Redefining Insurance and Takaful Landscape in Pakistan
As the curtain falls on the Tribune podcast series in collaboration with EFU Hemayah Takaful, the final episode delivers a powerful and future-focused conversation with Mohammed Ali Ahmed, MD and CEO, EFU Life.
With nearly two decades at the company and a unique journey from middle management to the top, Mr. Ahmed offers an insider's view into not just EFU Life's transformation, but the broader evolution needed across Pakistan's insurance and Takaful landscape.
Mr. Ahmed begins with a sobering fact: 'Pakistan's insurance industry is currently ranked around the bottom three or four, and that's not a good position to be in. However, looking at the positive side, there's so much we can do with relatively little effort. This is where our industry has the chance to make a significant impact,' he said.
With a young population, untapped potential, and increasing awareness, the industry stands on the cusp of transformation. He credits regulatory support from SECP over the last decade, stating, 'I think the efforts that we have made as an industry, especially in the last 10 years, the regulator, SECP, has played a very positive role in a very proactive way, with a growth and development mindset, has been engaging with us.'
The core strategy driving EFU Life's recent growth is segmentation. Mr. Ahmed strongly believes the industry can no longer rely on one or two mass market products. 'Our focus has been on segmentation – not just in terms of age, but also socio-economic backgrounds. For example, high net worth individuals have very different needs from the middle class or those closer to the poverty line. By tailoring our products, we ensure that we reach as many potential customers as possible,' he explained.
'In the last few years, millions of Pakistanis have taken insurance for the first time. But to move the needle on insurance penetration, we need the entire industry to adopt innovative strategies. Technology is essential to this transformation. Without it, we cannot meet our goals,' he said. From AI in HR recruitment to AI-assisted underwriting and product development, Mr. Ahmed underlines how technology is not a future aspiration but a present-day necessity.
As the conversation turned toward Takaful, referring to KP and Balochistan, Mr. Ahmed said, 'Takaful will play a significant role in these regions.' With greater cultural resonance and trust, Takaful is poised to become a key pillar in expanding the reach of protection products to new geographies and communities.
'Our success as a company is tied to the success of the industry,' said Mr. Ahmed, encouraging collaborative growth and urging peers to adopt segmentation and tech strategies. His vision is not just for EFU Life to lead, but for Pakistan to become a case study in insurance innovation across emerging markets.
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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.
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Express Tribune
8 hours ago
- Express Tribune
Traders underline need for B2B exhibitions
The collaboration between Raast and Buna will help overseas Pakistanis in instantly sending remittances back home through the digital infrastructure, making cross-border transactions easy and convenient. PHOTO: FILE Listen to article The Hyderabad Chamber of Small Traders & Small Industry has advocated for organising dedicated business-to-business (B2B) exhibitions and road shows in Hyderabad, specifically for chemical and allied industries, as such initiatives will provide local manufacturers and traders with direct access to business opportunities and innovative technologies. A high-level delegation of HCSTSI, led by Vice President Shan Sehgal, participated in the Pakistan Chemical Expo 2025, organised at the Karachi Expo Centre. The delegation visited various stalls and held detailed meetings with representatives of leading national and international companies from chemical, packaging, waste management, energy and allied industrial sectors. These industry leaders expressed keen interest in collaborating with HCSTSI and showed their intention to visit Hyderabad and engage with the chamber in the near future. Speaking on the occasion, HCSTSI Vice President Shan Sehgal stated that international-standard events like the Pakistan Chemical Expo play a vital role in promoting industrial growth, fostering research and development activities, facilitating technology transfer and creating valuable business linkages. He emphasised that Hyderabad is the second-largest commercial hub of Sindh and home to thousands of active business units across sectors such as chemicals, pharmaceuticals, plastics, cold beverages, food processing and construction. "In light of this, such exhibitions are urgently needed to be organised in Hyderabad to support local industrial advancement." The chamber delegation briefed participating companies about the performance, facilities and investment potential in Hyderabad. They formally invited them to expand their networks and establish operations in the city. The chamber leadership praised the Pakistan Chemical Manufacturers Association and other organisers for arranging a successful and purposeful event and for providing a strong platform for meaningful industrial and commercial interaction.
Express Tribune
12 hours ago
- Express Tribune
Heavier gas burden
Listen to article As Pakistan's economic managers scramble to plug widening fiscal gaps and meet IMF benchmarks, the weight of their decisions continues to fall squarely on those least able to bear it. The latest move — a 50% increase in fixed charges on residential gas bills — is yet another blow to already struggling households. Without changing the per-unit gas tariff, the state has quietly increased the mandatory monthly cost of gas, turning an essential utility into a luxury for many. The decision, approved by the Economic Coordination Committee (ECC) of the Cabinet, will push fixed charges for protected domestic consumers from Rs400 to Rs600, regardless of how little gas they actually consume. This disproportionately penalises low-income households — the very segment these "protected" categories are meant to shield. Even those who use minimal gas to conserve energy will now see their bills swell, simply for staying connected to the grid. The timing of the decision — just days before the start of the new fiscal year — is also telling. It reflects the Finance Ministry's growing reliance on regressive measures to meet revenue targets in the face of mounting debt obligations. Furthermore, gas tariffs for non-residential consumers — including industries and power plants — have been increased by an average of 10%. While this may be aimed at rationalising subsidies and improving circular debt recovery, it risks compounding inflationary pressures and stifling industrial competitiveness. Yet, no clear roadmap has been presented for energy sector diversification or investment in sustainable alternatives. The lack of a progressive taxation model and repeated reliance on indirect levies do not show fiscal prudence and are making survival harder for ordinary Pakistanis. Austerity without accountability is not reform. And unless the state starts prioritising equity in its fiscal decisions, public trust will continue to deteriorate.
