Financial inclusion

  1. Access to financial services, though still low compared to other South-Eastern Asian countries, has significantly increased in Pakistan since 2008, with 16% of the population now having access to bank accounts (including mobile wallets) and 23% access to financial services offered by formal financial intermediaries (including providers of mobile money services), compared to 11% and 12% in 2008, respectively:

    Population Banked: 2008: 11%     2015: 16%

    Use formal financial services: 2008: 12%     2015: 23%

  2. Women have advanced remarkably in terms of financial inclusion, even though they are still lagging considerably behind men.

  3. Financial inclusion increased in all regions of Pakistan, except in KPK.

  4. Unskilled labourers, housewives and students are the least formally included and also the least financially included.

  5. The persons whose main income source is "pocket money" and whose main occupation is "housewife" are not significantly less informed about financial services than the overall population. This suggests that the lesser use of formal financial services by women (90% of whom are occupied as "housewives") compared to men is not primarily due to lack of knowledge and understanding; under average participation in economic life by women must be seen as a major reason for their lower degree of financial inclusion.

  6. Using a regression analysis on the data collected, it was found that:

    • Whereas living in Balochistan and KPK or being occupied as housewife or student are decreasing the odds of being financially included, being formally employed and having a higher education level are increasing them;

    • The same factors have a significant impact on the chances to be formally served, whereby a young age (under 30 years) reduces the chances of being formally served, albeit with a relatively small impact;

    • Age works even more positively towards the chances of being formally served versus informally served; focusing on the young population thus represents an opportunity for the finance industry;

    • Living in a rural area does not significantly reduces the changes of someone to be financially included but it does reduce the chances of using formal financial services; the distance to formal service providers, though greatly reduced by the spread of mobile money services, is still an obstacle;

    • Financial literacy has shown a consistent positive impact on both the use of formal and of informal financial services, which makes it a great candidate for being the focus of future developmental efforts in the area of financial inclusion;

    • Unlike for formal financial services, education, income, age and gender does not improve a person's odds of using informal financial services versus being financially excluded. This can be interpreted as an indicator for the much greater ability of informal financial services to adapt to the capabilities and needs of the larger portion of the population and, reversely, as the still limited ability of the formal sector to do so as a whole, despite the rapid growth of the microfinance industry.


  1. The Pakistani context is marked by an overwhelming dominance of cash payments; accordingly, bank accounts are not considered as a  must have.

    • 95% of the respondents receiving any form of income declared they received this income in cash only;

    • 86% of respondents agree with the statement "when paying for goods or services, it is better to do it face-to-face so as to be certain that the money has been received";

    • In this context, it is not surprising that an important reason for not having bank accounts is that they are not perceived as meeting needs and that 72% of the population agrees with the statement "I can easily live my life without having a bank account".

  2. People perceive a fair degree of uncertainty in their environment and are anxious to put money aside for expected and unexpected events. Theft is more often viewed as a risk than was the case in 2008.

  3. Overall, the Pakistani population appears slightly more conservative than innovative with regard to financial matters. Nonetheless, it is open to useful innovations and strategies.

Bank accounts

  1. Urban men aged 30 or over, holders of at least an intermediate degree, salaried or self-employed workers in the non-farming sector and earning PKR 10,000 or more per month are significantly more likely to be bank account owners.

  2. The prime reasons for opening a bank account are to save money and/or to receive payments from an employer. Bank accounts are relatively rarely opened to receive personal or business loans or to pay bills. Earning a profit (interest or profit sharing) is also a rare motivation.

  3. Only 8% of non-bank account owners declared that they would find it useful to have a bank account compared to 38% in 2008. Only 1% of the non-account holders declared they have attempted to open a bank account during the past 12 months.


13.    Whereas most deposits are made at the counter in cash, ATMs are frequently used to withdraw cash.

14.    55% of the bank users see disadvantages when they use their account to deposit or withdraw money. Slow service and long queuing is the main drawback, followed by distance and inconvenient opening hours.


Mobile accounts

  1. Making P2P money transfers is the main reason why mobile account owners registered. But putting money in a safe place is also a strong motivation.

  2. Most owners of mobile accounts registered upon receiving information from family or friends or after having used someone else's MA before registering.

  3. As is the case for the choice of banks, the ease of doing business is a key factor when choosing a mobile account operator. But reputation plays a more important role than in the case of banks!

  4. Mobile accounts, though a fast growing service in Pakistan, are still rare; only 1.3% of all respondents declared they own mobile accounts; Mobile account owners are predominantly young and belong to the middle and higher income earning bracket.


19.    But a potential market for mobile phone-based financial services does seem to exist in Pakistan: action is required on the supply side, to develop mobile account applications that are attractive to a larger portion of the population, from the use and the cost points of view, and to inform the public about these offers.


  1. As in 2008, a large majority of Pakistanis put money aside, predominantly to cope with unexpected events (especially in KPK), seldom for long term purposes. But only 12% of the population uses formal savings vehicles (banks, mobile accounts, public savings schemes) to put money aside. As in 2008, keeping money at home is the favourite method of putting money aside.

  2. Compared to 2008, a major shift has occurred in terms of the reasons why people put money or goods aside: in 2015, the insurance function of savings ("to provide for the family in case something happens to oneself") has greatly augmented. This change in savings motives might reflect a greater sense of risk than was the case in 2008. The main criteria for the choice of savings vehicles are cheapness, safety and trust.

  3. Formal insurance products continue to play a marginal role in Pakistan: less than 2% of the population currently subscribe to one or several formal insurance products, about the same proportion as in 2008.


23.    As is the case for savings and investments, the majority of the population rely on "home-made" solutions to cope with risks: money kept at home, borrowed from informal sources, or invested in goods.

24.    Information is obviously the key to development of the insurance market in Pakistan: more than one third of all respondents declare to "not understand at all" regarding insurance products. The main risks perceived by people are unforeseen medical expenses, theft, and death of a family member. 20% of the population do not perceive any risk. Provided that the supporting infrastructure is in place, medical insurance is a major potential market.



  1. Borrowing is not popular and also relatively seldom used: Three quarters of the population declared they have no current formal or informal loans. As much as 81% of the non-borrowers believe that they will not borrow money in the next two or three years. Women are more excluded from the lending system than men.

  2. Retailers or shopkeepers are by far the main credit providers in Pakistan still, by granting very small loans to cope with occasional liquidity shortages and also larger loans. Borrowing from formal sources remains marginal.

  3. The amounts borrowed are under 50,000 Rupees in almost 80% of the cases.

  4. Respondents stating that they would be interested in borrowing from a formal financial institution are primarily interested in loans for agriculture and to start a new business.

  5. Voluntary reasons appear to play an important role in the suboptimal distribution of credit. In this context it is plausible that there is a potentially high demand for Islamic credit products.

Transfers (P2P)

  1. As in 2008, only a small proportion of the Pakistani population (about 5%) sends or receives money transfers from other persons.

  2. A pattern of flows from cities to rural zones does not emerge. Urban areas are the main beneficiaries of domestic P2P transfers, and also the main origins of these transfers.

  3. The districts of Multan, Muzaffargarh, Lohdran, D G Khan, Okara, Karachi and Khane Wal are the main originators of domestic P2P transfers.

  4. Most P2P transfers are initiated at least once a month or at least once every 3 months. In most cases, however, amounts up to PKR 5,000 are involved in each transaction.

  5. Mobile money via the MNO's or bank's agents is the most frequently used method after hand delivery; OTC operations at agents have replaced the services that were offered by the Post Office.

  6. Nonetheless, a significant proportion of the senders and receivers consider branchless banking channels as potentially unreliable and almost a quarter of the beneficiaries have had difficulties with unfriendly or unhelpful staff at the agents.

  7. Mobile accounts, mobile money agents and money transfer companies (such as Money Gram) are not known by 30% or more of those who do not use formal money transfer services.


37.    Mobile money can be further promoted by informing the public of the issue of trust and knowledge on how the service works:

The three main reasons for not using formal financial services to make domestic P2P transfers by those
who have heard about these services (the percentages in brackets indicate the frequency of responses)

First name I II III
Banks Lack of knowledge and/or understanding of the service (36%) Service does not match needs (26%) Too expensive (15%)
m-money (OTC) Lack of knowledge and/or understanding of the service (31%) Lack of trust (21%) Service does not match needs (12%)
m-money (MW) Lack of trust (29%) Point of service too far away (19%) Lack of knowledge and/or understanding of the service (18%)
Post Office Lack of knowledge and/or understanding of the service (30%) Service does not match needs (17%) Does not feel at ease with service provider (10%)


Service does not match needs (33%) Lack of knowledge and/or understanding of the service (18%) Lack of trust (11%)


  1. Pakistan's economy is heavily based on cash payments: 80% or more of organizations payments to people are made in cash.

  2. Payments made by persons to organizations went mostly to utility companies, followed by schools and universities, retailers, and providers of health services. 95% of the P2B payments were made by delivering cash or checks; only 8% were via mobile (OTC) services.

  3. Progress is noticeable: users of formal payment channels are more frequently found in rural areas due to the spread of branchless banking services, i.e. OTC at agents.