Overview of Financial Inclusion and Mobile Financial Services in Pakistan

An overview of the state of financial inclusion and mobile financial services in Pakistan was released by Karandaaz Pakistan a few days ago, shedding light on the opportunities which can improve m-wallet uptake considerably. The deck informs about financial inclusion and mobile money by bringing together data from national and international sets and reports.

Pakistan’s mobile financial services sector continues to expand following its origin in 2008, having achieved a firm footing in the country’s financial sector landscape. The availability of mobile services has increased, with 8 mobile money providers reaching out to both urban and rural areas, leaving traditional banking channels behind in scope and range.

According to the deck, Pakistan’s financial inclusion numbers have seen an improvement according to most sources. Numbers of households formally served by State Bank of Pakistan have increased from 10% in 2008 to 23% in 2015, which clearly shows the improvement in ease of access to finance.

pakistan financial inclusion numbersHowever, there is significant scope for more progress. Financial inclusion in Pakistan is low as compared to global standards and there are some groups which are more financially excluded than others. [Slide 5 and 6] Not only this, while 50% of adult Pakistanis took loans in the previous year, only 5% borrowed for formal financial institutions. The savings also remain informal (with 51% in cash at home.) Further, incidence of domestic money transfer is higher in Pakistan, as 93% of the population prefer personal delivery by self. They don’t use formal financial services either due to lack of awareness or income.

Mobile Money

Branchless banking provides an opportunity to kick start financial inclusion as majority of Pakistanis have access to mobile phones (79%) which makes it the perfect medium to enable financial outreach. As compared to other financial service delivery channels, number of mobile subscriptions is by far the greatest number.

branchless banking pakistanWith over the counter and mobile wallet as delivery models, branchless banking is convenient. It also has a facilitating policy environment (SBP gave limited permission for remote wallet opening i.e. biometric verification in 2015) Also, not only has the value of mobile money transactions reached 3.5% of GDP but the use of mobile money seems to be increasing

use of mobile money pakistanOTC and m-wallets

Over the counter transactions dominate the market (80% while m-wallet constitutes 14%) and Pakistan lags behind leading countries in uptake of m-wallets. The users of mobile money are dominantly men, and statistics show that those who do open m-wallets don’t use their accounts. [slide 24] The main reason for not having an m-wallet is that the OTC users are satisfied with the service.


Agent network in Pakistan is growing and customer satisfaction is high (52% very satisfied, 46% somewhat satisfied) However, it still lags behind global and regional counterparts.

Opportunities: Increasing m-wallet uptake

New regulations have made it increasingly easy to open m-wallet accounts.

opening an m wallet account in pakistanOnly 1 in 4 agents are able to help customers open their accounts – this hurdle at level 0 has been overcome by biometric verification technology.

Further, the following opportunities can be utilized:

  1. Improving customer awareness and understanding: Few people have full understanding of mobile money and brand awareness of MM providers is increasing but is low. Generally banks are perceived to be more trustworthy than mobile money. Also, being a subscriber to a provider’s parent company doesn’t mean that people recognize its MM brand – currently, Easypaisa is the most recognized MM service.

Communication is needed throughout the m-wallet process.

m wallet adoption process

  1. Circumventing customer skill deficits: Mobile phone ownership and capabilities affect m-wallet uptake. Sending a text message is a relatively more difficult task for individuals, and they find it even more difficult to understand text messages from service providers.

difficulty in understanding messages from service providers vs family and friendsTherefore, moving towards human centered design can circumvent the skill gap by increasing people desirability. This can be done by new user interface design innovations, keeping graphics, convenience and engagement in mind.

  1. Diversifying product mix: More Pakistanis have borrowed (50%) or saved (32%) in the last year than those who have received (35%) or sent (16%) remittances. Yet, product mix offered by all providers is skewed towards payments. Using wallets allows people to efficiently access a wider product mix.
  2. Promoting Interoperability: Interoperability is defined as “the possibility to transfer money between customer accounts at different mobile money schemes and between accounts at mobile money schemes and accounts at banks.”[i] This remains limited all over the globe as well as in Pakistan, though recent developments prove that interoperability can spur mobile money use.
  3. Opportunity 5: Digitizing Government to Person (G2P) Transfers: There is a global scope for G2P and a large proportion of G2P payments in Pakistan can be digitized; its benefits include and extend beyond financial inclusion.

As can be seen, Pakistan’s financial inclusion agenda stands to gain a lot from the potential of mobile money. A lot has been achieved and there is still scope for even further progress and thus can be done by making use of the opportunities available. The most important fact to be noted is that Pakistan’s financial inclusion numbers have improved dramatically (8% to 23%) This opens new doors and sheds a positive light on the state of financial inclusion in Pakistan.

[i] GSMA report on Implementing Mobile Money Interoperability, 2013

To check out the complete report by Karandaaz Pakistan, go here

  • The major problem with mobile wallets is that its very hard to get money into the accounts themselves. I have both a EasyPaisa and Mobicash account which is use somewhat regularly and thats primarily becuase its tough to get money in. If i was able to send money to my wallet using bank2bank transfer adoption would start to rise.

    Further to that these accounts need to be carrier agnostic ideally meaning that a mobilink customer can also open a easypaisa account if they so choose

    • But why is it so hard to get money into your mobile accounts?
      I haven’t used tried to use any mobile account yet so just wondering. . .

  • >