These days almost everyone in Pakistan owns a Smartphone, yet the stock market investor base is too low especially comparing to regional countries (for the case of Pakistan it is just 0.13 percent of Pakistan’s population that invest in the stock market, compared with 16 percent in China and 9.5 percent in India) – this shows Pakistan’s digital inclusion puzzle. People are digitally connected but remain financially excluded especially from digital participation such as investing in the stock market. All this means that access to technology alone does not automatically translate into financial inclusion.
The teledensity (number of telephone connections per 100 people) was just 2.8 percent in 2000 showing abysmally low mobile adoption and scant digital access. However, the teldensity rose to 81.3 percent by 2025, with smartphones widely used across rural and urban areas of the country. This rapid digital penetration, however, did not metalize into stock market trading participation - with only 220,000 active retail investor accounts (although an increase of more than 60,000 investors was observed during 2025, driven by the strong performance of the stock market, only 5–10 percent of this segment engages in weekly trading) in a country of over 240 million people. Although multiple digital reforms introduced by the government, such as mobile trading apps, simplified digital account opening, Sahulat account for low income or unemployed segments – the stock market continues to be an avenue of underutilization.
Trading in stock market is an important driver of national economic development. A deeper stock market benefits everyone. For investors it provides an opportunity of wealth creation, long-term financial planning and most importantly protection from inflation. Likewise, companies gain access to their much-needed funds for expansion without the burden of interest payments in case of debt financing. Finally, the government earns tax revenue both from investors and companies, thereby reducing reliance on external borrowing. Hence, a vibrant stock market creates a powerful multiplier effect across the economy.
In reality, Pakistani people are both unable and unwilling to invest in the stock market. The core barrier is not technology or access; rather it is a persistent lack of awareness, trust and financial illiteracy which prevent masses from engaging in such type of formal investment activities. Millions do not understand how the stock market works and without basic training they view it as speculative and very risky. Moreover, traditional preferences such as gold, real estate and holding cash continued to dominate while investor education efforts are still far from widespread. Consequently, digital access has not translated into financial empowerment in Pakistan.
To break this cycle, Pakistan needs a widespread financial literacy campaign using the platform of educational institutions, delivered by trained faculty. Such campaigns should serve as a vehicle to educate and train masses about digital finance, risk awareness and basics of investment using easy to understand language, videos and real life examples both in Urdu and regional languages. In this way students and the general public can become multipliers by spreading this knowledge within their respective communities. Finally, progress can be tracked by observing new account openings and participation metrics.
Although, it would not be correct to say that Pakistan’s stock market has a low investor base only because of lack of financial literacy. There are several other major issues as well—such as the perception among retail investors that big players control the entire system, that family-owned companies never empower minority shareholders, that prices crash without warning, and that many companies earn profits through cartelization rather than genuine performance. However, these issues can also be addressed through strong financial literacy campaigns. Such campaigns can educate people about investor rights—for example, the right to attend AGMs, the right to vote in board elections, the right to receive timely information and disclosures, and the right to lodge complaints with the regulator, SECP, in case of misconduct. Once people become aware of their rights, they will feel less helpless in dealing with monopolistic or family-dominated companies.
Ultimately, if Pakistan really wants to reap the full benefits of digital inclusion, it must recognize that digital inclusion means far more than just owning a smart phone. The real challenge now is to transform the mobile revolution into financial empowerment of every citizen and this transformation will be possible only through sustained financial education aimed at behavioral change to expand the county’s investor base.
Copyright Business Recorder, 2025
The writer is an Assistant Professor at the Pakistan Institute of Development Economics (PIDE). She can be reached at: farhat@pide.org.pk