Econometric Study on Financial Inclusion in Pakistan

Introduction

This article summarizes an econometric study that examines the determinants of financial inclusion in Pakistan using logistic regression analysis.

Model Specification

The study uses a logistic regression model to analyze dichotomous outcomes. The model specification is:

• log(P(yi = 1) / (1 - P(yi = 1))) = β0 + β1Genderi + β2Agei + β3Educationi + β4Incomei + β5Employmenti + β6Locationi + εi

Dataset

The study uses the Global Findex 2021 dataset.

Key Findings

• Demographic Characteristics:
  • Average age of respondents: approximately 34 years.
  • Proportion of respondents with primary education: mean = 0.59 (a significant proportion).
  • Workforce participation rate: less than half (mean = 0.44).
  • Urban residence: majority of respondents (mean = 0.37).
• Financial Inclusion Metrics:
  • Account ownership: 24% of respondents.
  • Formal financial institution account holders: 19%.
  • Mobile money account users: 9%.
  • Digital financial service usage: relatively low.
  • Credit and debit card usage: minimal.

Conclusion

The study provides insights into the demographic characteristics of respondents in Pakistan and their level of financial inclusion. The results highlight areas where further research is needed to improve financial inclusion in Pakistan.