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May 8, 2021

Financial inclusion in Pakistan increases on mobile money

ISLAMABAD: Financial inclusion in Pakistan increased from 21 to 25 percent from October 20 to December 30, 2020 and it was mainly driven by mobile money adoption, Karandaaz’s survey found.

Karandaaz held a webinar to share the findings of the recently concluded survey on the impact of COVID-19 on financial behavior in Pakistan.

Waqasul Hasan, CEO of Karandaaz said the COVID-19 crisis has brought about a substantial shift towards digital financial services.

“It is an opportunity in a crisis that must be tapped. With enabling regulatory framework and institutional architecture in place, the financial industry can introduce products. The digitalization of financial services for both individuals and businesses can help overcome barriers such as costs and lack of access and open up new markets and livelihood opportunities,” Hasan said.

“With the recent launches of Roshan Digital Accounts and Raast - Pakistan’s instant digital payment system, and the recent release of the exposure draft of digital bank regulatory framework, the State Bank of Pakistan has been taking monumental strides to put in place a digital financial ecosystem at the national level,” Sohail Javaad, director payment system department at SBP said.

In Pakistan, the last financial inclusion insights (FII) survey was implemented prior to the COVID-associated lockdown in March 2020. This survey was conducted from October 20 to December 30, 2020 to measure changes in financial inclusion compared to the FII Wave 6 survey implemented earlier in the year.

The survey was designed and conducted in partnership with Kantar and is preceded by six waves of the FII survey. The FII survey is a nationally representative survey gauging financial inclusion and access to and use of mobile money and other digital financial service in Bangladesh, India, Indonesia, Kenya, Nigeria, Pakistan, Tanzania and Uganda.

Survey findings on the impact of COVID-19 on financial behavior show that while financial inclusion in Pakistan increased from 21 percent of adults pre-pandemic to 25 percent in late 2020, the change was driven entirely by mobile money adoption.

Mobile money account ownership by registered users increased from 9 percent of adults before COVID-19 to 16 percent in late 2020. The pandemic had no significant effect on bank account ownership compared to before COVID-19.

Most significantly, the pandemic caused the gender gap to narrow in 2020. While the gender gap remains an enormous barrier to financial inclusion and economic empowerment, the financial inclusion of women increased from 6 – 11 percent, which is a major occurrence considering the number hovered between 5-6 percent in multiple previous waves of the FII survey.