The op-ed emphasises that the State (SBP, Government) has built the rails, but private-sector institutions must run the “trains.” The success story must be one of regulatory vision meeting institutional execution — a partnership that converts digital infrastructure into tangible credit availability for farmers, shopkeepers, and first-time borrowers.
Pakistan’s digital payments infrastructure is a major achievement - Something significant has happened in Pakistan’s financial system over the past several years, and it has not received the recognition it deserves.
The State Bank of Pakistan has built a digital payments infrastructure that now ranks among the most consequential economic projects in the country’s recent history. RAAST, the national instant payment system, processed 742 million transactions worth Rs23.27 trillion in a Jan-Mar 2026 quarter alone.
QR code merchant payments grew 41 percent quarter-on-quarter, with transaction value surging 63 percent to Rs0.5 trillion. Mobile banking and digital wallet registrations have crossed 132 million, up 37 percent from a year earlier. Of Pakistan’s 268 million bank accounts, nearly half are now linked to a mobile banking app or digital wallet.
Branchless banking mobile app users reached 95.8 million by March 2026. Digital channels accounted for 92 percent of all retail payment transactions — 3.4 billion transactions worth Rs68.3 trillion in a single quarter. The Prime Minister’s cashless economy initiative accelerated merchant onboarding, pushing Raast’s P2M network past 2.6 million merchants (SBP Payment Systems Quarterly Review FY25-26).
These are not incremental improvements. They are structural shifts, and they were not accidental. The SBP’s deliberate and purposeful build-up of regulatory architecture — Branchless Banking regulations (2008), the National Financial Inclusion Strategy (2015-24),RAAST instant payment system (2020-23), Digital Onboarding Framework (2021), Open Banking Framework (2022),Digital Banking Framework (2022), PISP guidelines (2025), Consent Management guidelines (draft) and Regulatory Sandbox (2025) created the conditions for a payments revolution that most observers underestimated when it began.
The machinery of digital commerce, once prohibitively expensive to deploy at the point of sale, is now accessible, trackable, and generating data at a scale that simply did not exist three years ago. The rails are built & are functioning. That is the achievement, and it belongs to the Regulator and the State as much as to the Private Sector.
However, Infrastructure Alone Is Insufficient as Credit is still the Missing Link -Rails without trains are just infrastructure on paper. The harder question — the one that decides whether this digital foundation translates into genuine economic transformation — is whether Pakistan’s banking sector is now using that infrastructure to move the cargo that matters? That cargo is Credit. And here, the picture becomes more complicated.
Pakistan has 5.2 million small and medium enterprises generating 40 percent of GDP, employing 80 percent of the non-agricultural workforce, and contributing 25 percent of exports (Research Article, Competition Commission of Pakistan). However, a mere 2.1 percent of Pakistani firms hold a bank loan or line of credit, against a South Asian regional average of 31.6 percent, Bangladesh’s 42.5 percent, and Indonesia’s 20.6 percent (KSBL Policy Brief). SME credit penetration as a share of GDP sits at 2 percent, against an emerging market average of 18 percent (Business Recorder).
Consider what the Q3 FY26 payments data reveals when read carefully (SBP Payment Systems Quarterly Review FY25-26). Retail payment volumes hit 3.7 billion transactions, up 9 percent quarter-on-quarter worth Rs168.8 trillion. Mobile banking and e-money wallets processed 2.89 billion transactions worth Rs41.67 trillion. These are extraordinary numbers. But POS transactions — the merchant interface of the economy — totalled just 150.4 million transactions worth Rs0.81 trillion. E-commerce payments, despite the much-celebrated digital surge, amounted to Rs0.47 trillion. Adding to above, cash-in-circulation stands at PKR 11.1 trillion — 10 percent of GDP — a precise measure of the economic activity the banking system cannot see, cannot score, and therefore will not finance.
The story becomes clearer: Pakistan has built a formidable consumer payments system and an embryonic commercial credit system. The gap between those two things is where most of the country’s economic potential currently sits, dormant and un-financed.
Knowing that payments data is the new foundation for credit underwriting, PM’s Cashless Economy’s initiative to onboard merchants onto RAAST P2M is not merely a push to digitize payments, but critically also a data-generation initiative. Every QR code transaction creates a merchant cash flow record. Every Raast P2P transfer into a business account creates a financial behaviour trail. The infrastructure being built today is, by design, the underwriting foundation of tomorrow. What was previously invisible to formal credit assessment — the kiryana store owner’s daily revenue, the small manufacturer’s supplier payment patterns, the farmer’s seasonal input purchases — is becoming visible, transact-able, and score-able. This is the strategic logic the SBP embedded into its digital financial ecosystem, and it is exactly right.
The question is which institutions are ready to act on it?
The Bank of Punjab (BOP) has shown how to act on this opportunity through its performance over the past few years. Between December 2024 and December 2025, BOP’s SME borrower base grew 362 percent. The banking industry grew 65 percent in the same period — itself a healthy number, reflecting the enabling environment the regulator created. BOP grew at six times that rate, in the segment the industry has historically treated as too risky, too informal, and too expensive to serve. Outstanding SME financing at BOP expanded 96 percent, against the sector’s 38 percent. BOP’s SME borrower count moved from 30,816 to 142,272 in a single year, in a system where the entire industry held 303,000 SME borrowers at year-end (Internal, SME Div., SBP Quarterly SME Finance Review). One bank, acting within the regulatory framework the SBP constructed, acted on behalf of all SME borrowers in Pakistan’s formal banking system.
The way these numbers were hit matters because growth without architecture is not replicable. BOP built its lending infrastructure on the same Digital Rails which SBP constructed — API based Open Banking, RAAST rails for P2M & closed-loop transactions, NADRA & PMD for real-time verification, PITB portal integration for digital origination — and then layered onto them the Proprietary Elements that turn payments data into credit decisions: AI scoring engines, Psychometric assessment developed with international partners, PLRA land title verification, and collection infrastructure purpose-built for first-time borrowers. The Asaan Karobar Card has disbursed PKR 44 billion to 104,133 businesses. Asaan Karobar Finance has put PKR 68 billion into 7,461 enterprises at interest-free terms for tenors up to five years. An independent impact assessment by LUMS found that 49.8 percent of borrowers came from low-income districts, more than 40 percent were accessing formal credit for the first time, and 86.3 percent of applications were processed within two months. The repayment behaviour was described as “reassuring” — a clinical word that carries considerable weight in a segment that conventional underwriting had declared un-financeable.
The agricultural portfolio runs at a scale that commands attention. 859,880 Kissan Card loans. PKR 366.2 billion disbursed (since June 2024). Recovery rate above 99 percent. Applications sent by SMS, processed through an engine that requires no human intervention until the default stage, disbursed through closed-loop rails that restrict spending to verified agricultural input vendors — which is precisely why the recovery rate holds. The Livestock Card keeps 98 percent recovery across 40,693 loans (since January 2025). These numbers exist because the regulator built the rails — and because BOP built an engine specifically designed to run agricultural credit through them, at a scale and a risk discipline that the industry had not previously attempted.
The future big opportunity lies in scaling merchant and SME lending - The merchant opportunity is the next frontier, and it is the direct product of what the SBP’s digital payments push has created. With 2.6 million merchants now onboarded onto Raast P2M, QR transactions growing at 41 percent per quarter, and e-commerce volumes expanding rapidly, there is for the first time a commercially meaningful dataset of merchant cash flows available for credit assessment. Lending to these merchants — the kiryana owners, the small traders, the delivery-economy participants whose daily transactions now flow through trackable digital rails — is the next chapter of Pakistan’s financial inclusion story. BOP’s investment in merchant-acquiring, which grew fifteen-fold in 2025 alone to 73,706 active merchants, positions it directly at that intersection.
But Profitability and inclusion are not mutually exclusive -Across the full portfolio — agriculture, SME, low-cost housing, credit cards, personal loans — the Bank of Punjab, Pakistan’s digital engine, has disbursed over PKR 188 billion to 984,993 borrowers. It issued 937,690 credit cards, becoming Pakistan’s largest credit card issuer in/under three years. Its branchless banking account base grew 18.25 times between 2020 and 2025, against the industry’s 2.12 times — itself a reflection of the SBP’s branchless banking regulatory framework working as intended, with one institution pushing further than the rest. Women borrowers grew eightfold in five years, from 8,346 to 64,601. BOP has held first place on SBP’s Banking on Equality scorecard for three consecutive years. In Q1 2026, it posted 155 percent before-tax profit growth — PKR 10.2 billion — driven by organic credit expansion, with net interest income up 47 percent and fee income up 69 percent.
These are not the numbers of an institution treating inclusion as a compliance obligation. They are the numbers of an institution that understood what the regulator was building, invested ahead of the curve, and is now demonstrating — commercially, measurably, at scale — what the digital financial infrastructure of Pakistan is actually capable of producing.
Concluding the argument, financial inclusion has to be measured in credit disbursed, not just accounts opened -Digital excellence, properly understood, is not a UX category. It never was. It is the capacity to take a digital payments network built by the state, a KYC infrastructure built by NADRA, a merchant onboarding programme built by the SBP, and a branchless banking ecosystem built over a decade of regulatory effort — and convert all of it into credit that reaches the farmer in Sahiwal, the shopkeeper in Faisalabad, and the first-time borrower in Rahim Yar Khan who has never had a credit history but now does.
Pakistan’s financial inclusion story has for too long been written in accounts opened and wallets activated. The harder story — the one that determines whether this country’s extraordinary digital infrastructure investment translates into actual economic expansion — is written in loans disbursed, merchants financed, and borrowers who now exist in the formal financial system where they did not before.
The rails are built. The trains are running.
And the question of which institution is doing the most to move Pakistan’s economy forward on those rails has, at this point, a fairly clear answer.
Copyright Business Recorder, 2026
The writer is the Chief Digital Officer at The Bank of Punjab. With over 30 years of experience across banking, consumer distribution, and public service, he has held senior leadership positions at ICI Pakistan, Standard Chartered Bank, NIB Bank, and Kansai Paints. He specializes in retail banking strategy, distribution management, customer experience, and business transformation. He holds a degree in Civil Engineering from UET Lahore and an MBA from LUMS. The writer draws on publicly disclosed data from the State Bank of Pakistan, the Bank of Punjab, the World Bank Enterprise Surveys, and the Pakistan Banks Association. All figures are sourced from audited institutional disclosures or regulatory data. The views expressed in this article are not necessarily those of the newspaper