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Towards An Inclusive Financial Sector

The world is progressing at a very fast pace. One of the most challenging issues confronting emerging economies as they pursue economic growth and development is how to combat financial concerns, especially poverty.

The world is progressing at a very fast pace. One of the most challenging issues confronting emerging economies as they pursue economic growth and development is how to combat financial concerns, especially poverty. Established countries often face dilemmas in developing formidable growth strategies because they lack sufficient understanding in making a solid financial plan that would reduce poverty. That’s true!

 

The bottom line is that most impoverished people throughout the world continue to lack access to sustainable financial services such as credit, savings, insurance, and so on. Whereas financial services are only provided to a minority of the population in most developing nations, including Pakistan. The majority do not have a bank account, a credit card, or an insurance policy, and they are not familiar with financial institution's payment or transfer procedures. We can empower many individuals economically and socially by giving them access to a well-functioning financial system.

 

We must work together to create an inclusive financial industry that helps people improve their lives. The introduction of Microfinance has made it possible for people with lower incomes to access financial services and establish their credibility. Furthermore, as the tech and information sector experiences more innovations, the disparity between supplying the elite and poorer sectors of the market narrows. 

 

To move forward, government institutions play an essential role in developing an inclusive financial sector; nevertheless, this role must be supportive, since government interventions can be regressive and hamper financial sector growth at times owing to instability within the institutions. But we must not forget that a country-level policy framework with a clear goal should be established. If we talk about Pakistan, the government's efforts to encourage microfinance are praiseworthy and have resulted in the industry growing by leaps and bounds. Despite this recent increase in microfinance institutions and consumers, there remains a largely untapped market with enormous potential.

 

It is critical that the goals of improving access to financial services for the poor be incorporated in the central bank's regulatory and supervisory guidelines, in addition to the conventional role of protecting depositors and the financial system's stability. The inclusive financial sector is a significant challenge that necessitates a well-thought-out action plan that includes a consultative process at the national level involving all stakeholders as well as learning from best practices and experiences, consultative forums, seminars, and conferences so that we can develop a cohesive strategy that addresses the concerns of all stakeholders and has ownership.

 

It is envisaged that the government would continue to play a catalytic role while donors, corporate investors, civil society institutions, and development organizations take advantage of and make a sustainable contribution to poverty reduction and sustain crucial finance practices. Finally, all efforts should aim to promote equitable financial sector growth, which will expand access, create financial assets, and improve the lives of millions of people that are now excluded from economic opportunity. Only then we would be able to drive our nation towards a formidable financial awareness and inclusion. 

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