World Bank report: Pakistan’s poor still cannot access finance: Daily Times

ISLAMABAD: Despite significant growth of Pakistan’s financial system, access to finance remains elusive for most Pakistanis, especially among poor people, women, and small businesses in rural areas, says a new World Bank report launched Tuesday.
The report, titled “Bringing Finance to Pakistan’s Poor: A Study on Access to Finance for the Underserved and Small Enterprises,” says the average Pakistani household remains outside the formal financial system, saving at home and borrowing from family or friends in cases of dire need. In fact, only 14 percent of adults have access to a formal financial institution and about 40 percent have no financial access to formal or informal financial systems.
Policy efforts to increase access to finance in Pakistan have taken time to bear fruit, the report says, but now access is expanding quickly in certain financial sectors such as microfinance and remittances albeit from a very low base. The report says the major constraints to financial access arise from high levels of poverty, combined with low awareness of and information about available financial services, as well as gender bias. In addition, financial institutions’ efforts to expand access have been discouraged by slow technological advances, weak legal foundations, and unsuitable financial processes, and products.
“Despite significant banking sector reforms and efforts to expand financial market coverage over the past few years, outreach has lagged behind the country’s growth and development needs,” said Yusupha B Crookes, World bank Country Director for Pakistan “This report demonstrates that there is an enormous growth potential for financial services in Pakistan, especially in rural areas. Around one-third of the population borrows, but only three percent use formal services to do so.”

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