Financial inclusion is a key element that can lead to sustainable and inclusive growth in Pakistan. It can be defined as “the use of services (formal services) by the poor individuals” the shreds of observation such as Pakistan’s business news reveal that Pakistan stands in the line of highly financial exclusive countries.
The financial economies report shows that Pakistan has the minimum percentage of people holding bank accounts, particularly among not only the developing nations but all around the world as well. Extensive strategies have been made to address this problem by introducing Asian mobile accounts and their extended apps that help to resolve a lot of problems of the users.
A lot of initiatives also have been implemented, such as encouraged the stakeholders and the regulatory bodies to play their role in growing the financial inclusion state by stepping up. For example, starting a new Pakistani startup.
Role of the Digital Banking in Financial Inclusion
Digital banking is doing all the traditional activities online that need your physical presence in the bank, like transferring money, withdrawing, checking and saving account activities, etc.
Digital banking plays an important role in the growth of financial inclusion. Digital banking has been increased in the past few years but more specifically during COVID 19 pandemic. Not only the use of mobile wallets, e.g., Easypaisa, Jazz Cash, etc., but also digital banking has also been gradually increased in this pandemic.
The digital banking allows users convenient, easy, and secure solution of their problems related to the transaction, bill payments, and many other facilities.
Financial Inclusion During the COVID 19 pandemic
Financial Inclusion in the COVID 19 pandemic has been increased incredibly. The statistics reveal that the registered banking users grew up from 5 million to 8.2 million by the 3rd quarter of 2020. Also, mobile money account ownership has been increased.
From the survey, it has also been revealed that the generally monetary incorporation proportion in the nation has expanded from 14% to 21% in 2020.
The recent reports highlight the growth of digital banking through mobile accounts is very important for growing financial inclusion in the country.
Digital finance and Financial Inclusion
To reduce the poverty level, World Bank takes the initiative in the developing countries having emerging economies for increased financial inclusion. A lot of issues persist, but if these digital finance issues are resolved, then an emerging and developing economy can be established that can promote greater financial inclusion.
Digital Finance and digital banking benefits
Digital finance and digital banking can provide a lot of benefits that can help to significantly increase financial access.
- Digital finance can lead the way to the expansion of financial services in the non-financial sectors.
- In developing countries, affordable, suitable, and secure banking services for poor individuals can be provided through two, digital finance. It allows millions of poor customers to move from ash-based transactions to formal financial services.
- Digital banking also allows the users to transact locally in irregular and tiny amounts.
- It provides reduces the risks of financial crimes, loss, and theft that are usually faced during cash-based transactions.
- Three, digital finance assure to uplift the Gross Domestic Product (GDP).
- Digital finance and digital banking are helpful to promote economic empowerment that is ultimately important for the growth of financial inclusion.
Efforts made by digital banking and mobile wallet services have solved a lot of issues that strides towards financial inclusion in Pakistan. But the major issue is that not only the Pakistani economy but the worldwide economies rely on currency notes for major transactions. Thus, this issue should be addressed so that sustainable and increased financial inclusion can be achieved.