Feasibility Study for a Greenfield MSME Bank to support Financial Inclusion

2013-11-30 - 2014-02-28

ADB is considering an investment in a greenfield bank in Pakistan to provide credit and other financial services to MSMEs and farmers. Such a bank would offer a range of banking products for its customers and their employees, such as current accounts, deposit accounts, money transfers and international payment services. Given the large adult population (100 mil), but low penetration of financial services among low-income people and informal businesses (only 2.5 mil with access), ADB believes that if successful, a greenfield bank could also have a demonstrative effect on the banking sector in regards to the commercial viability of MSME finance.
Bertolt Hertzfeldt, acting as the Project Manager for LFS, was in charge of conducting research and writing the feasibility study. The project, with a term of 3.5 months, focused on exploring whether market conditions were conducive to setting up an MSME greenfield bank. The main methodological elements of the assignment were the following: Market research to identify demand for banking services in Pakistan’s Punjab and Sindh provinces, and possibly other provinces Identification of existing products and possible new products to support financial inclusion Identification of service delivery channels -- branch and/or branchless banking Identification of location of branches and strategy for roll out Identification of products offered and strategy for roll out Creation of funding strategy Identification of alternatives for the establishment of greenfield bank including requirements to be met by investors Preparation of financial projections and business and resource plan for a greenfield bank