The Karandaaz Financial Inclusion Survey (K-FIS) 2022 reports a remarkable increase in the levels of financial inclusion in Pakistan. According to the survey, 30% of Pakistani adults are estimated to be financially included, which is a significant increase from previous years. This increase in financial inclusion is largely attributed to the substantial increase in the adoption of mobile money wallets, which has especially picked up in the aftermath of COVID-19. In fact, the level of mobile wallet adoption in Pakistan increased from 4% in 2017 to 19% in 2022.

The rise in digital financial services adoption is not exclusive to Pakistan. The World Bank, in its Global Findex Survey, also reports a global increase in the adoption and usage of digital financial services, which the Bank attributes to the onset of COVID-19. The pandemic has catalyzed the adoption of digital financial services, which were already in motion before the pandemic.

Despite the increase in financial inclusion in Pakistan, the gender gap in financial inclusion remains at the same level as it was in 2014. In the previous blog post we looked at the gender gap in the preparedness for adoption of mobile, and in this post will focus on the gender gaps in adoption by age, education and employment status. We will also look at the gender gap in the usage of mobile money wallets.

Before delving into the gender gaps, it’s important to note that there have been substantial increases in mobile money wallet adoption across various demographics, including gender, age, and education, from 2014 to 2022. Figure 1 above shows the percentage of those with mobile money wallets for each of the various categories. The highest increase has been observed in the “Higher Education” category, as the percentage of those with mobile wallets increased from 1.2% in 2013 to 45.7% in 2022. The smallest increase has come in the “No Formal Education” category, as it only increased from 0.2% in 2014 to 2.6% in 2022.

Figure 2 above shows the gender gaps in age and education demographics for 2022. This puts into perspective the increases shown in Figure 1, as the increases have predominantly been for men across all demographics. The lowest gender gap was reported for the higher education category, which also happens to be the category with the highest level of financial inclusion for men.

Figure 3 above shows the gender gaps in mobile money wallet adoption levels according to various employment statuses. The gender gaps are smallest in the cases of full and part-time employment, as women’s financial inclusion levels are 43% and 25% respectively. However, these two categories form a small proportion of the female sample, with only 5% of women reporting full-time employment and 4% reporting part-time employment. This means that the higher levels of financial inclusion in these categories did not have a substantial impact on the overall levels of female financial inclusion. “Housewife” accounted for 58% of the female sample, and the low financial inclusion level of 3% for this category explains the low overall level of financial inclusion. It’s also important to highlight that one of the highest gender gaps in this list was for full-time students, as 15% of male and only 2% of female students had mobile money wallet accounts.

Figure 4 examines the gender gaps in mobile money wallet usage. Depositing and withdrawing money from one’s account is the highest use case for both genders. However, only 54% of women reported depositing money into their mobile money wallet account, compared to 86% of men. This is especially peculiar when considering that 81% of women account holders reported withdrawing money from their account, implying that a substantial proportion of women rely on external sources for receiving money into their accounts, such as receiving transfers from friends and family, as 41% of female wallet account holders reported being part of such transfers through their wallet accounts.

Furthermore, men have a more diversified usage portfolio than women, especially in purchases and paying bills. For example, 73% of men reported using their mobile money wallet accounts for purchasing airtime top-ups, whereas only 33% of women reported doing the same. Similarly, 6% of men reported using their wallet accounts for paying for merchant payments, compared to only 3% of women reporting to do so. A more substantial gender gap exists in the use of wallet accounts for paying utility bills and the like, with 34% of male wallet owners and only 6% of female wallet owners reported to use their accounts for that.

In some instances, the data showed a reverse gender gap, indicating that a larger proportion of females reported using a particular service or feature than males. One notable use case was the use of mobile money wallets to receive welfare payments from the government, with 7% of female wallet owners reporting using this feature compared to only 2% of male wallet owners. Another use case where females showed higher usage was saving, with 12% of female account users reporting using the service for this purpose, compared to 9% of male account users.

In conclusion, while the overall level of financial inclusion has increased in Pakistan, the gender gap in financial inclusion persists and has not improved. The adoption of mobile money wallets has increased across all demographics, but the gender gap in adoption is more significant in the cases of females, especially for those with no formal education. The usage patterns also highlight a notable gender gap in the diversification of use cases, with men using their mobile money wallets for more varied purposes, including purchasing airtime top-ups, paying for merchant payments, and paying utility bills. Women, on the other hand, rely more heavily on external sources for receiving money into their accounts, likely through transfers from friends and family. The adoption of mobile money wallets has led to an increase in financial inclusion in Pakistan, but the persistent gender gap in adoption and usage highlights the need for targeted efforts to improve women’s access to financial services. Closing the gender gap in financial inclusion is essential to promote gender equality, increase economic opportunities for women, and promote inclusive economic growth.