Karachi
Karachi appears to be Pakistan's orphaned child. Once the country's capital, it now holds the dubious distinction of being among the most unliveable cities in the world.
Despite contributing over 20% to Pakistan's GDP and hosting around 10% of the nation's population, Karachi struggles significantly to complete critical projects like the BRT and K-4 water supply schemes. Videos highlighting its crumbling infrastructure became memes during the recent India-Pakistan clash, which speaks volumes.
For decades, Karachi has absorbed a continuous influx of migrants from various regions of Pakistan, expanding rapidly and without adequate planning, thus becoming a hub for crime and unrest. Despite these challenges, the city has remained Pakistan's economic backbone, functioning as the nation's industrial centre and sole significant link to the global supply chain for seven decades.
In short, Karachi has the potential to pull Pakistan out of its financial difficulties with minimal effort—provided it receives proper attention and prioritization. Instead, it consistently receives minimal support. Political parties routinely stage protests against the federal government for neglecting Karachi, yet minor changes.
Consider the energy sector, for instance. Karachi hosts the country's only privatized power utility, K-Electric (KE). According to recent communications, KE has become the most improved DISCO since 2009 regarding transmission and distribution losses, reducing its aggregated technical and commercial losses from a staggering 43.2% to approximately 20.3% by 2024. Within Karachi alone, the exempted feeder network increased dramatically from a mere 6.6% to 70%. These achievements, supported by a complete management turnaround, have gained global recognition, including a Harvard Business School case study and positive World Bank reports.
However, despite these notable improvements, KE faced significant setbacks, such as delays in the Multi-Year Tariff determination, hindering its financial planning. The private utility, intended as a model for other DISCO privatizations, was inexplicably left in limbo, ultimately punishing Karachi residents more than the company itself.
Another example is the denial of Fuel Cost Adjustment (FCA) relief—a substantial amount of Rs4.69 per unit—to KE's customers in a recent NEPRA hearing. The justification given was to maintain a uniform tariff across the country, exemplifying bureaucratic rigidity and the shortsighted decisions of temporary ministers.
Karachi is also burdened with inefficiencies from other DISCOs. For nearly two years, Karachi's consumers have borne the Power Holding Limited (PHL) surcharge—debt repayment they did not contribute to or benefit from. Now, due to a new banking agreement, this surcharge is extended for another six years, meaning 72 more months of inflated electricity bills for Karachi residents.
Even if the government manages to find buyers for its other DISCOs—a considerable challenge—the current treatment of KE sends a negative message. Potential buyers witnessing such hurdles and neglect may reconsider their interest, fearing similar treatment.
Karachi deserves better.
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Express Tribune
5 hours ago
- Express Tribune
Pakistan's financial inclusion test: a tap away but still out of reach?
It starts, often, with someone else's phone. A woman in a small town outside Lahore wants to send money to her son in Karachi, but she doesn't own a mobile wallet. Her brother does, so she asks him to do it. In Karachi, a fruit seller keeps a basic bank account, not to save, but because he needs it to receive welfare payments. He rarely logs in, never checks the balance himself, only his nephew knows how to use the app. Another elderly man is told he's been registered for something called Raast, but he still walks to the local shop every week to collect cash from his cousin. But sometimes, it starts with your own. A tailor in a two Tando Adam, near Hyderabad now takes digital payments through his mobile wallet, no more waiting for change, no more handwritten ledgers. A housemaid in Karachi uses Raast to send part of her salary home instantly, something that once meant hours in line at a branch she never felt comfortable entering. These are not outliers. They are the shape of inclusion in Pakistan today - present on paper, uneven in practice. In 2014, only 7% of Pakistani adults were financially included, meaning they had an account in their own name with a regulated institution. By 2024, that number has climbed to 35%, thanks mostly to mobile wallets and digital accounts that are easier to open than traditional bank accounts. At a glance, it looks like progress. And in many ways, it is. But access tells only part of the story. For millions, having an account doesn't mean using it. For women, especially, the barriers are deeper - fewer phones, fewer SIM cards, and even less confidence. For the poor, the excluded, the unbanked, formal finance still feels unfamiliar, too complicated, too distant, too risky. And for the system itself, the challenge now is not just to count accounts, but to build trust, relevance, and resilience. The numbers may have moved. But the ground beneath them hasn't shifted as much. A statistical shift Over the last ten years, Pakistan has seen more people brought into the financial system than in the decades before combined. The growth hasn't been slow or subtle, it's been sharp and sweeping. This shift is captured in the Karandaaz Financial Inclusion Survey (K-FIS) 2024, a national study that tracks how real people across Pakistan access, use, and trust financial services. Now in its ninth wave, the survey offers a decade-long view of what financial inclusion looks like on the ground, not just in policy terms, but in lived experience. In 2014, just 7% of adults had an account. Today, it's 35% — over one in three Pakistanis now has access to some form of regulated financial service, be it a bank account, a mobile wallet, or an account with a non-bank financial institution.. But the real story isn't just the overall growth. It's how that growth happened. Banks, which were once the main face of financial inclusion, have seen only a modest rise, from 8% in 2014 to 17% in 2024. In contrast, mobile money wallets have exploded, climbing from virtually zero to 30% in a decade. The shift has been particularly dramatic in the last two years alone, wallet registrations jumped from 19% in 2022 to 30% in 2024. This shift happened not in boardrooms, but in neighborhoods, on phones of riders, house staff, shopkeepers and home-based entrepreneurs. The ease of opening a mobile wallet, no branch visits, no intimidating paperwork, no waiting lines, meant millions once excluded could now touch the system. And then came Raast, the State Bank's instant payment system. In just two years, wallet registrations through Raast jumped from 17% to 41%. Among those using it, 77% cited speed, and 43% said it was more affordable than traditional transfer methods. Even bank registrations with Raast more than doubled, from 22% to 47%. But while access expanded, it didn't expand evenly. Punjab leads at 40%, followed by Islamabad (38%) and Gilgit-Baltistan (33%). Balochistan, AJK, and Sindh lag at 23–26%. These numbers aren't just statistics; they translate to millions of people who are either newly able to pay bills digitally or still standing in line at the local utility office. Urban areas, unsurprisingly, continue to outpace rural ones. Cities benefit from better telecom infrastructure, more agent networks, and greater mobile phone penetration. In villages and remote areas, access often depends on whether there's a mobile signal strong enough to open the app, or a shopkeeper willing to guide someone through a transaction. Even usage varies. K-FIS data shows that while 45% of adults say they've used a formal financial service at least once, only 33% are actively using their accounts, meaning they've made a transaction in the last 90 days. And fewer still are 'advanced users,' those comfortable with features beyond just cashing in or out. What this tells us is simple - access has grown, but depth of use still lags. People are opening accounts. But not everyone is using them. Not regularly. Not confidently. Not yet. Bridging the trust gap In Pakistan, access to financial services has expanded dramatically, but confidence in the system hasn't always kept pace. Despite easier account opening, mobile onboarding, and branchless banking, many people still prefer the comfort of what they know, informal borrowing, physical cash, and financial arrangements within families or communities. This isn't just anecdotal, 85% of borrowers still rely on informal sources. It's a powerful reminder - inclusion on paper isn't always inclusion in practice. For Muneer Kamal, CEO and Secretary General of the Pakistan Banks' Association (PBA), this is where the next chapter of financial inclusion must begin. 'Pakistan has made significant strides in advancing financial inclusion,' he acknowledges. 'But longstanding structural challenges persist, hindering further progress.' Among those challenges is the staggering amount of money still operating outside the formal economy. 'Currency in circulation is estimated at over Rs9.4 trillion in 2025, nearly 26 to 27% of the overall economy,' Kamal points out. The dominance of cash weakens formal systems and makes the shift to digital usage even more difficult. Documentation requirements are another obstacle. 'A large portion of the adult population lacks verifiable income proof, tax records, or formal employment history,' he explains. 'This makes them ineligible for loans or other lending products.' The result - a growing segment with accounts in hand but no real access to the tools that build financial resilience. But instead of seeing these as dead ends, banks are treating them as starting points. 'PBA member banks are adopting a multi-pronged strategy,' Kamal says, 'To further improve trust in formal banking, particularly across underserved and remote communities.' The first part of that strategy is simplified access, cutting down friction through digital onboarding, branchless banking, and partnerships with Electronic Money Institutions (EMIs). People can now open accounts using only a phone, without visiting a branch. Yet real change, Kamal notes, also comes from physical presence. Banks are reaching out through mobile vans to low-access districts and establishing women-led branches staffed by female 'champions' who offer both services and reassurance. These efforts are supplemented by the National Financial Literacy Program (NFLP), where banks conduct in-person community sessions to raise awareness and comfort around digital tools. 'In line with SBP guidelines, banks have collectively strengthened their complaint resolution processes, improved transparency, and enhanced customer communications to build user confidence,' Kamal adds. This work extends to the design of financial products themselves. The days of one-size-fits-all banking are giving way to customized offerings for youth, rural workers, gig economy participants, and women entrepreneurs. Kamal believes such relevance is non-negotiable, 'Banks are tailoring their offerings to ensure that financial solutions are not only accessible but also meaningful.' Still, innovation is not always seamless. Kamal points out that, 'Regulatory complexity continues to slow innovation and inclusion. Although Pakistan's framework has improved, challenges persist, especially for fintechs and non-traditional service providers.' What's needed, he says, is 'A more enabling framework, one that ensures robust cybersecurity while simplifying compliance.' And at the center of it all lies data, or the lack of a connected digital ecosystem. 'There are various disjointed data repositories, from NADRA to the banking sector, to telcos and power consumers,' he explains. 'But this data is not accessible via a common platform, which is a starting point for promoting digital lending, the most powerful tool to harness financial inclusion in Pakistan.' Gendered exclusion She may have a CNIC, a smartphone, and sometimes even an account, but when it comes to full participation in Pakistan's financial system, the average woman is still standing at the edge, waiting to be invited in. According to K-FIS 2024, the gender gap in financial inclusion remains stark. Only 25% of women in Pakistan are financially included, compared to 49% of men. And while 81% of men have a bank account, that number drops to just 47% for women, underscoring a 34% gap in gender-based financial inclusion. Often, even those accounts are not truly theirs to control. Many are opened under pressure, or operated by husbands or brothers, leaving women technically included, but not in control. This disconnect between access and agency is precisely what banks are starting to tackle, especially those offering Shariah-compliant services. For BankIslami, the solution lies not just in offering Islamic banking, but in designing it for her from the ground up. 'The Mashal Banking initiative by BankIslami is specifically designed to cater to the unique needs of the female population of Pakistan, from all walks of life,' says Sohail Sikandar, Chief Operations Officer. 'While every product offered by the bank is relevant for female customers, these particular products have been curated through a gender-lens analysis to address the financial needs of women.' The idea is simple, make finance feel safe, simple, and tailored, values that resonate with women across income brackets, particularly those stepping into formal banking for the first time. But the bank didn't stop at products. They wanted the experience to reflect the change too. 'Earlier this year, we launched its first fully women-managed branch in Karachi to promote gender equality in the workplace,' Sikandar shares. 'The branch, operated entirely by female employees, is an initiative aimed at empowering women as both professionals and customers in Pakistan's financial sector.' Interestingly, this tailored approach is unfolding alongside a much larger shift - the rise of Islamic digital banking. And according to Sikandar, it's outpacing conventional banking models in more ways than one. 'The growth of Islamic digital banking is driven by two key factors - the overall expansion of digital banking and the increasing adoption of Islamic banking,' Sikandar explains. As of now, mobile banking app users in Pakistan have reached 21 million, while branchless banking wallet users total 64.3 million, and e-money users stand at 4.7 million, all showing steady year-on-year growth. What's pushing this forward is not just user preference, but also policy direction. 'The State Bank of Pakistan's goal to convert conventional banks to Islamic banking by 2027 has further accelerated the sector's expansion.' That makes the convergence of Shariah-compliant finance and digital platforms a powerful catalyst, especially for reaching women who want faith-aligned, secure, and convenient financial services. 'As a result, the integration of digital technology with Islamic banking is bound to surpass conventional banking models in both usage and adoption. With expanding digital infrastructure and growing consumer awareness, Islamic digital banking is set to become the new standard, offering ethical and accessible financial solutions to a broader population,' Sikandar adds. Fast, cheap, connected A few years ago, sending money in Pakistan meant choosing between a queue at the bank or a trip to a money transfer agent. Today, a growing number of Pakistanis are using their phones to transfer funds within seconds, thanks largely to the rise of Raast. According to K-FIS 2024, the share of adults making digital transactions has grown by 11 percentage points in the past three years, driven by higher smartphone penetration and simplified user journeys. But the question remains, has Raast become the great equalizer? Or is it still finding its feet among the underserved? The banking sector believes the potential is just beginning to unfold, and the PBA has been right at the center of this transition. 'PBA has played a central role in facilitating and coordinating the industry-wide adoption of Raast,' says CEO and Secretary General, Kamal. The efforts, he explains, cut across policy, operations, and public engagement. 'PBA has worked closely with SBP to ensure member banks are aligned on timelines, interoperability standards, and incentives. Through subcommittees and bilateral dialogues, PBA has coordinated responses to integration challenges.' But the work hasn't stopped at backend systems. Changing habits requires awareness, especially among those who are newer to formal banking. Kamal shares that, banks continue to roll out informational campaigns to promote Raast's use for everyday transactions, salaries, and government payments, especially for women and small businesses. PBA also monitors wallet usage and advocates for use-case expansion beyond just person-to-person transfers. From access to readiness Having a bank account is one thing. Knowing how, and why, to use it is another. In Pakistan, financial inclusion often stalls at the point of access. People may have accounts, but many are left inactive. While over 64% of adults now hold bank deposit accounts (SBP, 2024), Kamal notes that, 'The quality of inclusion remains low. In fact, more than half, 54 million deposit accounts, hold less than Rs5,000, underscoring low savings capacity and even lower activity.' They prefer borrowing from family or saving in cash, not necessarily because banks are out of reach, but because they don't always feel right. According to K-FIS 2024, 85% of borrowers still rely on informal sources, and over half of the country's deposit accounts sit idle with minimal balances. The trust deficit is real, especially when banking feels like it conflicts with religious values. That's where Islamic finance has a unique role. 'Globally, Islamic finance is recognized as a well-suited, Shariah-compliant alternative to conventional banking,' says Sohail Sikandar. 'This model eliminates Riba (interest) and operates on a profit- and risk-sharing structure, ensuring that financial services align with the religious values and needs of the population, especially in trust-deficient environments like Pakistan.' Trust is further built through Musharakah, the principle of partnership. 'The concept of partnership (Musharakah) plays a key role in fostering trust through risk-sharing, which is essential for promoting financial inclusion.' From numbers to meaning For years, financial inclusion in Pakistan was measured by one thing - how many people had an account. But the more meaningful question is how many people feel financially included, who not only have access, but use it, understand it, and feel it works for them. The K-FIS 2024 makes this distinction visible. Just 35% of Pakistanis say they feel included in the financial system. Among women, that number falls to 14%. For Kamal, CEO, PBA, these gaps are not just statistical, they are directional. 'This distinction highlights the need to build not just financial access but financial agency,' he says. 'To meet the National Financial Inclusion Strategy (NFIS) targets by 2028, both policy and market interventions must now shift focus from merely expanding access to enabling meaningful usage, financial empowerment, and inclusive credit access.' What might that shift look like? Kamal outlines a roadmap, not in slogans, but in systems. 'Simplify lending eligibility by utilising alternative credit scoring models that incorporate mobile usage, utility bills, and transaction data,' Kamal shares. In a country where large segments of the population operate outside formal employment or tax systems, rethinking creditworthiness is essential. Traditional requirements often exclude the very people inclusion is meant to serve. Then there's the matter of access friction. 'Enable national eKYC and interoperability to reduce documentation friction and account dormancy,' Kamal adds, pointing to the fatigue users experience when navigating siloed platforms and redundant verifications. The challenge isn't just onboarding, it's engagement. PBA believes financial literacy, especially at the grassroots, is the missing link. 'Scaling digital and financial literacy, especially through public-private campaigns targeting women, youth, and rural areas,' Kamal explains, is the only way to convert passive access into active empowerment. And finally, incentives - rewards for action, not just sign-up stats. 'Incentivise usage, not just account opening, through cashback schemes, subsidised Raast-linked payments, or saving bonuses,' he says. It's a shift from counting accounts to creating capacity. Because inclusion is not just about who holds an account, it's about who feels they can hold their ground, make decisions, and shape their financial future. And that, as this decade of data shows, is a far more meaningful metric. For a woman with a phone in her hand, or a tailor with his first digital wallet, inclusion isn't just about being counted. It's about being seen, and served, by the system built in their name.
Express Tribune
6 hours ago
- Express Tribune
South Punjab to get e-buses on priority
Punjab Chief Minister Maryam Nawaz inspects a ramp for differently-abled passengers in an electric bus which is set to ply on the roads in Lahore. photo: express Punjab Chief Minister Maryam Nawaz Sharif has ordered the provision of more electric buses for the districts in South Punjab. Chairing a meeting in which the transport department briefed her on its projects and the progress made on the electric bus project was reviewed, the chief minister said the remote areas should be given priority in the provision of electric buses. She emphasised, "The culture of always giving every new facility to big cities must be changed. We will bring rural areas at par with the major cities." She ordered that 240 electric buses should be given on a priority basis to 24 districts. In the first phase, the 240 e-buses will be provided to relatively underdeveloped districts. Between August and October, 500 e-buses will be provided for Lahore, Faisalabad, Bahawalpur, Multan and Rawalpindi. From November to December, 600 additional electric buses will arrive in Punjab. The chief minister highlighted, "Under the Punjab Clean Air Programme, 400 electric buses will be provided to Sheikhupura, Nankana Sahib, Kasur and Lahore." A detailed review was conducted of the Gujranwala Bus Rapid Transit project. In order to connect the entire city and suburban areas, 80 feeder buses will be launched. On the 22km-long BRT system from Rahwali to Eminabad, 28 stations will be established. A proposal to extend the Gujranwala BRT route was also reviewed. The BRT system will provide two-way transportation after every eight minutes. Chief Minister Maryam Nawaz Sharif issued directives that traffic along the Gujranwala BRT route should be managed through a smart traffic control solution. For this project, four electric bus depots will be established in Gujranwala. In the meeting, progress on the Orange Line and Red Line transport systems in Faisalabad was also reviewed. The Red Line will be 23.4km long, with 24 stations, and is expected to transport more than 185,000 passengers daily. The Orange Line will be 29km long, with 21 stations, and is expected to transport over 111,000 passengers daily. On the chief minister's instruction, the route from the FIEDMC to Salami Chowk has been included in the project. The chief minister directed the transport department to immediately start all public welfare projects, and said the e-bus routes should be determined while keeping in view the public commuting needs.
Express Tribune
8 hours ago
- Express Tribune
Karachi slams attempt to block FCA relief
Listen to article Karachi-based industrialists and consumers have voiced serious concerns over the Power Division's interference in blocking relief and rescheduling K-Electric's (KE) hearing. Various stakeholders have approached the national power regulator, National Electric Power Regulatory Authority (NEPRA), urging it to reject the Power Division's request to deny Rs7.173 billion (Rs4.69/kWh) in Fuel Charges Adjustment (FCA) relief for April 2025 to KE consumers. They have also expressed serious concerns over the rescheduling of KE's hearing. Prominent Karachi-based energy expert and intervener Arif Balwani has written a letter to the power regulator opposing the Power Division's last-minute request to defer the FCA hearing for K-Electric. The hearing, originally scheduled for June 19, 2025, was rescheduled to June 23, 2025. NEPRA has now fixed June 30, 2025, for the next hearing. "It must be stated unequivocally that the FCA mechanism is a statutory and formula-based process under the NEPRA Tariff (Standards and Procedure) Rules, 1998. It is not a petition, nor does it entail discretionary regulatory indulgence warranting intervention," Balwani stated, adding that the authority's notice — consistent with past practice and law — rightly invited "interested/affected parties to submit written/oral comments as permissible under the law." He said that the notice did not — and could not — invite any intervention, which is governed by specific provisions and procedures applicable to tariff petitions or licensing matters under the NEPRA Act and relevant regulations. "The belated oral objection raised by the Power Division (PD) — during the hearing itself and without prior written noticeis procedurally improper, contrary to principles of natural justice, and has no basis in the NEPRA Act (XL of 1997), the NEPRA Tariff Rules, or any codified regulation," he said, adding that there is no statutory provision empowering the authority to suspend or defer a lawfully convened FCA hearing at the unilateral behest of an executive division lacking any regulatory jurisdiction. He further added that the PD's contention regarding the reference fuel price of Rs15.9947/kWh — derived from the previous Multi-Year Tariff (MYT) 2016-2023 — has been repeatedly used for interim FCA determinations without objection. The Power Division has acquiesced to the continued application of this reference benchmark for several months post-MYT expiry. It cannot now be permitted to challenge its validity retroactively without citing any contrary provision of law or proposing an alternative interim methodology. More critically, the Additional Secretary of the Power Division admitted on record that the request for deferral was not backed by any formal decision of the federal government, cabinet, or Economic Coordination Committee (ECC). Balwani said this renders the request ultra vires, lacking both authority and democratic legitimacy. The absence of any Cabinet directive further underscores that this initiative is an unauthorised executive overreach attempting to influence the statutory functions of an independent regulatorcontrary to the separation of powers enshrined in the Constitution. He said the Power Division's further assertionthat the negative FCA should not be passed on to KE consumers due to International Monetary Fund (IMF) programme constraintsis not only irrelevant in the context of regulatory law but also unsupported by any statutory or contractual obligation.
