Pakistan uses pre-paid cards to distribute aid to flood victims

The Pakistan government is working with Visa and United Bank Limited (UBL) to distribute aid to millions of families hit by the monsoon floods through pre-paid cards.

The Pakistan floods have affected around 20 million people, leaving four million homeless and six million in urgent need of food aid, according to the UN.

The country's identification agency Nadra is working with Visa and UBL to issue around two million government-funded pre-paid cards loaded with PKr20,000 ($230) each.

The switch from cash to electronic distribution of aid follows a similar project last year that saw 400,000 cards issued by the partners to internally displaced persons in the Northwest of the country.

Visa says it is also working with others in Pakistan to establish an acceptance infrastructure that allows recipients to make purchases of essential items for their families at local merchants or to withdraw cash.

Ali Arshad Hakeem, chairman, Nadra, says: "Our positive experience with the IDP Visa prepaid debit card last year increased confidence among the government and people of Pakistan that electronic payments are the future for aid disbursement, and an important first step towards financial inclusion."

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Comments: (3)

A Finextra member 10 September, 2010, 09:30

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This distribution of funds is a great way to securely get funds into the hands of those that need it. Although the acceptance infrastructure in Pakistan may not be the best it is a good move forward. Governments around Europe should be taking note, there is a reason this is being adopted around the world, it is a much more secure mechanism and a lot more traceable than disbursing cash.

Countries that have the acceptance network in place already are better placed to distribute using this method.

David Carr

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Amit Sharma - Emotion Associates - Nottingham 10 September, 2010, 16:15

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Agree with David Carr. I think its a nice gesture and makes a statement of sorts but how helpful it actually is on the ground due to the infrastructure is at best questionable.

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A Finextra member 12 September, 2010, 10:47

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I concur with Carr, however the infrastructure is steadily growing for the last 15 years and there is growing acceptability of cards across the board. Incentives by banks for both merchants and customers are lending a helping hand in this endeavor. As of right now we have more than 50,000 POS terminals spread across the major cities of Pakistan, additionally banks like Tameer Bank have introduced GPRS based POS machines to extend the reach to rural areas. Same is the case with ATMs and other alternate delivery channels, the growing acceptability by the masses is fueled by the awareness of the benefits of using these channels. We still have a long way to go but the progress is steady and healthy.