At the Pakistan Banking Summit 2025, Governor of the State Bank of Pakistan (SBP), Mr. Jameel Ahmad, emphasized the urgent need for the country’s banking sector to harness advanced technology to foster significant financial deepening. He highlighted that no nation can achieve sustainable economic growth without expanding private credit levels. In his speech, the Governor called for a reevaluation of the banking industry’s current business model, urging banks to adopt a more active role in financial intermediation and reshape their priorities to better serve the broader economy.
Mr. Ahmad outlined that SBP’s Strategic Vision 2028 is centered around promoting inclusive and sustainable access to financial services. The vision also focuses on creating a robust, innovative, and inclusive digital financial ecosystem, which would enhance the efficiency, fairness, and stability of Pakistan’s financial system. He highlighted the recent inclusion of financial inclusion as a core function of the SBP in the amended SBP Act, underscoring the critical role of financial access in the country’s economic development.
Reflecting on the progress made in financial inclusion over the past decade, the Governor noted that bank account coverage has increased significantly, reaching nearly 64% of the adult population from just 47% in 2018. Additionally, the gender gap in banking services has narrowed from 47% to 34%, marking a notable achievement. He referred to the latest National Financial Inclusion Strategy 2024-2028, which sets ambitious targets for the coming years. By 2028, SBP aims to expand bank account coverage to 75% of the adult population and reduce the gender gap in financial inclusion to 25%. These targets underscore the importance of deepening, broadening, and improving the quality of financial services, especially for low-income individuals, the microfinance sector, small and medium-sized enterprises (SMEs), and the agriculture sector.
Mr. Ahmad recognized the crucial role of the banking and financial system in Pakistan’s economic development. However, he pointed out that for the country to achieve more inclusive and sustainable economic growth, a considerable increase in the depth and breadth of the financial sector is required. Currently, around 74% of banks’ lending portfolios are concentrated in established corporates, with only 5% allocated to SMEs. The Governor called on banks to reassess their business strategies to focus more on mobilizing deposits and increasing credit to underserved sectors, particularly SMEs and agriculture, which are pivotal to the country’s economic development.
In addition to financial deepening, Governor Ahmad stressed the need for the banking sector to embrace technology, particularly artificial intelligence (AI), to improve financial inclusion. He urged banks to use alternative data sources, such as cellular and satellite data, to offer cost-effective delivery channels for financial services. These technologies, he noted, could significantly improve access to financial services for SMEs, the agriculture sector, and women, particularly in rural and underserved regions. Furthermore, he emphasized the importance of promoting digital transactional access for businesses, urging financial institutions to support businesses in digitizing their payments, preferably through secure portals.
Addressing climate change, Governor Ahmad called on financial institutions to enhance their ability to assess the impact of climate change across various risk categories, including credit, market, liquidity, and operational risks. He stressed that addressing sustainability challenges requires collaborative efforts from businesses, academia, and policymakers to drive research, develop actionable policy recommendations, and foster partnerships.
Mr. Ahmad concluded by expressing hope that the discussions at the Pakistan Banking Summit would spark innovative ideas and foster collaborations that could guide the country toward a more sustainable and equitable future. By leveraging technology and improving financial services, Pakistan’s banking sector can play a pivotal role in driving economic growth, financial inclusion, and climate resilience.