For background on the Financial Inclusion Insights 2016 surveys, data, and reports please follow this link. The full 2016 Pakistan Annual Report can be found here.

The State Bank of Pakistan’s (SBP) National Financial Inclusion Strategy (NFIS), launched in May 2015, set an ambitious goal of expanding access to financial services from 10 percent of adults to at least 50 percent by the year 2020. With three years left to achieve the NFIS target, what does the most recent FII data tell us about how inclusion is evolving in Pakistan and how the rate of progress can be improved? 

FII’s 2016 Pakistan Annual Report and Survey Data finds that access rose only incrementally over the last year, from 15 percent in 2015 to 16 percent in 2016. This means that almost approximately 45 million more adults will need to have access to formal accounts to achieve 50 percent financial inclusion as defined by the NFIS. Further, even if access is improved, registration and regular use of accounts may lag and prove a steeper climb. After all, the percentage of adults holding registered accounts with a full-service financial institution, did not increase at all over the last year, measuring 9 percent in 2015 and 2016.

FII data highlight, however, that these figures could be improved if the gap between the formal products and services on the market and Pakistanis’ actual, day-to-day financial needs and preferences is addressed.

After all, these access and inclusion levels are particularly low in contrast to Pakistanis’ active financial lives and needs. For instance, the 2016 FII survey data showed more than half of survey respondents had saved at least once in their lives, and even one in two adults without access to formal financial services had saved. People saved for emergency funds (62 percent), to make ends meet (57 percent), and to protect their families from crime (42 percent), among other less common reasons. Similarly, for example, 20 percent of Pakistani adults had borrowed before, most often for emergency spending and daily purchases. Clearly, Pakistanis are saving, borrowing, and transacting on a daily basis. Yet, for the most part, they are doing so in cash and via informal financial services rather than through formal institutions. In fact, 77 percent of Pakistanis adults who save do so in the form of cash at home and 20 percent use Rotating Credit and Savings Associations (ROSCAs). Interestingly, an increasing number of people are using formal DFS channels but, nonetheless, are not registering personal accounts, preferring over-the-counter (OTC) options. In 2016, while less than 1 percent of the population had registered a mobile money account, almost one in 10 Pakistani adults were mobile money users, with 93 percent of mobile money use being OTC.

Given this gap and considering other 2016 Pakistan Annual report highlights, what will be the key levers for building momentum towards improved access and account registration in line with the NFIS goals?

  • Design products and services that better reflect Pakistanis’ needs and daily lives. Despite relatively high awareness of formal financial services, survey respondents had a very low perceived need for them. In fact, 84 percent of Pakistanis who did not use any formal financial services said the main reason was they did not see a need. This is perhaps unsurprising given financial literacy is under 20 percent across all demographics in Pakistan and the economy’s current status as a cash driven one. If your neighborhood merchants all accept only cash, ATMs are scarce, and opening a savings account requires a long wait, wouldn’t you prefer to hold cash at home? Respondents’ second most cited reason for not using a bank account was the perception that they did not have enough money to make transactions (See Figure A). This common sentiment could reflect the kinds of products and services currently being offered, as well as their fees and minimum requirements. Client-centric design and investment in infrastructure such as expanding ATM and other points of service availability and deepening merchant acceptance of non-cash transaction tools could help expand access and usage.

  • To improve digital financial services (DFS) use, support the development of phone skills and access to phone ownership. In 2016, while 76 percent of Pakistani adults were aware of mobile money providers and almost two in three Pakistani adults knew of a mobile money kiosk or agent within 1 kilometer of where they live, the conversion rate from awareness to use was only 0.11 percent. This low conversion rate is, in part, an outcome of a low level of “preconditions,” or key resources and skills necessary for access to formal financial services. Factors such as SIM card ownership and the ability to send and receive a text are low, at 52 percent and 44 percent, respectively. Addressing these preconditions could help ensure that common needs such as P2P transactions and bill pay can be done through a mobile money account and without the assistance of an agent OTC.
  • Invest in developing women’s mobile phone skills, their access to phones, and programs that address social norms. The findings speak for themselves. In 2016, the gender gap in financial inclusion climbed back up to the 2014 level of 8 percent, after falling to 5 percent in 2015. As shown in Figure B, the gap is pervasive across all stages of the customer journey and across all demographics (poverty, education, geography, age and marital status).

Gender continues to be a key demographic differentiator in bank account registration where the gap between women and men increased from 5 percent to 7 percent between 2015 and 2016. Among Pakistani women, urban, wealthy and highly educated women reported registering accounts most frequently. However, women within these privileged demographics reported registering less frequently than poor, rural men.  One of the biggest factors behind the gender gap in Pakistan is women’s lack of agency and decision-making power (See Figure C).

Only 16 percent of women who have a reported income have sole control over how they use their money (compared to 44 percent of men), and less than 20 percent of women have control over how to use household assets or household spending. While 88 percent of married men have access to a phone, only 65 percent of married women do. In terms of SIM card ownership, 57 percent of men own a SIM card, while only 27 percent of women do. Finally, as the SBP continues to promote DFS, it is important to address the current phone skills gap across genders; 57 percent of men were able to send and receive a text versus only 30 percent of women. 

Government policies and initiatives in support of financial inclusion are key for advancing access and usage of financial services. Yet, as the data show, progress can be slow when contending with historical barriers to inclusion and competing against informal services. To achieve the NFIS goals, stakeholders will need to address the lack of financial literacy, technological capabilities, and phone access, particularly among women. Additionally, given the active financial lives described by the FII Annual Report, formal products must be tailored to better meet the needs of Pakistanis who are currently using cash and relying on friends and family to save, borrow and protect themselves against risk. 

What recommendations do you derive from the data? We’d love to hear from you.


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Nadia van de Walle
Senior Research Manager

Financial Inclusion Insights


Financial Inclusion Insights is an ongoing research program funded by the Bill & Melinda Gates Foundation and designed to build meaningful knowledge about how the financial landscape is changing across eight countries in Africa and Asia (Bangladesh, India, Indonesia, Kenya, Nigeria, Pakistan, Tanzania and Uganda). FII produces data and analysis regarding citizens’ financial lives, attitudes, awareness and use of, access to, and advanced engagement with financial products and services. Through our qualitative and quantitative research, we aim to provide demand-side insights into consumers' financial behaviors, produce information that can guide policy interventions, and identify pathways for the poor to gain the financial tools they need to improve their economic circumstances.