PM approves five-year National Financial Inclusion Strategy

ISLAMABAD: Prime Minister Imran Khan on Thursday approved a 5-year plan for enhanced National Financial Inclusion Strategy (NFIS) during a meeting held at the PM’s Office.

The meeting was attended by Minister for Finance Asad Umar, Adviser to the Prime Minister Dr Ishrat Hussain, finance secretary Arif Ahmed Khan, State Bank of Pakistan (SBP) Governor Tariq Bajwa and other senior government officials.

The National Financial Inclusion Strategy (NFIS) lays out the national vision, framework, action plan and targets for financial inclusion in the country.

The prime minister was informed that Pakistan had one of the lowest levels of financial inclusion until 2015 as only 16 percent of adult population had a bank account. The account ownership was even lower for women at 11 percent.

Besides, a large number of population remained voluntarily excluded due to their religious and other concerns.

It was informed that financing to priority sectors of economy i.e. agriculture, SMEs and housing have remained low due to less financial inclusion.

Tariq Bajwa while briefing the prime minister about the future strategy for the next five years said that enhancement of the usage of digital payments, deposit base, promotion of SMEs and agriculture finance and enhancement of share of Islamic Banking constituted main areas to broaden the existing levels of financial inclusion.

It is envisioned that the implementation of the five years plan would translate into creation of 3 million jobs and additional exports of US$ 5.5 billion through enhanced access to finance to SMEs. The plan also includes a strategy to increase the deposit base of banks to 55% of GDP and encourage higher savings.

The plan also envisages reduced income tax on income earned by commercial and microfinance banks on SMEs, Housing & underserved areas for priority sectors. The SBP Governor also presented a detailed road-map with delineated timelines against each target being set under the Five Years National Financial Inclusion Strategy.

The prime minister appreciated the efforts being made towards broadening financial inclusion. He said that access to finance is critical to achieve sustainable and inclusive economic growth being prerequisite for equitable distribution of economic opportunities, poverty reduction and achieving financial stability.

The PM said that the 5-years NFIS plan would facilitate citizens and the financial institutions, especially in priority sectors of economy, and would thus help realizing the huge potential that existed in SMEs, agriculture and Islamic banking sector.