The move to launch the Pakistan Financial Inclusion and Infrastructure Project, the latest in a series to promote financial inclusion, will help spur economic growth.

With $130m financial assistance expected from the World Bank, the project will be implemented by Pakistan Microfinance Investment Company (PMIC), Central Directorate of National Savings (CDNS) and the SBP’s Development Finance Group.

It will provide households and businesses better access to financial services through improved digital payments, according to media reports.

The project development agencies “will focus on development of the market infrastructure and the ecosystem that will facilitate access to, and usage of, digital payments and financial services.”

PMIC would ensure the channelling of adequate funds to microfinance banks and institutions and CDNS would roll out new products to attract small savers. The SBP would keep an eye over whether banks and other financial institutions are reaching out to the maximum number of small borrowers in the agriculture, SME, microfinance and housing sectors.

Despite some progress made between 2008 (when financial inclusion got the policy impetus) and 2015, there are lots of things to do to give households and businesses greater access to financial services.

Overall financial inclusion, which is defined as access of households to formal financial services, rose to 23pc in 2015 from 12pc in 2008. Similarly, 16pc of the country’s adult population had access to bank accounts including mobile wallets in 2015, up from 11pc in 2008. More importantly, only 4pc of women had access to formal finance in 2008, but now about three times more women (11pc) have access to this facility.

In the area of branchless banking which is a big vehicle for financial inclusion, around 34m mobile wallet accounts were opened by the end of 2015 and 38pc of them belonged to women. The number of transactions in branchless banking now stands at 118m as of June 2016.

But considering the National Financial Inclusion Strategy aims at boosting the access to bank accounts for 50pc of the adult population by 2020, financial inclusion is still not strong enough to meet the target. Analysts say discrimination in delivery, lack of full awareness, complex products and price barriers (due to market imperfection) are some key roadblocks to faster financial inclusion.

“Policymakers must also have the ability to identify, and the nerves to deal with, the forces that continue to undermine the push and drive for financial inclusion,” says a former deputy governor of the SBP.

“When we see heartening data on women getting micro loans, are we sure these loans are actually utilised by them? Or when we are told the number of bank accounts is growing, do we know whether the incremental accounts are in the name of hitherto unbanked people and businesses?” So, a deeper analysis of facts is warranted.

Actual resistance to financial inclusion comes from powerful and well-connected tax-dodgers and money launders who are steering the black and grey economy and who are responsible for promoting parallel banking. “They resist financial inclusion moves.”

In view of the central bank’s recent backtracking on real estate sector documentation, a general go-easy attitude in documenting other sectors of the economy or promoting a direct taxation culture and tackling corruption continues to frustrate the financial inclusion drive.

Central bankers say such an attitude contributes towards keeping ‘voluntary exclusion from the financial system intact’, besides fuelling growth of informal economy which, in turn, encourages such exclusion.

Published in Dawn, Business & Finance weekly, February 13th, 2017