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omen’s financial inclusion is a critical factor in economic development, yet in many countries, including Pakistan, systemic legal and regulatory barriers continue to limit women’s access to financial services. While financial empowerment is often framed as a matter of economic policy, it is fundamentally a legal issue, shaped by the regulatory environment that governs banking, access to credit and property ownership. A financial system that does not account for gender disparities in its laws and regulations inevitably reinforces existing inequalities, restricting women’s ability to participate fully in economic life. Pakistan has acknowledged these challenges through policies aimed at increasing female financial participation, but despite these efforts, the gender gap in banking and financial access remains significant. A closer examination of the legal and regulatory framework reveals that while progress has been made, many structural barriers persist, preventing women from exercising financial independence on equal terms with men.
The State Bank of Pakistan’s Banking on Equality policy, launched to address these disparities, represents an important step in embedding gender considerations within financial regulations. However, despite its progressive intent, significant gaps remain in its enforcement and broad financial laws continue to reflect systemic biases that limit women’s financial autonomy.
The introduction of targeted policies, including the requirement for banks to collect and report gender-disaggregated data and the emphasis on financial literacy programmes for women, represents an acknowledgment of the problem at the institutional level. One of the primary legal challenges women face in accessing banking services is the rigid Know Your Customer and Anti-Money Laundering requirements. Meaningful inclusion requires more than policy articulation; it necessitates a fundamental shift in how financial institutions engage with female customers. The implementation of these policies has remained inconsistent, with many commercial banks continuing to prioritise male clients, particularly in lending and investment. Women, especially those from lower-income backgrounds, still struggle to open bank accounts due to restrictive KYC requirements, which often demand formal identification and proof of employment that many women in informal sectors cannot provide. These regulations, designed to enhance financial security, often disproportionately affect women, particularly those in informal employment or without independent financial histories. Documentation requirements such as national identity cards, proof of income and verifiable sources of funds become barriers for many women who lack formal employment or property in their names. While financial regulators have introduced simplified account-opening procedures for low-income segments, they have not adequately accounted for the structural inequalities that prevent women from meeting even the relaxed criteria. Without targeted regulatory reforms that acknowledge women’s limited access to formal financial documentation, these requirements will continue to exclude a significant portion of the female population from the banking system.
The legal framework governing access to credit is another major impediment to women’s financial inclusion. Pakistan’s banking regulations emphasise collateral-based lending, making it difficult for women, who often do not own property or high-value assets, to secure business loans. Although microfinance institutions and small business loan schemes have been introduced to facilitate women entrepreneurs, their effectiveness remains limited due to high interest rates, restrictive repayment terms and the requirement for male guarantors in many cases. The regulatory focus on traditional credit models fails to accommodate the realities of women-led enterprises, which often operate in informal sectors and rely on non-traditional financial structures. A more inclusive regulatory approach will require banks to adopt alternative credit assessment methods, such as cash flow-based lending and behavioural credit scoring, to extend financial access to women who do not fit within the conventional banking model.
The implementation of gender-focused banking policies has been complicated by a lack of adequate enforcement mechanisms. The Banking on Equality policy mandates that financial institutions set gender diversity targets, improve women’s access to financial services and integrate gender-disaggregated data collection into their reporting structures. However, the absence of regulatory penalties for non-compliance means that many banks have adopted superficial approaches to these requirements. There has been an increase in the number of women’s bank accounts, but many remain inactive, highlighting that access alone does not translate into financial participation. Regulatory authorities must go beyond advisory frameworks and introduce enforceable compliance measures, including financial incentives for institutions that demonstrate tangible improvements in women’s financial engagement and penalties for those that fail to meet inclusion targets.
The growth of digital financial services has been identified as a potential solution to the financial inclusion gap, yet current regulatory policies have not fully addressed the barriers that prevent women from leveraging digital banking. Mobile money services, fin-tech platforms and digital lending solutions have the capacity to reach women who are excluded from traditional banking systems, but regulatory challenges, including restrictions on mobile wallet account registration and security concerns related to digital transactions, continue to limit their accessibility. Many women face difficulties in registering mobile wallets due to biometric verification requirements, which become particularly problematic for those in rural areas with limited access to identity registration facilities. Additionally, the regulatory environment does not provide adequate consumer protection mechanisms against financial fraud, disproportionately affecting women who may be new to digital banking. Strengthening the legal framework to enhance the security, accessibility and ease of use of digital financial services is critical for expanding women’s participation in the financial sector.
Pakistan’s inheritance laws also play a significant role in perpetuating financial exclusion. While Islamic and statutory laws grant women inheritance rights, enforcement remains weak. Many women are denied their rightful share of property, which in turn affects their ability to access credit and accumulate wealth. Banking regulations that rely on property ownership for financial transactions and loan approvals reinforce this systemic disadvantage. Legal reforms that strengthen women’s property rights and ensure their enforceability would have a direct impact on financial inclusion by enabling more women to own assets that can be leveraged for economic participation.
Despite these challenges, some progress has been made in incorporating gender considerations into financial regulation. The requirement for banks to establish dedicated women’s banking units; the introduction of credit guarantee schemes for female entrepreneurs; and the expansion of financial literacy initiatives are all positive developments. However, these measures remain fragmented and are often implemented without a broader regulatory overhaul that addresses the structural issues keeping women financially marginalised. The reliance on voluntary compliance mechanisms means that financial institutions are not held accountable for failing to meet gender inclusion targets. A stronger regulatory stance is necessary, including mandatory quotas for female account holders; enhanced monitoring of credit allocation to women; and the establishment of regulatory oversight bodies specifically focused on gender equity in financial services.
A comprehensive approach to financial inclusion requires reforms that extend beyond banking regulations to address the underlying socio-legal barriers restricting women’s financial independence. Legal frameworks governing employment; property ownership; and family law must be aligned with financial regulations to create an ecosystem that supports women’s economic participation. This includes revising labour laws to ensure equal pay and job security for women, strengthening legal protections against workplace discrimination and ensuring that marital and inheritance laws do not serve as tools of financial dependency. Without an integrated legal approach, financial inclusion policies will remain limited in their impact, failing to address the deeper structural inequalities that prevent women from achieving economic autonomy.
Pakistan’s financial regulation landscape has made important strides towards recognising the gender gap in banking and financial services, but recognition alone is insufficient. The effectiveness of financial inclusion policies depends on their enforceability; the adaptability of regulatory frameworks to women’s economic realities; and the commitment of financial institutions to go beyond compliance and actively support women’s financial empowerment. Ensuring that financial regulations do not merely facilitate access but actively dismantle barriers is the next critical step in achieving genuine gender equity in Pakistan’s financial system.
The writer is an advocate of High Court, a founding partner at Lex Mercatoria and a visiting teacher at Bahria University’s Law Department. She can be reached at minahil.ali12yahoo.com