Mobile Banking and Financial Inclusion: A Potential Catalyst for Growth in Pakistan

Abstract

The recent studies are examining how mobile banking can help enhance financial inclusion and even economic empowerment of Pakistan particularly in rural environment. Mobile banking is now a significant tool in ensuring the bridge of financial inclusion, especially in the remote marketes where credit coverage to traditional banking service is limited. The study examines an adoption trend of mobile banking, financial accessibility in an attempt to determine its effect on the economic behavior of the users through a coded survey among urban and rural population in Pakistan in an attempt to get a deep-seated explanation of the penetration and adoption pattern of mobile banking. The results indicate that mobile banking contributes a lot to the access of savings, credit, insurance services mainly in the rural area where the conclusion can be made that the traditional banking infrastructures are not accessible in most areas. Additionally, there are increased financial behaviors of utility of mobile banking; improved savings, improved credit access, and increased business investments. Despite the above benefits as it has been indicated, the study has its challenges that will most likely make it difficult in broader adoption among the rural community that could include digital literacy, connectivity and security concerns. According to the results, another concern that should be addressed by policy makers, as well as financial institutions, is the need to improve digital literacy, Internet infrastructure and regulatory policies to enable the abilities of mobile banking regarding their financial inclusivity and economic enabling capabilities.