Financial inclusion – 20 May 2023

Pakistan is a strangely unique country, and the challenges it faces are also not ordinary. For example, in the 21st century, it appears almost unbelievable that only 29 per cent of the adult women population in the country own a bank account. Half of Pakistan’s population is women, and the fact that less than half of them can claim financial inclusion should be alarming for anyone in policymaking. Women are mostly employed in the informal sector and often receive their salaries in cash and so never really ‘need’ to open a bank account. Also, in most cases, women rely on a household’s disposable income that is usually given to them by what we normally call the head of the family. But this lack of financial independence keeps women away from many opportunities. For example, women without a bank account have no record of the money they save or earn during a year. All is not gloomy though; with the emergence of mobile banking applications, there has been a rise in women’s financial inclusion. Recent estimates suggest that the total number of branchless accounts of women reached 24.8 million in 2022, a 20.9 per cent increase as compared to a year before. The State Bank of Pakistan has also introduced various accounts for people. Instead of going to a bank with hundreds of documents, people can now use their ID card or mobile phone number as a valid account number for financial transactions.

This ease of transferring funds may have allowed more women to use formal channels for several financial dealings. This has allowed many home-based workers to receive funds more conveniently. But these successes cannot make us ignore the many problems that still haunt women. Pakistan is one of the countries with the widest gender gap in mobile ownership – 33 per cent. And for more women, financial inclusion will remain a dream unless they have access to devices that support money-sharing apps. And since most of them have no access to mobile or internet, they cannot access vital information that can help them learn different financial products.

Previously, opening a bank account was nothing less than a Herculean task especially for women who used to do freelance work; they had no official documentation of the work they did. Also, most banks had strict requirements for opening accounts (which became even stricter under the FATF). What’s even more disturbing, there have been accounts of women needing male witnesses to set up their accounts. Digital financial inclusion allows women to be more independent and manage their finances without any interference. Even though the post Covid-19 pandemic world has resulted in an increase in the number of women-run home-based businesses, most women have been working remotely in a country where workplaces are male dominated and lack inclusivity. With the growing use of mobile applications like YouTube and Instagram, most stay-at-home women run social accounts as an income stream. But such opportunities can only help them when they have access to proper financial channels.

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