FINTECH EXPANSION AND FINANCIAL INCLUSION: EVIDENCE FROM PAKISTAN

Abstract

Despite recent advancements in the digital financial ecosystem, Pakistan has one of the largest unbanked populations in the world with millions of adults lacking access to formal financial services. The burgeoning growth of financial technology (fintech) - including mobile wallets, branchless banking, real-time payments, and online credit - offers a potential game-changer in extending financial inclusion. Our study adopts a qualitative approach to understand the nexus between fintech growth and financial inclusion in Pakistan. This study has used semi-structured interviews with 10 respondents (fintech users, fintech service providers and policy experts) selected purposively. Policy documents and reports on the fintech sector were analysed to triangulate the data. Thematic analysis identified five key enabling factors including: digital accessibility, trust and security, affordability, regulatory support, and digital literacy. The study shows that while fintech has substantially increased financial inclusion, particularly with Raast, JazzCash and Easypaisa, there are still significant barriers to further inclusion due to deficiencies in infrastructure, digital literacy, gender equality, and trust. This research adds to the growing literature on fintech for financial inclusion in emerging markets and provides policy insights in line with Pakistan's National Financial Inclusion Strategy (NFIS) 2024-28.