Bridging the financial gap: insights from Karandaaz Financial Inclusion Survey (K-FIS)—I
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
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
9 hours ago
- Express Tribune
Donors for power tariff cut sought
Listen to article The government on Friday pitched a new package before foreign donors for up to Rs10.5 per unit reduction in prices on additional use of electricity by industrial and agricultural sector consumers to boost demand, which had dipped by one-fifth due to unaffordable prices. The Minister for Power, Sardar Awais Laghari, shared the broader contours of the Industrial Support Package (2026-28) with over a dozen representatives of international development organisations to seek their diplomatic support to reduce prices. The package appeared to be gaining traction with lenders, but their observations centred on the sustainability of the increase in demand and the viability of the national grid electricity. They raised concerns about relying solely on price signals to boost dwindling electricity demand instead of implementing comprehensive reforms in the energy sector, which include ensuring the reliability of the national grid power. The response of the power minister was awaited until the time of filing this story. Government officials stated that the Power Division had informed foreign donors it wanted to introduce a support package for a period of three years (2026-28) and was counting on their support. Among the participants were the World Bank, the Asian Development Bank (ADB), and other regional and international development organisations. According to the proposal, the government wants to reduce the current average electricity price of Rs33.5 per unit by Rs10.5, but only on the incremental use of electricity. It has proposed that industrial connection rates will be set at Rs22.98 per unit. For the agricultural sector, the rate will be the same, but the benefits will be Rs7.77 per unit due to the current Rs30.75 per unit price. Foreign diplomats were informed that the price reduction would only apply to additional electricity use compared to consumption from December 2023 to November 2024. In cases where no reference consumption is available, the higher consumption of the relevant month or the sanctioned load will be used for comparison. The government claimed that the new package would be a subsidy and cost-neutral, and should neutralise any opposition from the International Monetary Fund (IMF) this time. The IMF had rejected a similar package last year due to its implications for other consumers. According to the proposal, the Rs3.23 per unit debt servicing surcharge and the quarterly tariff adjustment will not apply to the industrial support package. However, this exclusion could hurt residential consumers, whose debt servicing surcharge may increase further to raise sufficient funds to retire the Rs1.2 trillion debt acquired from banks to address circular debt. A government functionary noted an element of discrimination, as large numbers of consumers in Sindh might shift to the national grid due to high gas prices, making them eligible for incremental benefits compared to Punjab-based industries that already rely heavily on the national grid. Due to unaffordability, industrial consumers are increasingly moving away from the national electricity grid. Industrial electricity demand dropped by 20% over the past two years. Consequently, the number of net-metered industrial consumers surged to nearly 6,900 in fiscal year 2024, compared to just 1,570 in 2022. Electricity tariffs for industrial consumers in Pakistan are among the highest in the region. Compared to about US16 cents per unit locally, electricity costs US9 cents in India and US10 cents in Bangladesh, Pakistan's two biggest competitors in global markets. However, concerns remain about the sustainability of the package and whether such price reductions can be beneficial without addressing the underlying issues in the power sector. Foreign diplomats were briefed on reforms the government is undertaking. One participant told The Express Tribune that, upon inquiry, it appeared all such initiatives were falling behind extended deadlines. The competitive market is not yet operational, and the government told participants it may become operational in September. Disputes over wheeling charges persist, and the revised Integrated Generation Capacity Expansion Plan is also facing delays. The privatisation of power distribution companies has not been accelerated, and the government remains unwilling to end the uniform electricity price policy, which penalises Punjab-based consumers for theft in other provinces. A major lender inquired about the excess generation capacity claim, questioning whether the system can generate power equal to the installed capacity and if the transmission system can handle the full load. Sources said there were also concerns about the viability of increased demand once the package ends. Evidence from similar industrial support packages in the past showed that demand spikes were typically modest and did not result in sustained grid dependence. Sources added that potential risks exist that the actual costs of this package might exceed the proposed marginal rate, particularly during the summer season. One major view was that any effort to restore industrial demand through a support package should be made under a broader framework that balances both price and non-price elements. Implementation risks, grid reliability, and service quality remain critical blind spots that could limit the package's success. Donors advised the government to restore industrial demand on the grid through a combination of reliable service delivery and sector-wide planning, rather than relying on reactive short-term measures.
Business Recorder
9 hours ago
- 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
Business Recorder
11 hours ago
- Business Recorder
Azerbaijan to invest $2bn in economic sector
SHUSHA, (Azerbaijan): Pakistan and Azerbaijan in a major development Friday signed a partnership agreement of $ two billion investment in Pakistan. The agreement was reflective of the continuing flow of investment in Pakistan under the leadership of Prime Minister Muhammad Shehbaz Sharif. In the presence of the prime minister, Deputy Prime Minister and Foreign Minister Muhammad Ishaq Dar and Azerbaijani Economy Minister Mikayil Jabbarov signed the agreement for investment of a total of $ two billion by Azerbaijan in the economic sector of Pakistan. The Pakistani delegation was also present on this occasion. PM Shehbaz urges regional unity, highlights India's 'weaponisation of water' at ECO summit The agreement was signed between the two countries after a cordial meeting between the Prime Minister and the Azerbaijani President Ilham Aliyev in Khankandi. While the final and detailed agreement will be signed during the Azerbaijani President's visit to Pakistan. The agreement has taken investment and trade relations between the two countries to a historic level. This agreement will prove to be a milestone for further promotion of brotherly relations between the two countries and for strengthening of trade partnership. Prior to the recent visit of the Prime Minister, the Deputy Prime Minister and Foreign Minister, Pakistani diplomatic mission and delegations reached consensus on different aspects of this agreement. Both countries also agreed on further exchanges to promote cooperation in various sectors. While talking to media in Shusha, Prime Minister Shehbaz Sharif told that Pakistan and Azerbaijan signed investment agreement of $ two billion, adding in future the investment will be increased manifold. 'We are thankful to President of Azerbaijan for investment in Pakistan,' he remarked. He said he had a productive and useful meeting with the President of Azerbaijan. The prime minister said the member countries at the Economic Cooperation Organisation (ECO) summit agreed to enhance cooperation in trade, investment, water resources and different other fields. The member countries also agreed to increase cooperation on issue of melting of glaciers, he added.
