G market after the launch of 5G services. The future has already started. Let’s open our doors to a “Digital Revolution” 


(The writer is a defence and security analyst)