Asian banks, including those in Pakistan, must balance financial inclusion goals with consumer empowerment and financial literacy initiatives, according to the latest scorecard by Fair Finance Asia (FFA).
The scorecard, titled Empowering Consumers as Drivers of Sustainability in Asia’s Financial Sector, benchmarks the policies of 15 banks across Pakistan, Cambodia, Indonesia, the Philippines, and Thailand in four key areas: financial inclusion, consumer protection, financial literacy, and engagement mechanisms.
In Pakistan, United Bank Limited (UBL), MCB Bank, and the National Bank of Pakistan (NBP) showed relatively strong performance in financial inclusion (6.7/10) and consumer protection (6.9/10).
However, they scored poorly in financial literacy (3.3/10) and engagement mechanisms (1.2/10), reflecting significant gaps in these areas.
The scorecard noted that while these banks offer products targeting unbanked or underbanked populations, they fail to disclose measurable targets for financial inclusion.
Additionally, none of the assessed banks publish measures to prevent over-indebtedness or provide mechanisms for consumers to file complaints about the environmental, social, and governance (ESG) impacts of financed projects.
The report also highlighted a lack of transparency regarding the companies and projects financed by UBL, MCB Bank, and NBP. It criticized the banks for not explaining how their sales staff or agents proactively communicate with consumers about sustainable finance products, indicating a disconnect between financial institutions and their stakeholders.
“Banks in Pakistan appear to prioritize profit over purpose, promoting financial products without fully considering their impact on individuals and society,” said Fair Finance Pakistan Country Programme Lead Asim Jaffry.
He urged banks to take more robust measures to empower consumers and protect environmental and social well-being.
