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ISLAMABAD: Financial inclusion in Pakistan has increased from 21 percent of adults pre-pandemic to 25 percent in December 2020 (during pandemic) and the change was driven entirely by mobile money adoption.

This was disclosed in the findings of a survey on the impact of Covid-19 on financial behaviour in Pakistan shared during a webinar by Karandaaz, on Friday. The pandemic catalysed greater use of financial services, namely bank accounts, mobile money account usage, and receiving remittances, according to a survey.

One of the major initiative was drafting of digital regulations.

Former governor State Bank of Pakistan (SBP) Salim Raza said that cost of digital transaction should come down, so as to facilitate the small transactions.

In his opening remarks, Raza, who is also member Board of Directors at Karandaaz, stated that digital finance infrastructure and its adoption points towards its rich proposition, for instance, massive remittances are cash-based. digitising these alone will increase financial inclusion exponentially.

He said that share of e-banking in Pakistan is meager and adoption of digital channel will formalise predominately cash economy.

He said that the survey disclosed that mobile money account ownership tripled among women and increased from two percent before the pandemic to six percent in late 2020.

This is evident from significant increase that technology-based solutions should be focus for making a meaningful impact on financial inclusion indicators, he said, adding that the digital financial services are means to access those who, otherwise, remain excluded from the formal financial system, such as women.

The SBP has been playing a very important role for financial inclusion in the country and the people living in rural areas have access to financial inclusion through digital technology.

The participants were told that the survey was designed and conducted in partnership with Kantar and is preceded by six waves of the Financial Inclusion Insights (FII) Survey.

The FII survey is a nationally representative survey gauging financial inclusion and access to and use of mobile money and other digital financial service in Bangladesh, India, Indonesia, Kenya, Nigeria, Pakistan, Tanzania, and Uganda. The last financial inclusion insight (FII) was carried out prior to the Covid-associated lockdown in March 2020. Subsequently, this survey was conducted from October 20 to December 30, 2020, to measure changes in financial inclusion compared to the FII Wave 6 survey implemented earlier in the year.

According to the survey, mobile money account ownership by registered users increased from nine percent of adults before Covid-19 to 16 percent in late 2020.

The pandemic had no significant effect on bank account ownership compared to before Covid-19.

The pandemic caused the gender gap to narrow in 2020 as it was a barrier to financial inclusion and economic empowerment.

Now the financial inclusion of women increased from 6-11 percent, which is significant considering the number hovered between 5-6 percent in multiple previous waves of the FII Survey.

Sohail Javaad, director Payment System Department (PSD) at the SBP, said that with the recent launches of Roshan Digital Accounts and Raast-Pakistan’s digital payment system, and the recent release of the exposure draft of digital bank regulatory framework, the SBP has been taking steps to put in place a digital financial ecosystem at the national level. These initiatives have helped ease extraordinary challenges posed by the pandemic.

Waqasul Hasan, CEO Karandaaz also spoke on the occasion, and stated that it is evident from the survey that the Covid-19 crisis has brought about a substantial shift towards digital financial services.

During the webinar, a presentation on the findings of the survey was made by Dr Samuel Schueth, Research Director at Kantar.

Copyright Business Recorder, 2021

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