- Pakistan’s microfinance sector needs strategic vision and effective governance to maximise its growth potential and societal impact
Interview with Mr Hamad Rasool Bhullar — an analystÂ
PAGE: Tell me something about yourself, please:
Hamad Rasool Bhullar: Basically, I am humble learner in business and financial analysis. I have been working for both the private and public sectors over the last about 33 years in multiple roles with almost 28 years in professional training and teaching in multiple areas of finance, accounting, audit & compliance with corporate legal issues. With respect to my work with the financial sector, I have been involved in research and training for almost 28 years so far, and conducted over 350 training on different aspects of finance, business ethics, audit and corporate governance from basic concepts to professional applications in projects finance, Shariah-compliant risk management, investment management and financial analysis etc. in addition to the freelance consultancy and financial advisory in these fields. I remained a non-executive member on the Board of an Investment Bank for almost four years.
My qualifications and experience over the last 33 years, have mainly been in accountancy, corporate law, IT, economics, corporate finance and Islamic finance, Takaful, business turnarounds, projects finance, audit & ethics with training and business advisory in multiple areas of corporate sector as well as public sector within and outside Pakistan. I have a privilege to have issued the first Sukuk in Pakistan’s Investment Canvas with some other first such initiatives.
PAGE: What is your perspective about micro-finance in Pakistan?
Hamad Rasool Bhullar: Microfinance is the basic necessity in a society like ours in Pakistan where the number of people connected with banking sector is quite low. I consider the people connected with banks who have some banking relation other than deposit of their savings as well. In this way, the role of technology has got huge importance. Considering the needs of the people and general fear of the common citizens from the banking sector it is generally advisable for the micro-finance institutions to use unusual styles and techniques to create awareness and utility of this sector within the masses. There is a huge potential for growth in this sector as a very large proportion of the population lives below the poverty-line and there is a serious vulnerability in income streams mostly due to lower levels of education and learning. As a matter of fact, the Grameen model and Islamic financing model in micro-finance is easily workable and time tested, with the Qarz-e-hassana Model of Akhuwat which has got success in recent years is also quite helpful. We need to have patience and social connectivity within the masses for quality growth in micro-finance sector.
The matter of fact is that most of the microfinance institutions are not governed by the people which have proper technical know-how, vision or even the motivated drive to feel successful in this field, as they consider it too costly and laborious in operation. While some of the institutions establish the microfinance institutions with the expectations of getting some grants either from the Government, State Bank or even from the UN. The right vision with the right task in the management of a microfinance institution is quite important as the experience has shown that in most of the cases the staff of these institutions do not consider it as a career job
PAGE: How would you comment on the use of information technology in banking sector?
Hamad Rasool Bhullar: As I earlier expressed that the role of technology is vital for the growth of micro-finance both in operations, field connectivity and also for cost saving and quick responses to difficult situations or any disaster situation. Technology can make the time used to make a transaction reduced thereby reducing the cost, while the use of technology also cheaper due to the use of different types of Mobile Applications which has made the work effortless, which can be a driving force behind this potential revolution. The use of Informational Technology can eliminate lots of problems within the system by making it much more efficient by saving time, resources and society.
PAGE:Â KSE 100 Index has made history by crossing the level of 82000 points. What is your take on it?
Hamad Rasool Bhullar: The Stock Exchange in Pakistan is not driven by the genuine fundamentals as we generally consider, so having this in mind we can expect a large number of factors which lead our stock markets. Here the actual business model requires some changes. Even in USA and Europe, after the historical case of ENRON, strict regulations have been adopted which have slowed down their economies. In Pakistan we need to have a stable taxation policy, a spikes free monetary policy with political stability with consistently stable law and order situation, only then, we can make productive and learning oriented discussion on this subject. We apply one model in a system and potentially we face an innovative problem in the system. We also have to have stable exports and imports policy. So please excuse me for this point as we as a society have to address the above points collectively to make our Stock markets really reflecting the true picture of the economy.
PAGE: What is your standpoint about the transformation of human capital in Pakistan?
Hamad Rasool Bhullar: The human capital is on growth quite rapidly which is alarming as it is not catching up the quality pace of the surrounding countries. We as a nation need to work seriously and selflessly on development of our human capital on some better lines of action and make it more and more compatible with the needs of new technology. In this way, we have to work in micro-finance by investing in technology and human development otherwise we will be left lagging behind the rest of the world. Our social medial and mainstream media has to play their respective roles. We have to establish a separate department for this purpose, the prime responsibility of which is to work on this issue. We will discuss the potential style and structure of this suggestion in some other session.