The State Bank of Pakistan (SBP) has taken a significant step to assess and enhance financial inclusion in the country by launching the Pakistan Financial Inclusion Index (P-FII). This groundbreaking initiative is designed to measure how effectively financial services are reaching the population, and it evaluates not just access but also usage and quality.
According to the latest results, the overall financial inclusion in Pakistan stood at 58.1 in 2024, reflecting the country’s progress while highlighting areas that require focused improvements.
Understanding the Pakistan Financial Inclusion Index (P-FII)
The P-FII is a comprehensive tool developed to provide a detailed view of financial inclusion in Pakistan. Unlike traditional measures, it does not simply track the number of bank accounts; it examines the entire ecosystem of financial services.
- The index is based on 69 different indicators covering:
- Banking services
- Non-banking financial services
- Digital payment platforms
- It evaluates three key dimensions:
- Access – How easily people can reach financial services
- Usage – How frequently financial services are used
- Quality – The effectiveness and reliability of financial services
By combining these dimensions, SBP aims to gain a holistic understanding of financial inclusion in Pakistan and ensure policies are data-driven and targeted.
Why Financial Inclusion Matters
Financial inclusion is crucial for economic growth and social development. When more people have access to financial services, it can:
- Promote entrepreneurship by providing loans and credit
- Enable savings and investments for long-term financial security
- Improve access to insurance and risk management tools
- Support digital payments, reducing dependency on cash
SBP’s focus on measuring the quality of financial services ensures that inclusion is not just about numbers but meaningful access that positively impacts lives.
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How SBP Developed the P-FII
The creation of the P-FII involved careful research and collaboration:
- Research & Benchmarking:
- SBP conducted a detailed study of methodologies used by central banks and international organizations.
- Each of the 69 indicators was benchmarked against target values for 2030, ensuring alignment with global best practices.
- Stakeholder Consultations:
- Discussions were held with domestic and international experts, financial institutions, and policymakers.
- Feedback from these consultations helped refine the methodology and ensure relevance to Pakistan’s financial landscape.
- Integration with National Strategy:
- The P-FII complements SBP’s National Financial Inclusion Strategy (NFIS) 2024–28, which aims to expand financial access and improve service quality.
Key Findings of the P-FII 2024
The P-FII 2024 highlights Pakistan’s financial inclusion status while identifying gaps for improvement:
- Overall Financial Inclusion Score: 58.1
- Strong Areas:
- Expansion of digital banking and payment services
- Growth in banking infrastructure in urban centers
- Areas Needing Attention:
- Financial service outreach in rural areas
- Increasing usage and adoption of non-banking financial products
Table: Key Indicators and Their Focus Areas
| Indicator Category | Focus Area | Purpose |
|---|---|---|
| Banking Services | Bank branches, ATMs, account ownership | Access to formal banking |
| Non-Banking Financial Services | Microfinance, insurance, credit unions | Expanding financial safety nets |
| Digital Payment Services | Mobile wallets, online transactions | Increasing ease and speed of transactions |
| Quality of Services | Customer satisfaction, service reliability | Ensuring effective and reliable services |
Future Plans and Impact
SBP plans to release the P-FII annually, allowing policymakers to:
- Track progress toward financial inclusion goals
- Design evidence-based policies to address gaps
- Encourage financial institutions to improve service delivery
The index also serves as a benchmark for international comparisons, positioning Pakistan alongside countries that actively monitor and enhance financial inclusion.
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Conclusion
The launch of the Pakistan Financial Inclusion Index (P-FII) marks a significant milestone in Pakistan’s financial sector. By combining access, usage, and quality, the index provides a comprehensive picture of financial inclusion.
SBP’s commitment to data-driven policy, international standards, and continuous monitoring ensures that financial services can reach more Pakistanis, improving economic opportunities and social development. The P-FII not only measures inclusion but also acts as a roadmap for building a more equitable financial ecosystem in Pakistan.