LAHORE: Roughly 13 percent of all adults in Pakistan have an individual or joint bank account, but when it comes to women the account penetration is much lower at five percent, according to a recent World Bank report. The report titled “The Global Findex Database 2014” revealed that financial inclusion
LAHORE: Roughly 13 percent of all adults in Pakistan have an individual or joint bank account, but when it comes to women the account penetration is much lower at five percent, according to a recent World Bank report. The report titled “The Global Findex Database 2014” revealed that financial inclusion is lowest in Pakistan in the whole South Asian region. Among the poorest 40 percent of the population only seven percent has an account, said the report that compiled the data up till 2014. “Thus, the women and the poor are more vulnerable segments of population that have less access in the financial system,” it added. The situation in other countries of the region is much better. In Bangladesh, 31 percent of the adult population maintains a bank account, 26 percent of its women and 23 percent of the 40 percent poorest operate bank accounts. In India, 53 percent of the adult population has a bank account, while 43 percent of its women and 40 percent of the 42 percent poorest people in the country maintain bank accounts. In Sri Lanka, 83 percent of the adult population owns a bank account and also 83 percent women maintain a bank account depicting rare gender parity in the region. The report further stated that designing appropriate saving products tailored to consumer needs could encourage accountholders to use their accounts for savings. One opportunity for increasing account use is to encourage accountholders, who now send or receive domestic remittances exclusively in cash or through OTC (over the counter) transactions instead of using their accounts. Another chance, if offered, is to pay utility bills and school fees through banks, the report said, adding that “When it comes to utility bills and school fees, however, the choice of whether to pay digitally or in cash often resides with the utility companies and schools.” Some people argue that low rates of financial inclusion are due in part to voluntary financial
exclusion and that the unbanked do not have an account because they choose not to have one. However, some other reasons cited by unbanked include lack of enough money, expensive accounts, financial institutions being too far away or religious inhibition to Riba (for which Islamic products exist). “Documentation requirements are another important barrier to account ownership, cited by around 18 percent of adults without an account across all regions,” the report said.