Pandemic along with government-led initiatives are fuelling the growth of the digital financial ecosystem of Pakistan. Currently, more than 58 million citizens have a mobile wallet. For the proper development of this ecosystem, it is essential to ensure higher digital financial literacy will improve the penetration of smartphones and the internet. In addition, the start-ups working on the digital financial ecosystem should be provided with a helping hand to get funding. Thankfully, Covid-19 acted as a catalyst for Pakistan to grow the digital financial ecosystem like many other countries.
Growth Of Digital Financial Ecosystem
The internet penetration in Pakistan has increased. Along with that, internet speed has shown improvement too. You can check your current internet speed on Speed Test. If you have a decent internet speed which can be verified on PTLC, you can also become a part of the digital financial ecosystem too. This internet and smartphone penetration improvement has increased mobile banking and internet banking transactions. According to reports, mobile banking transactions witnessed a growth of 102% during the pandemic and the growth rate of internet banking transactions was 42%.
Many fintech companies in Pakistan believe that the spread of pandemics resulted in better fintech adoption. Fintech was generally used for completing bill payments, doing e-commerce shopping and top-ups of mobile. However, there is a huge section of people without a bank account. In other words, the potential for fintech is currently massive in the country.
Government Is Promoting Financial Literacy
The government of Pakistan realizes the importance of financial literacy in the country. As a step towards it, the State Bank of Pakistan has released a set of videos for agricultural finance products and procedures. The content of the same is available both in national and regional languages. The videos will especially prove useful for the country’s underserved areas.
The videos will be officially distributed through different social media platforms along with the bank’s digital platform. Providing formal financial services to the farming community has been challenging for Pakistan for many years. With this awareness campaign, the government is trying to help the farming community to achieve formal financial service.
Government Is Harnessing The Power Of Digital Media
Pakistan has shown a huge improvement in increasing internet and smartphone penetration. This presents a huge opportunity for the government to disseminate information on digital platforms.
The conventional way of disseminating information is not very successful, considering the fact that it has limited outreach. This problem is easily overcome through digital media. Digital media not only has a better outreach but also is a cost-effective way to run an awareness program. The government is trying to use this digital media feature to reach a wider audience. In addition, with easy-to-understand videos, it is expected that both the comprehension and retention rate will be high.
How Is The Government Helping The Farming Community?
State Bank Of Pakistan has released a series of videos that touches on farmers’ different elements of digital finance. For instance, the first video deals with the topic of the agricultural financing landscape of Pakistan. In addition, it also covers the different schemes and initiatives of the government and the bank from the farmers’ perspective.
The videos are available in three regional languages in addition to Urdu. The regional languages used for creating the videos are Sindhi, Pashto and Balochi. With these videos, the government hopes that the farming community will now actively avail credit from banks for their growth.
Importance Of Digital Financial Literacy
Digital financial literacy is important to develop an inclusive space in the country’s finance sector. If used rightly, it has the potential to make financial services available for all. Further, it is also helpful to bring the excluded and the underserved poor people to the primary financial ecosystem. It also has the potential to bring informal cash-based transactions into formal financial services.
Further, digital financial literacy will give citizens access to formal financial services. It also reduces the risk of losing money to different financial crimes, especially when dealing with cash-based transactions. On top of it, digital financial literacy can promote economic empowerment amongst the people; especially for the women of the country. However, the risk is high even in the digital space; therefore, to ensure it only benefits the people, it is a must to ensure digital financial literacy.
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