Asian Development Bank tells Pakistan how to tap fintech potential
- Says country can leverage fintech to expand financial inclusion and drive economic growth, but only if fiscal bottlenecks are addressed
ISLAMABAD: Clearer tax laws, lower rates, and simplified compliance must sit at the heart of Pakistan’s fintech strategy if the country is to emerge as a regional front-runner, said the Asian Development Bank (ADB).
The Bank, in its latest report “Unlocking the potential of fintech in Central Asia,” stated that Pakistan can leverage fintech to expand financial inclusion and drive economic growth, but only if fiscal bottlenecks—particularly tax complexity and compliance costs—are addressed alongside regulatory and capacity challenges.
The report recommends that Pakistan reform its tax system to make it more fintech-friendly by clarifying tax obligations, introducing targeted tax reductions, and streamlining procedures, including online filing mechanisms. Greater tax awareness through training, incubators, and academic institutions is also seen as critical to fostering a culture of compliance within the fintech ecosystem.
The report noted that closer coordination between the Federal Board of Revenue (FBR), the State Bank of Pakistan (SBP), and the Securities and Exchange Commission of Pakistan (SECP) would be essential in this process.
Beyond taxation, the report calls for a bespoke and adaptive regulatory framework tailored to fintech firms. It stresses the need for fintech-specific licensing categories that reflect the diverse risks and business models of digital financial service providers. Proportional licensing fees, calibrated to firm size and activity, are recommended to lower entry barriers for start-ups and smaller players, while encouraging competition and innovation.
A collaborative regulatory approach is also highlighted as a priority. According to the ADB, closer coordination and information sharing among regulators would help eliminate overlaps and gaps, create a unified framework, and support innovation, while also laying the groundwork for stronger regional cooperation.
On financial inclusion, the report urges Pakistan to streamline licensing processes for innovative products and provide regulatory guidance and technical support to fintech firms. Grants, funding opportunities, and structured capacity-building programmes are identified as tools that could accelerate innovation, expand access to finance, and strengthen the competitiveness of the financial sector.
ADB pointed out that Pakistan lags behind several regional peers on key fintech indicators and warns that internal capacity constraints could continue to limit progress. It recommends investments in individual, institutional, and environmental capacity, including academic partnerships for fintech-related courses, enhanced digital literacy, specialised training for policymakers and legislators, and stronger research and development collaboration. Open data governance and institutional strengthening are also seen as necessary to ensure accountability and sustainable growth.
The report further emphasises the importance of deepening regional collaboration within the CAREC region. Regional investor meetings, conferences, and conventions could facilitate knowledge sharing, cross-border investment, and joint initiatives. A particular focus on underserved and unserved areas, and on digital financial services for remote populations, would help advance financial and digital inclusion.
ADB noted that while Pakistan has made some progress, technical assistance and closer collaboration with regional partners will be critical if the country is to close the fintech gap and fully harness the sector’s disruptive potential.
Copyright Business Recorder, 2026
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