K-FIS 2022 Shows that Financial Inclusion in Pakistan Increased by 9 Percentage Points Between 2020 and 2022

Feb 10, 2023

Karandaaz Pakistan hosted a webinar to share key findings of the Karandaaz Financial Inclusion Survey 2022 (K-FIS), a nationally and provincially representative demand side survey tracking financial inclusion in the country. The primary purpose of the survey is to track access to and demand for financial services especially digital financial services, adoption among underserved groups and to identify drivers and barriers to adoption. The 2022 edition of the survey focuses on customer’s awareness and knowledge of key facets of interoperability in the financial services market. Interoperability allows customers of different financial services providers to interact with each other, for example by making direct payments from the mobile money account of one provider to the mobile money account or a bank account serviced by a separate and competing provider.

Dr. Shamshad Akhtar, Chairperson Karandaaz said,

The latest edition of the K-FIS shows that financial inclusion in Pakistan increased by 9 percentage points between 2020 and 2022. Prior to this edition of the survey, a similar increase in financial inclusion was achieved over 7 years. Mobile money has been a key driver of this push, with registered mobile money users having more than doubled from 9% to 19% of adult Pakistanis. The 2022 edition of the survey also covers, for the first time, sample populations from of ICT, Gilgit Baltistan (GB) and Azad Jammu & Kashmir (AJK), all of which have financial inclusion rates that are above the national average. But the findings also show significant and chronic gaps regarding the inclusion of women, rural populations and across provinces – where financial inclusion in Punjab, ICT, AJK and GB exceeds 30%, in Balochistan it does not even reach 15%, with the financial inclusion of women being as low as 5%. Inequality in the provision of financial services means, that pockets of Pakistan’s citizenry remain un-serviced. This is no longer acceptable. The K-FIS therefore, is a step in the right direction

Mr. Noor Ahmed, Director Agri Finance and Financial Inclusion Department, State Bank of Pakistan (SBP) in his keynote address stated that:

Over the years, there has been significant progress on financial inclusion. Key initiatives such as RAAST have been transformative in furthering the inclusion of the marginalized. Since 2007, microfinance clients have increased from 0.5 million to 8 million and account ownership has increased from 60 million to 150 million with approximately 80 million unique accounts. However, to realize the goals of the NIFS, key challenges and barriers will need to be addressed. While account ownership has expanded, there are a substantial number of inactive accounts. This indicates that accessibility and service providers need to be supplemented with awareness building, behaviour change initiatives and developing financial literacy among clients. Secondly, the gender gap is significant with 61% of women excluded from the formal financial system. This major gap needs to be addressed through gender-sensitive elements in service design. The Banking on Equality Policy has laid out several initiatives in this regard, such as credit services for female digital accounts and establishing targets for women’s account ownership. The KFIS survey is valuable and instrumental in addressing these challenges. The information on the various aspects of financial inclusion can inform service design and provision, and also facilitate market development in a manner that considers the key barriers to inclusion

Mr. Mahesh Mishra, Counsellor and Group Head (Economy & Trade) at the UK’s Foreign, Commonwealth & Development Office (FCDO) said,

Access to suitable and affordable financial services is a powerful tool to help poor people work their way out of poverty. I congratulate Karandaaz on successful completion of the 2022 Financial Inclusion Survey in Pakistan. I hope K-FIS will provide data and insights the policy makers, regulators, and private sector need in supporting expansion of financial access in Pakistan

The webinar also included two panel discussions led by experts from the financial sector. The first panel discussion focused on bridging gaps in the financial inclusion of women and rural populations; participants in the discussion included Mr. Muhammad Aurangzeb, CEO HBL; Dr. Rashid Bajwa, CEO National Rural Support Programme (NRSP); Ms. Halima Iqbal, Founder and CEO Oraan Tech; and Ms. Inez Murray, CEO of Financial Alliance for Women (FAW). The second panel discussion focused on interoperability and participants included Mr. Sohail Javaad, ED Digital Financial Services Group SBP; Mr. Mudassar Aqil, CEO of Telenor Microfinance Bank; Mr. Yahya Khan, Chief Digital officer of Bank Alfalah; Ms. Naureen Hyat CEO of ZoodPay Pakistan; and Dr. Russell Toth, Senior Lecturer at the University of Sydney.

In her closing remarks, Dr. Nafisa Shah Member National Assembly and member of the Parliamentary Standing Committee on Finance, Law, Justice and Information reiterated the importance of this subject. Dr. Shah displayed detailed and nuanced understanding of financial inclusion, stating that financial inclusion is a powerful lever and can open up opportunities for vulnerable and excluded segments of the country’s citizenry. She urged Karandaaz to include qualitative aspects in subsequent editions of the survey in addition to the extensive quantitative metrics already covered in the K-FIS. Dr. Shah also stated that the significance of financial inclusion is not fully comprehended among policy circles and this survey should be presented to policy makers to enable adequate understanding and suitable actions by political leaders and representatives.

CEO Karandaaz, Mr. Waqas ul Hasan thanked Dr. Nafisa Shah for her comments and welcomed an opportunity to share and present the K-FIS 2022 findings to policy makers. Mr. Hasan concluded his remarks by stating that

In conducting this rich survey, Karandaaz will periodically but regularly be collecting data on a rich set of indicators to promote a data-centric culture within the financial ecosystem.

The full K-FIS 2022 presentation is now available on the Karandaaz website: https://bit.ly/3K3QVnI
Share your questions, comments, and suggestions on our social media accounts or email us at: info@karandaaz.com.pk
You can watch the full webinar below: https://youtu.be/IW2pW0mN5Ic

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