It only takes a few hours in any Pakistani bank to notice that there is a caste system at work, established via a myopic lens of gender, source of money, and social status. All of these variables have a role in determining your level of access to various services, particularly loan items.
If you were a woman entering a bank without the presence of a man, you would almost certainly be turned away. Alternatively, to be regarded creditworthy, you will be needed to offer some type of validation from your male relations. If you’re a man not fulfilling the standard criteria of employment, you would be surprised to know that there’s no place for you either, and if you are an owner of a small business, an online store or a neighbourhood karyana or khokha, sorry to break it to you (in case you have not already experienced it first hand), you are no different. However, if you are a blue-collar worker with a meagre salary or not employed at all, you would be at the low. The unbanked population in Pakistan is estimated to be 100 million people, accounting for 5% of the world’s total unbanked population. Similarly, though the use of digital financial instruments is relatively low, with only 2.9 percent of adults owning a debit card and 1% utilising it to make payments, the financial sector fails to meet the financing needs of MSMEs. It is safe to argue that financial inclusion will remain illusive until it becomes viable to bank the poor and mistreated. With the rise of fintechs and the industry’s rapid evolution, however, the end of financial marginalisation is in sight. We now have the means and expertise to dramatically redesign financial infrastructure to be ultra-inclusive, resulting in a proliferation of various products that assist the unbanked in weathering shocks and seizing opportunities. While agile payment giants have dominated the international digital environment for some time, local fintechs are now beginning to disrupt the Pakistani market as well. These fintechs, unlike their traditional financial competitors, are not only disruptive and agile, but they can also re-invent themselves in the face of change. As a result, Pakistan’s fintech revolution has far-reaching consequences for policymakers working to end severe poverty and promote equitable economic growth.
