Hobbes Lockes And Rousseaus Imagination Of Social Contract Philosophy Essay

Hobbes Lockes And Rousseaus Imagination Of Social Contract Philosophy Essay Social Contract Theory, is one of the oldest philosophical theories on the origin of state .The original inspiration for this notion is said to have derived from the bible, covenant between God and Abraham and later by the Sophists in Greece, but it is mostly brought up by the writings of Thomas Hobbes, John Locke, and Jean-Jacques Rousseau. The social contract is moral and/or political obligation dependent upon a contract or agreement between the people to form society. The social contract theory has three main stages of progression, namely- state of nature, contract or covenant and civil society. These three stages provide the basic differences between the theories of Thomas Hobbes, John Locke, and Jean-Jacques Rousseau. THOMAS HOBBES THEORY OF THE SOCIAL CONTRACT Thomas Hobbes (1588-1679) was an English philosopher and political thinker. The English civil war became the back drop for all his writings. In the context of a number of overlapping conflicts Hobbes wrote various versions of his political theory, begning with The elements of Law (1630s),De Cive(1642),and Leviathan (1651).  [1]   According to Hobbes, the state of nature represented the interactions of human beings with each other in the absence of any kind of relations of political authority. In other words the state of nature represented a state of war. Hobbes believed that the human beings in the state of nature were concerned only with their desires  [2]  . The human nature here was selfish. No person was superior over the other. Hobbes further said that the desire to acquire power never ended and thus it aggravated the state of war where everyone was trying to ensure that no one will stop them from fulfilling their desires of glory. Thus creating a situation favorable for long-term projects, like farming, industry, etc. became impossible. It was a situation of continuous fear and violence. In such condition there is no place for industry, because the fruit thereof is uncertain: and consequently no culture of the earth; no navigation, nor use of commodities that may be imported by sea; no commodious building; no instruments of moving and removing such things as require much force; no knowledge of the face of the earth; no account of time; no arts; no letters; no society; and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short. -Leviathan Such a state called for some laws to be enforced. Hence the need arose to have an authority that would enforce the laws of nature and help man to fulfill his desires in a more efficient way. This led to the signing of the Social Contract between men leading to the formation of a state as well as a sovereign. In such a state or commonwealth, as stated by Hobbes, men authorized a particular individual or a group of individuals to perform all actions. Moreover men also gave up certain rights on a condition that such rights were also given up by the entire multitude. A commonwealth is said to be instituted, when a multitude of men do Agree, and Covenant, every one, with every one, that to whatsoever Man, or Assembly of Men, shall be given by the major part, the Right to Present the Person of them all (that is to say, to be their Representative); every one, as well he that Voted for it, as he that Voted against it, shall Authorize all the Actions and Judgments , of that Man, or Assembly of Men, in the same manner, as if they were his own, to the end, to live peaceably amongst themselves, and be protected against other men. -Leviathan Hobbes sovereign had absolute authority. His judgments and actions could not be questioned as this sovereign was not a part of the social contract. Opposing this sovereign meant opposing oneself as this sovereign represented the people itself. The only right that men had against this sovereign was the right to life or self-preservation. JOHN LOCKES THEORY OF THE SOCIAL CONTRACT Initially, although John Locke (1632-1704) believed in the absolute power of the monarchy and religious uniformity, his stance changed drastically later. His changed stance is best put forward in the work Two Treatises of Government. Unlike, Hobbes for whom the state of nature is a state of war, Lockes state of the nature is the state of peace, Good Will, Mutual Assistance, and Preservation.  [3]  His theory brings out that man is a wise, sociable being who can judge the ill effects of going to war with men. It can be noted that Lockes has positive view of the state of nature and of human beings. Locke brings in the concept of private property which in all probability leads to inequalities of wealth. In order to ensure the security of the natural laws, and the inequality of wealth, man to enter into a community governed by a set of laws and the government. Locke disbelieves in censorship by the state, and says that state must exist and function separately from the people. The main goal of state is to ensure personal safety and protection of personal property rights. If it fails so he empowered people to revolt against the state, and, to go for a revolution if it abuses its authority. Hence unlike Hobbes, Lockes government is not absolute. Its powers are limited to an extent where it starts encroaching on public good. JEAN JACQUES ROUSSEAUS THEORY OF THE SOCIAL CONTRACT Jean Jacques Rousseau (1712-1778) remains one of the first thinkers to offer us a strong critique of modern social and political institutions in the name of the modern values of equality, liberty and democracy.  [4]   Rousseaus theory on the state of nature shows in progressive stages how men, from behaving like animals, transform themselves into a society. This society, according to Rousseau, is not civil at all as it gives rise to more corruption and negative feelings in Mans mind. Thus Rousseaus view point differs from Hobbes or Locke who believe in the transformation of men from the state of nature to a more civil society. Rousseau in his theory favours men in the state of nature in which they only have natural differences rather than having political, social or economic differences. But however we have no moral liberty in the state of nature, because we have not yet developed a moral sense. This moral sense can only be born in society, and we need to establish a society in which, not only do we preserve the liberty of the state of nature, but also provide the conditions for us to achieve moral freedom.  [5]  So in order to solve this problem men enter into a social contract. The new polit ical entity which is formed as a result of this contract reflects and works for the general will. This general will leads to the protection of individual liberty which as a corollary leads to the removal of economic, social and political inequality. Thus; Rousseau says; that it is only because of this general will that the sovereign is indivisible, inalienable and infallible.  [6]  Because of this people are ready to lay down even their right to self-preservation. This concept, as clearly seen, is a stark contrast to Hobbes and Lockes theory. In this way one sees that all three Hobbes, Locke and Rousseau differ in their theories of the Social Contract. All three of them start off by describing the state of nature and mans progression into civil society. But, however, the reasons which force man into such a society differ from one author to the other. This, in turn, leads them to have a contrasting view point on the powers and duties of the sovereign as well the state. Despite the differences in their viewpoints, their theories have one common thread running through them which reflects that The Social Contract is the best way to maintain peace and order. Though this end propagated by them is the same, the means and prerequisite conditions differ.

My Career Goal Essay

I always ask myself a question of what I want to be and what goals I am going to achieve four years later. Four years later, it is hoped that I can get the most out of my education, becoming more independent and mature. Four years later, it is hoped that I can be a journalist who contribute as much value as I can to my city. My first career goal is to be a journalist who writes for newspaper. A journalist who sees and tells the truth with honesty. Reporting the news completely. Presenting all sides of viewpoints unbiasedly. Seeking more sources when writing a news so as to be sure of multiple sides are presented. Secondly, helping the public society but the government will become one of my main concern. It is hoped that I can be independent from the government. Keeping a watchful eye on the government and making representation to the government about the unjust policy or measure. Therefore, I can supervise the government as to be sure that they do their work properly. Moreover, bridge the gap between society and real life is also my concern. Passionate on providing the information of the causes of the accident so as to raise the public awareness of the things going on the social issues. Finally, sincerely hope that I can hold on the mission which inspired by principle of freedom, of information, of expression in my career life with all attempt, determination and faith in justice. I always ask myself a question of what I want to be and what goals I am going to achieve four years later. Four years later, it is hoped that I can get the most out of my education, becoming more independent and mature. Four years later, it is hoped that I can be a journalist who contribute as much value as I can to my city. My first career goal is to be a journalist who writes for newspaper. A journalist who sees and tells the truth with honesty. Reporting the news  completely. Presenting all sides of viewpoints unbiasedly. Seeking more sources when writing a news so as to be sure of multiple sides are presented. Secondly, helping the public society but the government will become one of my main concern. It is hoped that I can be independent from the government. Keeping a watchful eye on the government and making representation to the government about the unjust policy or measure. Therefore, I can supervise the government as to be sure that they do their work properly. Moreover, bridge the gap between society and real life is also my concern. Passionate on providing the information of the causes of the accident so as to raise the public awareness of the things going on the social issues. Finally, sincerely hope that I can hold on the mission which inspired by principle of freedom, of information, of expression in my career life with all attempt, determination and faith in justice.

Ancient Greek Influences Essay - 886 Words

Historians have long considered Ancient Greece to be one of the most influential societies on modern day life. Ancient Greece has inspired the modern world in five main areas: theatre, government, philosophy, art, and architecture. Theatre flourished in Greece, particularly in Athens, between c. 550 BC and c. 220 BC. During its beginnings theatrical performances were part of Dionysia, a festival held in honour of the god Dionysus. The plot of the plays was always inspired by Greek mythology, a theme that is still common today. Many modern plays and movies have been directly based on or incorporated elements of Greek mythology or simply mythology in general. Every play had a chorus, though the size and importance of it varied. The†¦show more content†¦Love also became a principle element of Greek theatre during this time. Greek comedy inspired much of modern romantic, generational, and situational comedy. Satyr plays blended elements of tragedy and comedy, and featured mock drunkenness, sexual props and costumes, as well as pranks and gags. Influence of the satyr plays can be seen in genre of burlesque, which involved elaborate, risquà © parodies of well-known operas, plays, and ballets. Modern comedi es, which typically involve practical jokes, sexual humour, and drunkenness, are inspired by satyr plays as well. Ancient Greece was one of the first democratic societies and has greatly influenced modern day governments. Although the Greek idea of democracy is different from what is practiced today, their ideas formed the basis for modern democratic governments. Prior the invention of democracy, citizens had no rights and there were no guidelines for who was considered a citizen. Democracy gave voting rights and the ability to hold office to citizens – free men born in Greece, usually landowners. Today’s modern democracy is accessible to all people and has a higher degree of organization and hierarchy, it still derives its basic prinicples from Greek democracy. The origins are Western philosophy and sciences are found in Ancient Greece, beginning with the pre-Socratic philosophers. These philosophers began to examine the world in a way that no one else had before; they wanted toShow MoreRelatedAncient Greek Influence On The Modern World1442 Words   |  6 Pages Ancient Greek Influence on the Modern World Knowledge of ancient Greeks is still influencing the modern world through their advancement and development of government, military, sciences, mathematics, art, and architecture. Centered around perfection of the mind and body, ancient Greek society can be seen through these various areas of their society. The ancient Greek society began with having monarchies and oligarchies, but in 510 AD Athens would create the first democracy (Carr). Athens was ruledRead MoreThe Influence of Ancient Greek Mythology on Modern Society Essay1055 Words   |  5 PagesAncient Greek society fell over 2000 years ago but despite this, its mythology still continues to influence our western society. References to Greek mythology can be found all through time and in our western culture. The influence of Greek mythology can be found in our science, arts and literature and our language. When Ancient Greece fell to the Roman Empire, Rome adapted its mythologies which still influence us today as they have through history. That is not to say that Greek mythology wasn’t influencedRead MoreHow The Ancient Greeks And Romans Still Influence Our Modern World869 Words   |  4 Pagesimportant for students to understand how the ancient Greeks and Romans still influence our modern world. Ancient Greece was the bi rthplace modern mathematics, science, philosophy, architecture, literature, theater, art, architecture, Democracy, Law, and competitive sports. The term mathematics was invented by Pythagoras. It means that which is learned. In turn, mathematical theories were applied to building the great architecture of Greece. The great Greek temples are visual representations of theRead MoreAncient Greece s Influence On The Life Of The Greek Peoples1898 Words   |  8 Pagesthe poor, sick, and elderly. Hospitals have changed and evolved over time to the sometimes massive centers for healing that we have now. Ancient Greece As far back as 1200 B.C., in Ancient Greece, medicine played a very important role in the lives of the Greek peoples. As all other areas in their lives were expanding, so did their medical knowledge. Ancient Greece was steeped in mythology, such that, no matter what went on in the world around them, it was explained as having something to do withRead MoreEssay on The Human Body in Ancient Greek Sculptures1015 Words   |  5 PagesThe Human Body in Ancient Greek Sculptures The primary focus of ancient Greek sculptures was that of the human body. Almost all Greek sculptures are of nude subjects. As the first society to focus on nude subjects, Greek sculptors attempted to depict man in what they believed was the image of the gods and so would come to celebrate the body by striving for verisimilitude or true – likeness (realism and naturalism!).(Riffert) Not only did the Greeks celebrate the human form in their art but alsoRead MoreThe Importance Of Soil And Evaluation Of Taxonomic Evidence748 Words   |  3 Pagesmisogynistic evidence from ancient Greek literature. Consumption Meanwhile, assiduous ‘ethnography (Harrison et al., 2014, p.14)’ provides evidence of the consumption habits of Ancient Greeks. High end pottery, designed to promote the owners status, included the addition of precious metals. Society’s elite paradigm of leisure included boisterous ‘drinking games (Hughes et al., 2014, p.92)’. This Stamnos functioned as a vessel for mixing wine enjoyed by heavy drinking Greeks who seldom enjoyed theirRead MoreAnalysis Of Neil Fraser s The Golden Age 1893 Words   |  8 PagesTheatre History Explained Neil Fraser outlines the history of theatre from Greek and Roman times, all the way through the twentieth century. Fraser makes a claim that theatre truly began in Greek culture with even the Roma’s looking upon that time as â€Å"the golden age†. â€Å"The Romans looked back on Greek theatre of circa 600BC as a golden age, and we can still make a case for the great plays of that period as having never been bettered.† (Fraser, 2004, pg.5). Some of the more important highlights ofRead MorePlato, The, And The Myth Of Er1757 Words   |  8 PagesIn 399 BCE, nineteen years before Plato transcribed Republic, classical Greek philosopher Socrates was formally put on trial and executed on the citation of two â€Å"impious† acts: having â€Å"failed to acknowledge the gods that the city acknowledges† and â€Å"introducing new deities.† These two recognized accusations, and the punishment that Socrates paid for them through a poisonous hemlock-based liquid, was witnessed by his student, Plato. Plato was inspired to later write Socratic works and dialogues dedicatedRead More Water and Womanhood in Ancient Greece Essay2210 Words   |  9 PagesIn the times of ancient Greece, there were ample tales, myths, and legends surrounding the realm of the sea; many of which included fearsome beasts, epic struggles, and angered gods. There are tales of vengeance, spite, cruelty, and rage, but there are also those of understanding, compassion, helpfulness, and benevolence. When one subjects many of the more malevolent (and sometimes disturbing) tales to closer inspection, it becomes fairly evident that a great number of these stories use a feminineRead MoreAnalysis Of The Movie Kabuki 3062 Words   |  13 Pagesentertainment, and included stylized fighting, aerial stunts, exaggerated makeup and costuming, and physical and verbal comedy. 2. Nixon in China - Nixon in China is an American opera portraying President Nixon’s historic visit to China. The opera pulls influences from the highly stylized Beijing opera performance style, and portrays the clash of Asian and Western cultures that was manifested in the US’ tense relationship with China prior to Nixon’s visit. 3. Center Stage Left - In traditional western theater

Ways And Means Of Deposit Mobilization Finance Essay - Free Essay Example

Sample details Pages: 14 Words: 4187 Downloads: 7 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? In wake of the financial meltdown that started in 2008, financial institutions were the worst beneficiaries of the global crises. Pakistan also was not spared and economically suffered a supply shock in the form of all time high oil prices which took the inflation to its all-time height to 22%. To manage these shocks Pakistan immediately hurried to IMF for bailout package for more than 10 billion dollars while SBP played its role by increasing the discount rate and other statutory requirement to curb the rising inflation while relaxing the capital requirements for banks. Don’t waste time! Our writers will create an original "Ways And Means Of Deposit Mobilization Finance Essay" essay for you Create order The aftershocks of the global meltdown in 2010 are still haunting the Banks in Pakistan, in shape of detoriation of quality loan portfolio. In 2008 alone the NPL portfolio witnessed an astonishing rise of 64.7% from 218 billion to 359 billion. This increase in portfolio detoriated the banking industry profit by 107 billion, which was 46 billion in excess of 2007, while in 2009, NPL portfolio rosed by 20.3%. The second major impact to the banking industry was the increase in cost of funding which surged from 4.3% in June 07 to 6.2% in June Dec 09 but has come down from 7.2% in March 09. Surprisingly the spreads didnt shrink by dec 09 and remained stabled at 6.8%. The main reason is that the banks are cutting down the rates on deposits to maintain the spreads. On one hand the current deposits are increasing in the industry on the other hand saving deposits are substituting with fixed deposits which intails increases the cost of funds. This shift in the deposits is primarily attribut ed firstly to SBP incentive policy to mobilize long term deposits through CRR and secondly banks own initiatives to narrow the mismatch of assets and liabilities. And finally the last but not the least is SBP initiative to introduce a floor of 5% on saving deposits beginning June 2008 which increased the cost of funds by 56 bps. In 2010 Pakistan yet again witnessed a new shock in shapes of floods destroying the 70% of agricultural land. The Banking industry is yet to take the impact of these floods which could actually hit the SME sector in a very terrible manner, the impact of which would hit the dec 2010 results. The after shocks of these floods would again trigger the inflation rise to 25% as per the government statistics while IMFs calls for 22% inflation, which currently is standing at 13%. HMB was not the exception to this aftershock phenomenon, but has greatly managed itself to maintain its profits by efficient management of expenses, change of leadership and lowering of c ost of deposits. Nevertheless, the rising inflation would again bring in the new economic crises, which would take banking industry towards a point of saturation in terms of deposits and its cost while profits of the industry would be snatched by the rising NPL portfolio. The need is to gather the low cost deposits especially the current and saving deposits, for which there is a dire need to look for segments of customers which could provide such deposits, a white space in the economy. This paper is about highlighting the white space within the downfall economy, for the banking industry and for my bank HMB. Through this paper I would try to identify the underserved segments through which HMB could benefit from it and in turn lower its cost of funds. The paper would highlight the problem as to why there is a need for HMB to get the deposits from unserved segments. Secondly identification of such segments through secondary research data and finally the conclusion. OVERVIEW OF HABIB METROPOLITON BANK (HMB) Habib Metropolitan Bank Limited (HMB) was incorporated in Pakistan as a public listed company in 1992 under the name, Metropolitan Bank Limited. The bank commenced full scheduled commercial banking operations in October 1992. Metropolitan Bank, from October 1992 to September 2006, remained a highly rated bank and with its nationwide 51-branch on-line network, established as a distinguished provider of trade finance services. On October 26, 2006 Habib Bank AG Zurichs Pakistan operations merged into Metropolitan Bank Limited and the merged entity was named Habib Metropolitan Bank Limited (HMB). Demonstrating a strong commitment to Pakistans economy, HBZ is the principal shareholder of HMB. HMB operates in all major cities of the country. The bank ranks within top 10 in Pakistan with a strong vision to be the most reliable financial institution. HMB has its primary focus on retail banking and trade-finance and also offers highly innovative e-banking. The groups flagship and HMBs pr incipal, HBZ (incorporated 1967) enjoys international ranking of 687 in terms of capital. With headquartered in Switzerland, the HBZ Group also operates in Hong Kong, Singapore, United Arab Emirates, Kenya, South Africa, United Kingdom and North America. The Pakistan Credit Rating Agency (PACRA) has allotted both long-term and short-term ratings of Habib Metropolitan Bank Limited at AA+ (Double A plus) and A1+ (A one plus), respectively. These ratings, being the highest amongst the local sector private banks, denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments. VISION STATEMENT Based on the foundation of Trust, to be the most respected financial institution, delighting customers with excellence, enjoying the loyalty of a dedicated team, meeting the expectations of regulators and participating in social causes while providing superior returns to shareholders 5 YEARS OF FINANCIAL ACHIEVEMENTS WITH REGARDS TO DEPOSITS Clearly we can see that HMB has exhaled in the Deposit area from 102 billion in 2006 to 142 billion in 2009 showing a remarkable increase of average 10% each year. The average has gone down due to economic slowdown and in 2008 where it has increased by only 6%. A tremendous increase in 2005 was due to the merger between the HMB and Habib bank AG zurich which has not been considered in deposit growth highlights due to one off situation. As for funding composition the deposit mix decreased from 70% to 60% mainly due to the increase in borrowing mix from 17% to 29%. This main increase in borrowings was due to money market borrowing and SBP export refinance borrowing which both grew substantially. YIELD ON EARNING ASSETS / COST OF FUNDS / NET MARGIN % The modified ROA is self explanatory whereby it clearly depicts that the ROA is falling due to decrease in PAT margin which is falling to due to high markup expense. This is clearly evident that from the cost of funds graph above and Deposit mix where the Cost is moving from 7.5% in 2008 to 7.9% while current deposits mix fell from 32% in 2005 to 25% in 2009. While the mix of high cost time and saving deposits has grown significantly. MODIFIED ROA ROE HMB ACHIEVEMENT WITH ITS PEERS HMBs yield has improved from 10% to 11.4% however the main concern is the increase in cost of funds which also increased from 6.9% to 7.8%. The increase in yield incrementally contributed towards the 0.4% increase in margin but still HMB is the second last bank among its peers. If we see the deposit comparison HMB has achieved the 6th ranking among the peers while its stands 7th in peers in growth of current deposit. Below is the graph of deposit composition of Current and Saving Accounts (CASA) of the bank. HMB has the 6th largest current deposit composition while is the last in savings and CASA overall. It must be kept in mind that these current and saving deposits actually lower the cost of deposits increasing your margin. We can conclude easily that to succeed in this market and provide shareholders a better return HMB needs to strive and untapped other markets for deposits before other banks comes in and start giving competition. HMBs main priority has been in providi ng trade finance services which it does and because of this premier reason HMB has been able to develop its current deposit portfolio. However, due to economic slowdown and current flooding crises, the economy would be badly affected by increase in discount rate, inflation which is expected to exceed 20% and higher taxes. All these factors would bring the business situation at a saturation level. It would be this moment when bank would aggressively try to find ways to access other markets which is mainly the adult population of this country. HMB at this moment would have a edge as it would be delivering those segments already and would be a market leader. IDENTIFYING UNSERVED SEGMENTS A survey was conducted by World Bank during the year 2010, regarding the populations who have access to financial sector all across Pakistan. The extracts of the said survey was analyzed during my research, through which relevant portion were extracted for further analytical process. Due to the availability of authentic and reliable World Bank data (secondary data), extracting primary data was like reinventing the wheel. Strata were built upon the extracted secondary data i.e. population for the research, for accurate and desirable results. The prime focus of the research is to identify the unserved or underserved segments, therefore the relevant facts and figures, were identified, analyzed and then fine tuned according to my desire hypothesis. KEY FEATURES OF SECONDARY RESEARCH DATA 47% men and 53% women (18 and above) 47% housewives form the single largest group followed by 30% self employed and 12% employed Largely married (71%) and 22% single Mostly (74%) ordinary members of the household rather than the head of the household 63% rural and 37% urban 31% illiterate, 54% with some primary to intermediate education and 16% graduates and above Predominantly in Punjab and Sind FINANCIAL ACCESS STRAND The Access Strand places the adult population along a continuous usage of financial services, both formally and informally. The financial access strand has four segments, as follows: The Banked Those using Formal Other financial products and services Users of Informal financial products and services, and The Financially Excluded Banked This group comprises of adults who currently use one or more traditional banking products supplied by a financial institution. This is not an exclusive usage category; adults in this group may also be currently using one or more formal-other or informal products. Formal Other This group comprises adults who are currently using one or more formal product supplied by a financial institution other than a bank by a financial institution operating under legal governance. Such products include, for example, insurance, leasing, microfinance, postal financial services etc. These people do not have bank account, but have at least one financial service from a regulated non-bank financial service provider. Thus, this is also not an exclusive usage category, as people in this segment may also be using one or more informal products. Informal This group consists of any adult who does not have a bank account or a formal-other service, but uses one or more of Informal products that operate without legal governance. Examples include borrowing from a money-lender, shopkeeper or participating in a savings committee. This is exclusive usage the adults in this segment do not currently use any formal products i.e. Banked and Formal Other. Financially Excluded These are those adults who are excluded from all financial services Banked, Formal Others and Informal. The Banked and Formal Other segments together make up people who are Formally Included. Adding those who use informal services exclusively broadens this group to those who are Financially Served. The latter are financially served in the sense that they are using financial services from either the formal or informal sectors, or both.The remaining adult population, the fourth segment i.e. the Financially Excluded, are the ones who do not have any services from any of the formal and informal sources. They are usually using sub-optimal alternatives or solutions such as sending money by hawala/hundi (informal means of money transfer), saving at home, and borrowing from family and friends. CURRENT FINANCIAL MARKET SITUATION According to the data gathered people having bank accounts are merely 11% while another formal sector serves only the 1% adult population of our country. This means that only 12% in total is under a threshold of documented economy while the flow of money through undocumented area is 88%. OPPORTUNITY!!!! ACCESS STRAND ACROSS GENDER The issue of financial exclusion is most severe along gender lines. There are wide gaps between men and women who are banked, informally served and the financially excluded. ACCESS STRAND BY EDUCATION Clearly, the choice of being banked improves progressively with level of education. However, at the same time informal services are very popular across educational groups, though less popular among those with graduate level of education and above, and very low among the post graduates. Moreover, across all educational levels there are large groups of people who are financially excluded. In fact, more post graduates are financially excluded (22%) than those who are availing informal financial services (9%). ACCESS STRAND BY PROVINCE The issue of financial exclusion is most severe in Baluchistan (84%) followed by KP (61%). All other provinces have access to some form of financial service, be it formal or informal. In all categories of access Baluchistan lags far behind than other provinces. The access scenario looks relatively bright in AJK due to the earthquake in October, 2005. In order to receive governmental livelihood support, people were required to open a bank account where aid could be deposited. According to one estimate 1.5 million people largely residing in AJK have been affected by the earthquake (Earthquake Reconstruction and Rehabilitation Authority). FINANCIAL ACCESS SALIENT FEATURES More than half of the adult population that is financially excluded comprises predominantly of housewives and students. The informal sectors is predominantly being used by men with less education and working in low paying jobs in the informal sector, agriculture and daily wages. The issue of access is most pronounced along gender lines. Women by far have less access to all kinds of financial services (formal and informal) as compared to men. Large majority of women are financially excluded altogether. Financial exclusion not only from any kind of formal but also informal financial services is most severe in Baluchistan. There is high co-relation between education and being banked. However, at the same time there are large number of people who are not availing any kind of financial service (formal and informal) across educational groups even among the graduates and post graduates. Almost twice as many people are banked in urban than rural areas. Otherwise the issue o f exclusion and access to formal and informal services is similar in urban and rural areas. Single people tend to be most outside the financial services net (formal and informal) as compared to married and widowed. FINANCIAL LITERACY The table shows the level of financial literacy among the Banked people relating to the terms that people usually hear and understand. Green highlighted portion refers to the awareness and understanding about very basic financial terms used commonly in the population which generally is high. The light blue highlighted region for the understanding about the financial terms related with the formal financial services which is less than high, but is less among the women. The yellow highlighted portion refers to the sophisticated financial terms understanding which is yet even lower and again women lag considerably behind men. The pink section refers to understanding new rising types of banking among people who are banked, particularly women! INTEREST IN FINANCIAL MATTERS AND SOURCES OF FINANCIAL INFORMATION A considerable mass of adult Pakistanis is interested in financial matters. Overall 71% follow financial news sometimes, often and always rather than never. However, the level of financial literacy among the overall adult population in Pakistan is very low as depicted by the previous table. The differentiating factors across the four segments show: Banked population relies largely on newspapers and colleagues at work. Financially Excluded and informally served depend on elder brother, father and other family members. The informally served also depend on local community forums like jirga for their information while those in the formal other segment depend on shopkeepers. Surprisingly, television and radio are quite on the peripheries across the Access Strand. AREAS IN WHICH TRAINING IS WANTED BY ACCESS STRAND Training interests of the informally served, financially excluded and those using other formal services revolves around understanding basic money management and financial concepts such as preparation of household and personal budgets, how to save, and how to calculate profit on a bank account. Whereas the banked are only marginally interested in learning about the products offered by banks. SALIENT FEATURES OF INFORMAL PRODUCT USERS AND FINANCIALLY EXCLUDED The category of unbanked users having usage of informal products has the following characteristics: Most of them are Self-employed on daily wages within the informal sector. Male has the majority for usage of informal products. This sector contains people having jobs related to: Agriculture; Laborer/Worker for Daily Wages; Self-employed (Formal Sector); Cart Holder/Hawker; Services Selling Workers i.e. Carpenter, Barber, Ironsmith etc Unemployed Looking For A Job Majority of them are from Punjab and Sind. Informal users are mostly fall in category of married. Education-wise 4 To 9 Classes, Primary Complete. And lastly they all are from rural area. The characteristics of financially excluded users are: Surprisingly Female leads this segment in a majority. These females are mostly housewives and singles. Employment Status: Housewife Earn Income Yes Employment Status (Single): Student Earn Income No Marital Status: Single or widowed Baluchistan and NWFP Education-wise these are Illiterate. Resides in Rural areas. 48% of informal users say that they would like to have their own bank account while 31% of Financially excluded people would like to have a bank account. This means that almost 25 million people of both categories like to have bank account. WHY PEOPLE ARE UNBANKED? If 25 million of these people would like to have a bank account then what are the reasons that they are still unable to get involve with any of the bank. But before we go deeper into the unbanked people problems we should know why the 11% banked population use bank for: The above table gives solid evidence that banks are being used primarily for the basic and necessity based reasons rather than for any sophisticated, value added and productive reasons. This can be further verified that the percentages for relatively more sophisticated, productive or convenience based reasons such as accessing a business loan, money transfers, earning an income or payment of utility bills have been stated by very few respondents. Further analysis reveals that urban areas are more towards the money safety than rural. Also the rural areas want to be more into the business relation and to access personal loans. Now coming back to the unbanked reasons, the following table gives the right idea: Access related reasons, interestingly, are not the most important reasons for being unbanked, than income related reasons are. Nevertheless people who have cited choice and access related reasons are significant and is a more ready potential market for banks. These segments need to be studied and analyzed closely so that their reasons for being unbanked can be addressed in a more targeted fashion. Contrary to the expectations, socio cultural reasons have been cited by a mere 12% women as a barrier to being banked! HOW DO PEOPLE RECEIVE THEIR INCOME Pakistan is predominantly cash based economy outside the formal economic structures. 92% of the adult Pakistanis receive their income in cash and almost half of the people say that some of this income goes into a bank while 1/3 say that None of it is deposited in a bank! SAVINGS AND INVESTMENTS SBP CONCLUSION Although National savings as a proportion of GDP increased 40 bps during FY09 to 14.3 percent, the savings rate in Pakistan is the lowest among neighboring countries. Moreover, this minor increase was primarily attributed to the surge in workers remittances during the year as domestic savings as a percent of GDP declined from 11.5 percent in FY08 to 11.3 percent in FY09. The decline in savings during FY09 is primarily attributed to the sharp reduction in overall economic activities and strong inflationary pressures in the economy. SALIENT FEATURES OF SAVING AND INVESTMENTS 56% of the total adult population saves or invest either formally or informally. However, 53% save informally while formal savers are only 3%. Saving at home is the most widely practiced across all segments The top 4 means of saving across Pakistan are all informal. Only 8% of those who save do so with a bank. Even though people perceive government associated financial institutions as secure, only 2% are investing in Prize Bonds, and 1% in National Savings Schemes. Almost a quarter of the adult population (23%) saves through Committees. Contrary to expectations, committees are an urban (38%) phenomenon rather than rural (14%) with nearly equal popularity among men and women (about a quarter each) INFORMAL WAYS OF SAVING USED BY BANKED Even among the banked people, saving at home is very popularamong the banked across urban and rural areas. Same goes for participation in savings committees, which are more popular among the banked urban rather than the banked rural people. Investments in land and livestock are more popular means of saving among the banked rural and among men rather than in urban areas and among women. REASONS FOR SAVING There is a lot of overlap as to the reasons for savings, that is why the circle overlap so much It is clear however that the financially excluded and informal save for more essential things than the banked who save for future retirement/holidays etc. PERCEPTION In thinking about the financial service providers, what come more to peoples mind are the prerequisites for transacting with them rather than their services. The typical service features that consumers seek from commercial banks and other financial service providers have scored low. This reinforces the findings of the focus group discussions regarding weak client service orientation of commercial banks. Peoples perception about security of money at the banks is high which also conforms to an important reason that the banked have stated for having a bank account. As for informal financial service providers, the top perception statements for committees and money lenders relate to no requirement of documentation, and formalities. This is in striking contrast to the perceptions regarding the formal sector providers. Additionally, more people trust the informal sources as compared to the formal financial institutions. As compared to the formal service providers, relatively speaking s atisfaction with the informal service providers is high. FINANCIAL ACCESS FRONTIER The frontier is a tool used to un-pack areas where opportunity exists to bank the un-banked. The analysis is based on reasons for not being banked although some duplication of response is possible, however the tool gives a good indication of where focus of attention should be. FINANCIAL MARKET DEVELOPMENT FRONTIER So finally now, our frontier tool has identified the unserved segment of the population and that is the informally served segment which is now an opportunity. This segment can be divided into two parts: Market Enablement zone Market Development Zone Market enablement zone is that segment which needs refinement in terms of the perception towards banking while market development zone is ready to serve zone, i.e the bank should start working on the products for such sub-segment to cater their needs. Following table would further strengthen my base of identification: MARKET DEVELOPMENT ZONE MARKET ENABLEMENT ZONE MARKET RELOCATION ZONE (Please note that HMB has its internal policy to serve the urban segment largely than the rural areas and therefore the concentration of services to banked the unserved will be urban area) The distinguishing thing about this informal unserved segment is its saving style which is mostly saved at home both in urban and rural area and which does not goes in the banked economy. Secondly, this segment is more dependent on committee based saving method. Interestingly in both the criteria, female segment has marginally taken lead then males. It is therefore suggested that ways should be develop to cater the needs of the female segment while products should be developed to cater the increasing trend of committees. For example a door step collection scheme should be introduced with periodic contribution or commitment program. CONCLUSION Constraints to financial access arise from high levels of poverty, with low awareness of information about financial services as well as gender biasness. Technology can be harnessed to help expand geographical outreach and overcome low literacy levels. Physical access can be increased via new technology solutions such as branchless banking and mobile banking. Simplified financial processes and procedures, client segmentation and product diversification can help lower costs and manage risks better. Summing up the whole data analysis, best formula that comes to ones mind is rapid scaling up of access via technology, literacy gains, and financial re-engineering of processes. Client segmentation is one way that would allow institutions to better tailor products to client needs as well as reduce costs and manage risks more efficiently. Suggestions include: Use of traditional saving arrangements and rotating savings, like for example in Philippines family house-holds were provided with Ganansiva Box to save their daily savings; this was called piggy banking. Smaller size products and bulk service to better attract lower income groups. Literacy should not be a requirement to access financial services. Innovative ways to reach customers such as decentralized operations, transaction at door step, mobile units etc. Lastly, REACHING OUT TO WOMEN due to their abilities to better manage debt, their stronger saving patterns and client loyalty present an untapped profitable clientele base for HMB. Understanding women needs more precisely and reflecting those in the financial products would ensure an increase in womens financial.