Registering an increase of 43% on a year-on-year basis, the number of micro-savers in Pakistan reached 8.5 million at the end of 2014.
According to a report by the Pakistan Microfinance Network (MFN), active savers witnessed the largest increase among all outreach indicators in 2014. The value of savings increased 25% on an annual basis to Rs43.5 billion at the end of 2014.
“This increase primarily came on the back of microfinance banks (MFBs), which have been successful in mobilising deposits over the year as part of their deposits-led strategy to fund their portfolio,” the PMN said in its report.
In the last quarter of 2014 alone, the number of savers and the value of their savings increased 9% and 14%, respectively, on a quarter-on-quarter basis. By adding 517,276 new depositors, Tameer Microfinance Bank (TMFB) remained the highest contributor in terms of active depositors. The largest jump in the value of deposits in October-December came from National Rural Support Programme Bank (NRSP) with an increase of Rs1.6 billion.
According to the PMN, the ongoing focus on deposit products by MFBs, coupled with competitive deposit rates, has enabled them to effectively tap into the deposit market. The share of MFBs in terms of active savers grew from 59% in the preceding quarter to 62% in the October-December quarter.
Micro-credit outreach witnessed modest growth in the fourth quarter of 2014, as active borrowers grew by a meagre 1% while the gross loan portfolio (GLP) witnessed a rise of 3%. However, the PMN said the microfinance sector continued to witness a positive trend in the average loan size, which grew 10% to cross the Rs30,000 threshold for the first time.
As for micro-insurance, the sector exhibited a positive trend in the October-December quarter. The number of micro-insurance policyholders increased by 7% while the sum insured surged by 20%.
The growth in micro-insurance outreach was generated mainly by TMFB, which initiated the provision of credit life insurance coverage to all its clients during the quarter. It added 111,000 new policyholders and sum insured of worth Rs7 billion.
The penetration rate of the microfinance sector showed negligible growth in the fourth quarter, as it increased 0.1% only to close at 11.5%. The total number of branches of microfinance banks went up by 78 due to an increase in outlets by NRSP and Akhuwat mainly in Punjab.