Nearly the entire population of Pakistan—89 percent—is unbanked or underbanked. This number was exacerbated during and after the devastating floods in the summer of 2010. In response, UBL partnered with the Pakistani government and international donors to deliver 2.3 million emergency cash transfers in the form of prepaid debit cards to over 1.6 million affected households. But many people were unaccustomed to banking and faced difficulties accessing the funds. Some had never used ATM machines and were forced to pay up to 20 percent of their aid money to opportunistic officials. With no existing financial knowledge base, aid could only go so far.
UBL engaged Reboot to help tailor the delivery of financial services to marginalized populations. In exploring the challenges with the flood relief program, however, we found that many difficulties stemmed from beneficiaries’ history of financial exclusion and the lack of experience among Pakistan’s banks in serving rural customers. The flood program represented the first accessible and relevant application of formal banking for many of Pakistan’s poor. Improving the relief program required first adapting the bank’s offerings to this previously unbanked market segment.