For the average Pakistani household, loans are becoming a replacement for insurance

In 2014 only 7% of Pakistanis had access to financial institutions. In the decade since that number has gone up to 35%. On the surface this is a massive shift. It means Pakistanis have been signing up for financial services in the droves. 

Why does this matter? Because access to financial services is a cornerstone of any growing economy. Access to capital is the basic building block of any developing economy. But Pakistan’s financial inclusion revolution harbours a secret. According to the Karandaz Financial Inclusion Survey 2024, Pakistanis have had increasing access to credit in recent years. But what is this credit used for? 

K-FIS data shows that one in four adults reported they needed credit in the past year and when asked the reason, the responses pointed more towards survival than growth. The reasons range from health shocks, emergencies and family obligations. 

Weddings and funerals also appear in the same sentence as medical bills as central reasons for borrowing.