Latest news with #KarandaazFinancialInclusionSurvey
Business Recorder
05-07-2025
- Business
- Business Recorder
Bridging the financial gap: insights from Karandaaz Financial Inclusion Survey (K-FIS)—I
While health and education have traditionally dominated the human development and public policy agenda globally, financial inclusion has increasingly emerged as a critical development goal over the past decade and a half. The rationale is straightforward: by integrating the underbanked, underserved, and financially excluded populations into the formal financial system, economies can become more resilient and inclusive. Access to financial services – such as bank accounts, credit, savings, and insurance – empowers individuals and simultaneously expands the formal economy, enhancing government capacity to raise revenue and deliver essential public goods and services. In Pakistan, financial inclusion remains low when measured as the percentage of working-age individuals (15+) who own a bank account. According to the Karandaaz Financial Inclusion Survey (K-FIS) 2024, only 35 percent of Pakistani adults are financially included. Although this marks a 3.5-fold increase since the World Bank's inaugural Findex Survey in 2011, when the figure stood at 10 percent, Pakistan still trails its regional peers. As of 2021, financial inclusion stood at 77.5 percent in India, 54 percent in Nepal, 89.3 percent in Sri Lanka, and 52.8 percent in Bangladesh. The South Asian average was 67.9 percent. Digging deeper into the 2024 K-FIS findings reveals significant disparities within Pakistani society. One of the most glaring is the gender gap. Only 14 percent of women are financially included, compared to 56 percent of men. While limited financial literacy plays a role (as confirmed by the data), deeper structural factors also contribute. Women's limited agency in household decision-making is a critical issue: only 11 percent of women report having a say in financial matters, whether it's saving, purchasing assets like livestock, or deciding on household consumption. Digital literacy is another barrier, with men scoring 65 versus women's 48 on self-reported ability to use mobile phones, send texts, and navigate social media platforms. The survey underscores that financial exclusion for women is not just a matter of access, but also of societal norms and intra-household dynamics. Ali Akbar Ghanghro (Senior Manager Research & Insights, Karandaaz Pakistan) Copyright Business Recorder, 2025
Express Tribune
29-06-2025
- Business
- 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.
Business Recorder
21-06-2025
- Business
- Business Recorder
Unbanked and unseen
EDITORIAL: It should be unthinkable that in 2025, just 14 percent of women in Pakistan are financially included. Yet here we are — well into the third decade of the 21st century — still contending with the reality that half the population remains largely excluded from the financial system. The data, drawn from the latest Karandaaz Financial Inclusion Survey, paints a grim picture. Financial inclusion among men has risen to 56 percent, but women lag far behind, stuck at 14 percent. No other indicator captures the scale of economic exclusion quite as clearly. This is not a marginal development problem. It is a foundational crisis. Countries that aim to grow sustainably, distribute wealth more evenly, and improve human development outcomes cannot afford to operate financial systems that serve only one gender. Yet Pakistan's formal economy continues to overlook and underestimate women. The fact that mobile wallet use has expanded to 48 percent of men but only 11 percent of women confirms the depth of the divide. Even where digital solutions have made formal banking more accessible, women are still being left behind. This isn't about technology access alone. It is about structural neglect. From mobile ownership to SIM registration, from literacy to household permission, every link in the chain is broken for women. And the state does not appear in any hurry to fix it. It is stunning that even now, there is no serious national strategy to address the gender gap in financial access. Not even in the country's digital finance policy documents is there a plan robust enough to deal with the fact that millions of women remain unbanked, under-resourced, and financially invisible. The regional disparities are equally shocking. In Balochistan, just 4 percent of women are financially included. In Azad Jammu & Kashmir, only 1 percent. These are not statistics that reflect slow progress — they reflect active failure. Even in Islamabad, where infrastructure and access are significantly better, female inclusion stands at just 38 percent, far below any reasonable benchmark. There is no justification for this scale of exclusion, especially when mobile wallets and simplified banking services are available. Technology is often cited as one of the great equalisers, but only when access is universal. And in Pakistan, it simply isn't. Just 46 percent of women own mobile phones, compared to over 80 percent of men. Even fewer women have SIMs registered in their own names. Without secure access to personal digital tools, mobile-based financial solutions can't reach their intended users. These are known barriers, and yet policy action has been slow, fragmented, and reactive at best. There are ways forward, but they require seriousness. Government programmes like the Benazir Income Support Programme could be expanded to serve as on-ramps for broader financial inclusion. Mobile operators can be incentivised to register SIMs in women's names more easily and securely. Banks can design simplified, low-cost accounts tailored for first-time female users. Civil society can support literacy and awareness campaigns, especially in rural districts. None of these ideas are new. What is missing is the political will to act on them at scale. This is not a women's issue — it is a national development issue. Countries that empower their women economically see gains in household savings, education, health outcomes, and GDP growth. Countries that exclude them face stagnation and widening inequality. Pakistan cannot afford to choose the latter path. Financial inclusion is not charity. It is not a development project to tick off in reports. It is the foundation of economic participation and empowerment. And right now, too many Pakistani women are locked out of that foundation. If this continues, the cost won't just be borne by them — it will be borne by the entire country. Copyright Business Recorder, 2025
Business Recorder
19-06-2025
- Business
- Business Recorder
Karandaaz Financial Inclusion Survey released
KARACHI: Karandaaz Pakistan has released the 2024 edition of the Karandaaz Financial Inclusion Survey (K-FIS), marking a decade of demand-side financial data and providing a powerful roadmap for advancing inclusive finance in Pakistan. K-FIS continues to be the only nationally representative demand side survey that captures people's real financial experiences across gender, geography, and income segments. The 2024 findings reveal a significant leap in financial inclusion, which has increased fourfold, from just 8 percent in 2013 to 35 percent in 2024. This growth is primarily driven by the rise of mobile money, now used by 30 percent of adults, up from less than 1 percent ten years ago. While this progress is encouraging, the report highlights persistent gaps in usage, trust, and equity. Only 14 percent of women report owning a full-service financial account, compared to 56 percent of men. Women's access to mobile phones also remains limited, with only 46 percent ownership compared to 82 percent for men, limiting their ability to avail digital financial services. Geographic disparities persist as well. Punjab (40 percent), Islamabad (38 percent), and Gilgit-Baltistan (33 percent) have made significant strides in inclusion, whereas Balochistan (23 percent) and Azad Jammu & Kashmir (25 percent) continue to lag behind. The adoption of the government-backed RAAST payment system shows promise, with wallet registrations more than doubling from 17 percent to 41 percent in the last two years. Users cited speed (77 percent) and affordability (43 percent) as the main advantages. Addressing the webinar for the launchof report, Waqas ul Hasan, CEO Karandaaz, has said as the K-FIS results reveal, there is a persistent and troubling gender divide. 'Today, 56 percent of adult men in Pakistan have a registered financial account, compared to just 14 percent of women,' he added. He said that Karandaaz envisions a Pakistan where these divides no longer exist and where every individual, regardless of gender, has the tools to participate fully in the formal economy. 'We believe that inclusion is not a one-time achievement, but a continuous journey, and that data, like the one we share today, must guide us,' he added. Despite this progress, formal financial services remain underutilised. A striking 85 percent of adults continue to rely on informal sources — mainly family and friends—for credit. Meanwhile, trust remains a critical barrier: only 9 percent of excluded adults say they trust banks, and just 8 percent trust mobile money providers. Only 36 percent feel comfortable using any financial service. During the keynote address, Syed Samar Hasnain, Executive Director Digital Financial Services, State Bank of Pakistan (SBP), stressed on the significance of demand-side surveys, commenting, datasets are collected regularly on the supply side, from the perspective of financial institutions. However, data collection efforts on the demand side, from the perspective of households and individuals, are limited. Nonetheless, individual level surveys are essential to get invaluable insights regarding financial behavior, he added. The webinar for the launch also featured two important panel discussions. The first one, titled 'From Growth to Gaps – Who's Included, Who's Left Behind: The Next Horizon in Financial Inclusion?,' was moderated by Stephen Rasmussen, former CEO of CGAP, with an expert panel consisting of Jahanzeb Khan, CEO, easypaisa Digital Bank; Mehr Shah, Head of Research, Raqami Islamic Digital Bank; and Umair Ahmad, Senior Joint Director, Agricultural Credit & Financial Inclusion Department, State Bank of Pakistan. The second panel, titled 'Closing the Gender Gap in Financial Inclusion and Building Financial Resilience within Communities,' was moderated by Ali Akbar Ghanghro, Senior Manager, Research & Insights, Karandaaz Pakistan. The panel featured Patrick Reily, Founding Partner, Uplinq Technologies; Hussam Razi, Associate Director, Innovations for Poverty Action; Halima Iqbal, CEO, Oraan; and Nageen Akhtar, Head of Innovation, Bank Alfalah. Copyright Business Recorder, 2025
Express Tribune
19-06-2025
- Business
- Express Tribune
Financial inclusion surges, gaps persist
Listen to article Financial inclusion in Pakistan has quadrupled in a decade, rising from just 8% in 2013 to 35% in 2024, according to the latest Karandaaz Financial Inclusion Survey (K-FIS). This growth is largely attributed to mobile money usage, which now reaches 30% of adults, up from under 1% ten years ago. Karandaaz Pakistan released the 2024 K-FIS, marking ten years of demand-side financial data and offering insights for advancing inclusive finance in the country. Despite notable gains, gaps in access, trust, and equity remain. Only 14% of women report owning a full-service financial account, compared to 56% of men. Mobile phone ownership among women stands at 46%, significantly lower than 82% for men, limiting access to digital financial services. Geographic disparities also persist. Punjab leads with 40% financial inclusion, followed by Islamabad (38%) and Gilgit-Baltistan (33%). Balochistan (23%) and Azad Jammu & Kashmir (25%) trail behind. Adoption of the government-backed RAAST payment system has risen sharply. Wallet registrations have more than doubled from 17% to 41% in two years. Users cited speed (77%) and affordability (43%) as key benefits. Waqasul Hasan, CEO of Karandaaz, said, "As the K-FIS results reveal, there is a persistent and troubling gender divide. Today, 56% of adult men in Pakistan have a registered financial account, compared to just 14% of women." He added, "Karandaaz envisions a Pakistan where these divides no longer exist and where every individual, regardless of gender, has the tools to participate fully in the formal economy. Inclusion is not a one-time achievement, but is a continuous journey, and data must guide us." Despite this progress, formal financial services remain underutilised. A striking 85% of adults continue to rely on informal sources — mainly family and friends — for credit. Meanwhile, trust remains a critical barrier: only 9% of excluded adults say they trust banks and just 8% trust mobile money providers.
