Financial Inclusion For the Next Billion Users | Nadeem Hussain | Talks at Google

TL;DR

Nadeem Hussain, a leading social impact entrepreneur and financial inclusion pioneer, shares his journey of starting a microfinance bank in Pakistan and his vision for technology-driven financial services.

Transcript

SPEAKER 1: Thank you, everyone, for this special edition of talks at Google as a fireside chat with Mr. Nadeem Hussain. Mr. Nadeem Hussain is one of Asia's leading social impact entrepreneurs, tech investors, and financial inclusion pioneers. He is the founder of Telenor Microfinance Bank, formally, Tameer Microfinance-- recognized by the World Ban... Read More

Key Insights

• 👨‍💼 Nadeem Hussain believes that microfinance banks can have a significant social impact by providing financial inclusion and formal credit to underserved individuals and small businesses.
• 🖐️ Technology, particularly smartphones, can play a transformative role in improving access to financial services and changing consumer behavior in emerging markets like Pakistan.
• 🖐️ Incubators and accelerators are playing a crucial role in supporting startups in Pakistan, but there is a need for more seed funding and access to capital for graduated startups.
• 🪡 The regulatory environment in Pakistan is slowly evolving to support entrepreneurship and innovation, but more changes are needed to enable startups to thrive.

Questions & Answers

Q: Why did Nadeem Hussain choose to start a microfinance bank in Pakistan?

Nadeem wanted to make a social impact in his home country and recognized the lack of access to formal credit. He also saw an opportunity in the lower capital requirement for microfinance banks compared to commercial banks.

Q: What are the challenges faced by microfinance banks in Pakistan?

One challenge is the high default rate due to potential over-indebtedness. Another challenge is the high cost of administration and underwriting, which leads to higher interest rates. However, if microfinance banks invest in technology, they can reduce these costs and offer lower rates.

Q: How did Tameer Bank create a successful mobile payment system?

Tameer Bank focused on changing the behavior of customers by making utility bill payments more convenient. They established a network of agents who could accept bill payments, which helped build customer confidence. They also pivoted to domestic remittances, which was a huge success.

Q: What is Nadeem Hussain's view on the current technology and entrepreneurial scene in Pakistan?

Nadeem believes that Pakistan has a lot of potential, with a large youth cohort and increasing smartphone penetration. However, there is a need for more seed capital and supportive regulations for startups to thrive.

Summary & Key Takeaways

• Nadeem Hussain spent 27 years at Citigroup before returning to Pakistan to start a microfinance bank called Tameer Bank.

• He recognized the need for financial inclusion in Pakistan and saw microfinance as a way to provide capital and formal credit to underserved individuals and small businesses.

• Nadeem faced challenges in starting a new venture at the age of 49 and in implementing mobile payment systems, but he overcame them with a focus on behavioral change and technology.