The fourth wave of the global Findex survey was released last week by the World Bank to much anticipation and suspense. Unlike previous rounds which were released every third year, this fourth dataset has been unveiled after a gap of four years; an unusual delay caused by the onset of the global pandemic in 2020.

For those who may not be aware, the Findex provides the single largest comparable dataset measuring progress on key financial inclusion metrics across 124 countries. Its wide-ranging acceptability was demonstrated at the launch of this latest edition with a high-profile panel discussion moderated by David Malpass, President of the World Bank and a keynote address by HM Queen Maxima of the Netherlands, who is the UN Secretary-General’s Special Advocate for Inclusive Finance for Development.

Headline findings show significant global progress on financial inclusion: Worldwide account ownership increased to 76 per cent from 51pc since 2011. Significantly, the survey also reports a narrowing gender gap (from 9 percentage points to 6) in account ownership.

Survey findings reveal an increase in the proportion of adults opting to place their savings with a formal financial institution, averaging 58pc of all adults in high-income economies and 25pc in developing economies. In addition to these top-line numbers, survey findings show significant momentum in the uptake of digital financial services, driven during these last four years largely by the pandemic.

Despite notable progress, gaps persist for financial inclusion relative to peer countries

Individuals in developing countries receiving digital payments directly into their accounts increased from 35pc in 2014 to 57pc in 2021. For developing countries (excluding China), 40pc of adults who made digital merchant payments did so for the first time after the start of the pandemic.

The survey also provides insights on quick wins and persisting gaps. This wave estimates that 39pc of adults opened their first account specifically to receive a wage payment or receive money from the government. Digitising government payments, especially, have yielded wide-ranging benefits: the report states that a 47pc reduction in internal fraud and leakage from pension payments was observed in India after these payments were disbursed via biometric smart cards instead of in cash.

While recipients benefited by receiving more money because of reduced fraud, the government saved millions of dollars annually in administrative costs.

The Findex report also discloses that 11pc of surveyed adults received payments for the sale of agricultural products but only one-fourth of this respondent group received payment into an account. In South Asia, only 2pc of adults selling agri produce received such payment into an account.

In contrast, several countries in Sub-Saharan Africa saw a much higher share of recipients receiving agricultural payments into accounts, including 63pc in Kenya, 39pc in Mali and 35pc in Uganda ie, more than 10pc of all adults in each of these three countries (most often into a mobile money account).

The survey also reveals that two-thirds of unbanked adults said that if they opened an account (excluding mobile money) at a financial institution, they could not use it without help. Women are 7 percentage points more likely than men to need help using their mobile money account.

Thus, as substantial progress has been achieved against topline metrics, several countries have succeeded in establishing a bedrock from which additional benefits (simultaneous use of multiple financial services, more people opting to place savings in formal financial institutions, improved cash management, etc) are already emerging.

With these achievements, the recommendations accompanying this edition indicate a heightened focus on consumer education, awareness raising and protection to ensure that the momentum is not only sustained but remains intact with a focus on building customer wellbeing via a more nuanced approach to financial inclusion.

Delving deeper into the report, numerous Pakistan-specific findings are also available, a number of which are rather humbling. Although an increase of 10 percentage points has occurred over the last decade in account ownership (up to 21pc from 11pc in 2011), the number signals a still-faraway-goalpost, when benchmarked to the average of 71pc for developing countries.

Improvement is also evident in the financial inclusion of women, which has increased to 13pc from 6pc in 2017, but when viewed against the estimates for our neighbours (Bangladesh at 43pc, India at 78pc, Sri Lanka at 89pc and Nepal at 50pc, the progress again seems lacklustre.

A double-digit gender gap in account ownership still persists in Pakistan, with no difference in the proportion of male and female account ownership reported for both India and Sri Lanka.

To enable deeper insight into the issues that continue to plague financial inclusion in Pakistan, Karandaaz is in the process of developing a multidimensional index on Financial Inclusion and will also be undertaking in 2022 the seventh edition of a survey on the subject which will provide additional statistics on provincial level gaps.

There is no doubt about the persisting gaps in financial inclusion in Pakistan. Not only is Pakistan lagging behind global and regional averages, but also against self-selected targets specified under the National Financial Inclusion Strategy (NFIS).

The updated NFIS targets the achievement of 50pc financial inclusion by 2023 driven by the enhanced use of digital payments, digitisation of all government-to-person payments and receipts, an enhanced GDP-to-deposit ratio of 55pc and extending enhanced financing to small and medium enterprises (700,000) and farmers (6 million farmers).

The NFIS also estimated that achievement of these targets would yield benefits in the form of 3m additional jobs and $5.5 billion in export earnings via SMEs — both of which constitute a dire need in the current economic scenario.

The Findex serves as a powerful reminder of the persisting gaps against these targets and the need to keep financial inclusion front and centre in public policy. It also provides a wealth of information on regions and countries that can be studied more carefully to see how progress was achieved.

It is hoped all relevant stakeholders will take note of these statistics and pour their energies into fixing the issues, rather than contesting numbers we do not like.

The author is the Director Knowledge, Management & Communications at Karandaaz Pakistan

Published in Dawn, The Business and Finance Weekly, July 25th, 2022