One of the success stories in microfinance sector is the unique opportunity in Pakistan to utilize alternative delivery channels due to the presence of a sound and pro-growth regulatory framework, dense population, and high demand for financial services. The motivation for developing alternative channels for service delivery is twofold: firstly, there is enormous scope for expanding outreach, especially to hard-to-reach rural areas.
The emerging models relying on “banking agents” will greatly extend the distribution of financial services to the poor and marginalized segments. Secondly, alternative delivery channels promise significant cost reduction to institutions. The traditional microfinance business is based on personal, one-on-one relationships. Thus, personnel expenses often account for a  BIS central bankers’ speeches  1  significant portion of microfinance operating expenses.