FINANCIAL INCLUSION IN
PAKISTAN
FINANCIAL SERVICES ACCESS AND USE
August 2015
Courtesy DIVatUSAID on Flickr
Courtesy European Commission DG ECHO
on Flickr
Courtesy US Pacific Air Forces on
Flickr
Courtesy TESS India on Flickr
Financial inclusion is not just about ensuring consumers have
formal financial accounts.
It’s about ensuring consumers can access tools that can
change the course of their lives.
There are three main aspects to building financial
inclusion:
Changing consumer
behaviors
Offering accessible
infrastructure and
products
Enacting supportive
public policies and
regulatory practices
Changing consumer behavior begins with
building awareness…
Am I
interested in
it?
Is it relevant to
me?
Do I know
something about
it?
Do I know it
exists?
Can I access
it?
Should I try
it?
Will I
continue to
use it?
Does it
change
my life for
the
better?
…it is successful
when an
individual
connects that
behavior to an
improved life
Infrastructure, regulations are essential
Am I
interested in
it?
Is it relevant to
me?
Do I know
something about
it?
Do I know it
exists?
Can I access
it?
Should I try
it?
Will I
continue to
use it?
Does it
change
my life for
the
better?
It’s essential there is infrastructure and products
consumers can access and want to access
Policy and regulations also have to be conducive to
getting consumers banked, in addition to offering
consumer protection
Financial Inclusion Insights began with a desire
to change the world….
Several countries
Large samples
Rigorous methodology
Many questions
Multiple points in time
Comprehensive
analysis
Shared publicly
…and materialized into a multi-country, multi-year
strategic research program
Right now, we are standing in the middle of
active markets, witnessing change happen
Pakistan
Nigeria
A drive to push for a broader
range of digital financial
services
Market efforts to convert
awareness into usage of
financial service products
Bangladesh
India
Uganda
Partnerships between banks
and mobile money providers
bring new products to the
market
Market efforts to register
digital financial accounts
Government mandate
brings bank accounts to the
country in mass scale
Kenya
Advanced products
gain traction
Tanzania
Indonesia
Interoperability among providers
gains momentum, decreasing costs
and potentially driving growth
Government stakeholders
working to improve
regulatory environment
Financially included consumers are more likely
to have a financial plan
Percentage of consumers with a financial plan
(Shown: All consumers)
66%
62%
61%
59%
54%
53%
55%
47%
47%
43%
32%
32%
22%
Kenya
36%
29%
28%
23%
33% 32%
35%
29%
42%
38%
34%
30%
43%
38%
38% 38%
30%
24% 23%
Bangladesh
Below Poverty/Not Included
India
Indonesia
Below Poverty/Included
Tanzania
Uganda
Above Poverty/Not Included
Nigeria
Pakistan
Above Poverty/Included
(Financial inclusion can even neutralize the effects of poverty when it comes to planning)
Our measurement: tracking overall and
incremental movement
Mobile Money
Bank Accounts
Nonbank Financial
Institutions (NFIBs)
Use (accessed the
account)
Own (have a registered
account in own name)
Account has digital
access
Active use (used own
account in past 90 days)
Active use of digital
account
Types and frequency of
use
Reasons for not using
Financial Inclusion Indicator
Have an account that gives access to a full suite of
financial services, including savings facilities, through a
financial service provider
Active Use Indicator
PAKISTAN
ACCESS TO & USE OF FINANCIAL SERVICES
10
FII in Pakistan:
Conducted:
Wave 1: 2013
Population:
Pakistani adults across the country
Size:
6,000 interviews each wave at the individual level
Sample:
Nationally representative, drawn from 2011-12 national population projections
(projections based upon 1998 data)
Method:
In-person interviews, 60-90 minutes in length
Coverage:
Urban and rural strata in each of Pakistan’s four provinces, excluding Federally
Administered Tribal Areas (FATA), Gilgit Baltistan, and Azad Jammu Kashmir
•
•
•
•
Wave 2: 2014
Divided into 5,000 census-defined urban circles and 48,000 rural mouzas
Circles and mouzas selected proportionate to their population size
10 interviews conducted in each selected
Divided randomly between male and female interviewing teams
11
Only some Pakistanis use financial services
17.5%
have ever used a bank,
mobile money (MM)
account or NBFI.
15%
have ever used a
bank, mobile money
account, or both.
7%
are financially
included.
Source: InterMedia Pakistan FII Tracker survey (N=6,000, 15+) Wave 2, September-December 2014.
12
For the purposes of this study,
those with a fully serviced bank or
non-bank financial institution
account as well as registered
mobile money accounts are
considered financially included.
Use of financial services is higher in other
countries
Asia
Africa
Kenya
65%
Tanzania
Nigeria
Uganda
50%
44%
38%
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
13
54%
India
Bangladesh
Indonesia
7%
23%
37%
There are three distinct types of financial
services used
Access to financial services by type of financial institution
(Shown: Percentage of Pakistani adults, N=6,000)
Bank only
17.5%
have ever used a bank, mobile
money (MM) account or
NBFI.
6.8%
B&MM
1.5%
MM only
All
0.1%
B&NBFI
MM&NBFI
0.3%
0.3%
6.5%
NBFI* only
2.1%
*Nonbank financial institutions (NBFIs): All semi-formal and informal financial services, including MFIs, cooperatives, money guards, etc.
Due to rounding, numbers in the diagram add up to 17.6% rather than 17.5%.
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
14
PAKISTAN
MOBILE MONEY
15
Consumers are aware of mobile money brands,
mostly through exposure to advertisements
Source of awareness of mobile money (MM) services
(Shown: Multiple response, source of awareness for those who recognized at least
one brand, n=4,569)
76% through TV
34% through friends & family
76%
8%
have used mobile
money.
recognize at least
one mobile money
brand name
0.3%
27% through billboards
8% through radio
6% through newspapers
2% through workmates
have a mobile money
account.
1% through transactional MM agents
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
16
Telenor’s Easypaisa retains market dominance
from 2013
Mobile-money provider market share by wave
(Shown: Percentage of adults to ever use mobile money, by wave)
Telenor
Easypaisa
87%
86%
13%
UBL Omni
8%
Mobilink
Mobicash
8%
have used mobile
money
Ufone
9%
10%
5%
3%
Zong
Timepey
3%
2%
MCB Mobile
0.5%
0%
Mobile Paisa
NA
2%
HBL Express
NA
2%
Most users have only used one
mobile money provider (86% in
2013 vs. 89% in 2014).
2013 (n=428)
Active mobile-money account holders can have accounts with more than one provider.
Source: InterMedia Pakistan FII Tracker surveys (N=6,000, 15+) Wave 1, November 2013-January 2014; Wave 2, September-December 2014.
17
2014 (n=493)
Person-to-person transfers are the primary driver
and use of mobile money services
Top reasons for starting to use mobile money (MM)
Top uses for mobile
money
(Percentage of adults to ever use MM, n=493)
I had to receive money from another
person
48%
PERSON-TO-PERSON
(P2P) TRANSFERS
I had to send money to another
person
35%
PAY BILLS
I had to send money to an
organization/government agency
I had to receive money from an
organization/government agency
22%
9%
LOAN ACTIVITIES
3%
I wanted to start saving money with a
mobile money account
1%
Most of my friends/family members
are already using it
1%
MAKE PURCHASES AT
GROCERY OR RETAIL
STORE
Question allowed multiple responses.
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
18
60%
11%
2%
0%
20%
40%
60%
80%
Over-the-counter use continues to dominate the
market
Mobile money (MM) use
(Shown: Percentage of Pakistani adults, N=6,000)
[VALUE]*
[VALUE]*
7%
7%
0.4%
Ever used MM
OTC MM use
2013
Registered MM use
2014
*The differences between years are not statistically significant.
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
19
0.3%
0.4%
0.3%
Active registered MM account use
OTC users don’t feel a need to register for
wallets
Time taken to reach the nearest mobile money agent
Top reasons OTC users haven’t registered for an account
(Shown: Percentage of mobile money users, n=493)
87%
Can reach an agent in
30 minutes or less
Wave 1
(n=403)
%
Don’t need an account, I don’t
make any transactions
22%
I can get all the services I
need through an agent
31%
There is no POS agent near
where I live
17%
Don’t need an account, I don’t
make any transactions
15%
I can get all the services I
need through an agent
16%
I don’t understand the purpose
of this account
12%
I never have money to make
such a transaction
16%
I never have money to make
such a transaction
12%
I don’t have the necessary
forms of ID
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
20
7%
Wave 2
(n=474)
Using such an account is
difficult
%
8%
The closer a user lives to an agent, the higher the
use frequency
Percent of active mobile money users in relation to
distance from a mobile money agent
Active Lapsed
63%
37%
>5km
Active Lapsed
59%
41%
1km-5km
Active Lapsed
74%
26%
0.5km-1km
Active Lapsed
81%
<0.5km
Active mobile money users: registered users or OTC users who have used mobile money in the past 90
days. Lapsed users: individuals who have used a mobile money service, but not in the past 90 days.
Registered use remains too small to draw conclusions.
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
21
19%
PAKISTAN
BANKS
22
Most bank account users engage in at least one
advanced function
Top uses for active bank accounts
(n=391)
Basic Uses
93% Withdraw money
77% Deposit money
17% P2P transfers
• 96% have
engaged in at
least one basic
function.
Advanced Uses
Receive wages
Bill pay
Save/set aside money
Pay for goods at a…
Receive G2P payments
Loan activity
Insurance activity
*Make Bank2Bank
• On average, people engage in two advanced functions.
• 67% have engaged in at least one advanced function.
• 20% have engaged in three or more.
Question allowed multiple responses.
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
23
42%
19%
14%
14%
9%
6%
6%
*Make Bank2Bank/Bank2FI/
5%
Bank to MM transfer
Most bank account holders have digital access to
their accounts through multiple platforms
Digital access among bank account holders*
(Shown: Percentage of active bank account holders, n=391)
8%
Offers debit/ATM or
credit card
have a
bank
account
98% have digital
access
90%
Can transfer money
digitally
Can be accessed
via internet or
mobile
66%
39%
Digital bank accounts offer at least one of the
following options: debit/ATM or credit cards,
internet or mobile access, or a digital money
transfer capability.
*Question allowed multiple responses.
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
24
Many unbanked feel they lack money, need for an
account
Main reason for not having a bank account
(Shown: Percentage of unbanked, n=5,471)
I do not have money
92%
51%
I don't need one, I don't make
transactions
19%
I do not have money to make any
transactions with such accounts
8%
do not have a
bank account
8%
There are no banks close to
where I live
4%
I do not know what it is
4%
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
25
Of those who
do not have
money
• 46% indicate they at least
sometimes spend less than
they make each month.
• 23% have indicated their
savings are larger than their
debts.
PAKISTAN
NONBANK FINANCIAL INSTITUTIONS (NBFI)
26
NBFI users tend to be exclusive of bank users,
more female and less educated
Overlap in use of banks, NBFIs
Key Differences
(Shown: Percentage of adult Pakistanis, N=6,000)
82% Bank users are
men
66% NBFI users are
women
VS.
Bank only
8.2%
B&NBFI
NBFI only
0.4%
2.4%
90%
Literate
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
27
59%
Literate
NBFI use is usually through informal institutions
Use of specific NBFI
(Shown: Percentage of adults to ever use an NBFI, n=184)
ROSCA
3%
Of adults have used a
NBFI
1%
28%
Money guard
25%
Microfinance institution
25%
Hawla/ Hundi networks
14%
Post office bank
5%
Cooperative
1%
Savings collector
1%
Have an account with a NBFI
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
28
99% of NBFI
users have used
just one type of
NBFI.
PAKISTAN
NONUSERS OF FORMAL FINANCIAL SERVICES
29
Nonusers of formal financial services: Who are
they, where are they from and what do they
know?
56%
literate
69%
rural
52%
53%
female
below
poverty
85%
numerate
72%
Aware of at least one
mobile money provider
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
30
Nonusers end each month with little or no money
left to save, prepare for financial shocks
87%
77%
65%
54%
have debts
(formal and
informal)
that exceed
their savings
are unable to
earn more
than they
spend each
month
had no money
left over last
month after
paying all
expenses
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
31
did not have
an emergency
fund to cover
unplanned
expenses
Nonusers will save their money or pay bills if
they have money left over
Financial situation after previous month
(Shown: Percentage of nonusers, n=4,918)
What did you do with any money left over after
paying expenses last month?
(Shown: Percentage of persons who had surplus money
after paying all expenses in the prior month, n=653)
80%
Saving money
Repaying loans
87%
13%
Sending money to others
4%
Entertainment
4%
Investing
Money left over after all bills
No money left over after bills
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
32
7%
2%
Nonusers with mobile phones show competency
in using the devices
Access to mobile phone
No access
Mobile phone uses
(Shown: Percentage of nonusers with access to a mobile, n=3,318)
Ever do this
activity
32%
Nonusers with access
to a mobile
[VALU
E]
Among mobile users:
• Use devices for 3+ functions: 74%
• Used at least one advanced
function: 55%
Dial numbers on their phone
97%
Change settings on their phone (i.e., ringtone)
68%
Send/respond to text messages (SMS)
55%
Advanced Functions
Send picture messages
39%
Listen to audio they downloaded onto the phone
27%
Follow an interactive voice menu, voice commands
26%
Watch a video they downloaded onto the phone
25%
Follow a text menu such as for buying airtime
18%
Use social networks such as Facebook, Twitter
17%
Post pictures online, such as via Instagram
15%
Use a chat application such as WhatsApp or Viber
13%
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
33
However reading proficiency seems to be higher
in traditional Urdu than Romanized Urdu.
Reading ability with traditional vs. Romanized Urdu
(Shown: Percentage of nonusers, n=4,918)
Traditional Urdu
Romanized Urdu
32%
45%
55%
68%
Needed little or no
help reading
Needed a lot of help or
entirely dependent on help to read
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
34
Changing consumer behavior begins with
building awareness…
Am I
interested in
it?
Is it relevant to
me?
Do I know
something about
it?
Do I know it
exists?
Can I access
it?
Should I try
it?
Will I
continue to
use it?
Does it
change
my life for
the
better?
…it is successful
when an
individual
connects that
behavior to an
improved life
For more information, contact:
Nat Kretchun, FII Asia Lead
KretchunN@InterMedia.org
Imran Khan, FII Pakistan Manager
iKhan@InterMedia.org
Bank, mobile money users saw dramatic increases in
satisfaction with the financial products available to
them after first use
Bank account users’ rating of the financial products available to them
Prior to bank
account use
Now, given bank
3%
account use
50%
27%
12%
23%
85%
Poor
Average
Good
Mobile money users’ rating of the financial products available to them
Prior to mobile
money use
41%
32%
Now, given mobile1% 8%
money use
91%
Poor
Average
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
37
27%
Good
Many women are not permitted access to a
mobile phone, preventing them from using
mobile money – even if they wanted to
Mobile access among women who do not use financial services, across South Asia
Bangladesh
India
94%
25%
Pakistan
56%
Why don’t they have access to a mobile?
•
•
•
•
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
38
37% are not permitted to own one
36% don’t believe they need one
11% say a phone is too difficult to use
8% say phones are too expensive
Title
Mobile money awareness by brand
Poor nonusers
Easypaisa
61%
Mobilink
39%
Zong
31%
30%
Ufone
69%
28%
Mobile Paisa
23%
UBL
MCB
aware
Female nonusers
HBL
20%
12%
11%
Easypaisa
64%
Mobilink
36%
UBL
35%
26%
Ufone
65%
25%
Zong
24%
Mobile Paisa
aware
MCB
HBL
19%
12%
11%
Source: InterMedia Pakistan FII Tracker survey (N=6,000 15+) Wave 2, September-December 2014.
39
Gender gaps are barriers to DFS use -- even down
to the level of mobile phone ownership
Comparison by country: Mobile phone ownership
90%
85%
77%
71%
76%
68%
76%
70%
67%
56%
50%
77%
70%
46%
34%
Difference By
Gender
-5
-6
-8
-14
-17
-30
Nigeria
Kenya
Tanzania
Indonesia
Uganda
Bangladesh
(N=6,000)
(N=2,995)
(N=3,000)
Men
(N=6,000)
(N=3,001)
Women
(N=6,000)
29%
-36
-48
India
Pakistan
(N=45,087)
Gap
(N=6,000)