Queen Maxima’s Pak visit aims at boosting financial services

ISLAMABAD: Queen Máxima of the Netherlands on Tuesday arrived in Pakistan on a three-day visit in her role as the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA).

She is visiting Pakistan in support of the implementation of the National Financial Inclusion Strategy. Pakistan launched this strategy in May 2015, in order to increase access to and usage of financial services by all Pakistanis, including those who traditionally marginalised in the formal financial system.

As the Special Advocate, Queen Máxima leads a global effort to advocate for financial inclusion for the most marginalised. Throughout her mission she will encourage the government to develop a favourable environment for digital financial services (including reviewing Nadra fee structures for verification) and promote access to financing for micro, small and medium enterprises in both rural and urban areas. She will also urge officials to close the gender gap in financial inclusion.

“Financial inclusion gives people the means to access savings, insurance and credit facilities to improve their own and their children’s lives,” said the United Nations Resident Coordinator, Humanitarian Coordinator and UNDP Resident Representative in Pakistan, Neil Buhne. “Ensuring even the poorest people can access financial tools is an essential foundation for achieving the Sustainable Development Goals in Pakistan,” he added.

Pakistan faces significant challenges when it comes to financial inclusion. Despite a strong regulatory foundation, the percentage of Pakistanis with some kind of formal financial account remains very low, and financial access for women lags particularly.

Micro, small and medium enterprises contribute significantly to the national economy, but many are also excluded from the financial system. Over 90 percent of businesses in Pakistan falls into this category, yet less than four percent of small and medium enterprises borrow from banks in Pakistan, with the share of credit going to these businesses dropping significantly in recent years. Microfinance also has low penetration in Pakistan, despite immense potential: only 17 percent of potential micro-credit clients are presently being served.