# Transforming lives through financial inclusion: A tale of two nations

By e&

In recent years, both Pakistan and Egypt have made significant strides towards improving financial inclusion, with innovative solutions reshaping the economic landscape and fostering opportunities. As these initiatives unfold, the emergence of localised solutions lays the foundation for economic empowerment and lasting positive impact.


## Giving people in Pakistan the credit they deserve

Financial inclusion in Pakistan remains limited, with a significant portion of the population unbanked. However, digital banking initiatives, government policies and financial sector initiatives are slowly improving access to financial services. Bagh City, located in Azad Kashmir, is a prime example of this shift. Like many rural regions in Pakistan, the city has historically faced limited access to capital, but with the introduction of new financial tools, entrepreneurs are beginning to find the resources they need to thrive.Once a humble street vendor in Bagh City, Hafeez peddled fruits and vegetables door to door, his dreams as modest as his means. Yet, through sheer determination, he amassed enough to rent a vehicle, propelling his small business to new heights. Owning a vehicle transformed his trade, multiplying his sales. Still, rental fees were high and depleted his earnings. This is when he heard about e&’s microfinance business in Pakistan – U Microfinance Bank (U Bank).


## U Bank plays a critical role in implementing Pakistan’s National Financial Inclusion Strategy which aims to bring 50 per cent of the country’s adult population into the banking net.

At the time of publication of this article, U Bank had swiftly grown its loan portfolio by 5x in five years, serving over five million depositors and more than 400,000 loan clients through its 300+ branches in mostly rural areas.U Bank empowers micro-enterprise owners like Hafeez with access to safe and affordable formal financial services. Despite being unbanked, he was able to secure financing for a vehicle. With a repayment plan that fitted his circumstances, the financing from U Bank cleared the way to vehicle ownership and circumvented risks of predatory lending and exploitation. Now, as his venture flourishes, Hafeez eyes a second vehicle, poised to broaden his reach and his dreams.Pakistan has a large unbanked population, with an estimated 70 per cent of its 240 million people lacking access to financial services due to various socio-economic barriers. However, the situation is improving as digital technologies and mobile banking gain traction. U Bank is at the forefront of this change, providing accessible financial services to the underserved and unbanked population. By offering microloans, savings programmes, and other banking services, U Bank is helping bridge the financial inclusion gap, fostering economic empowerment and growth.


## The power of partnerships in Egypt

Mobile networks, banks, and fintechs have formed powerful partnerships to drive financial inclusion by leveraging each other's strengths. Egypt offers a prime example of the dynamics at work.One year ago, Etisalat by e& Egypt and The Sovereign Fund of Egypt (TSFE) launched Erada Microfinance to provide access to a wide range of financial services to MSMEs. The partnership is in line with Egypt’s Vision 2030 of supporting financial inclusion and creating opportunities for the youth by providing innovative financial services and digitally enabled lending products.By leveraging digital technologies, Erada streamlines loan application processes, disburses funds digitally and facilitates repayments for underbanked Egyptians. At the time of writing, Erada had served more than 25,000 clients and approved close to EGP 750 million in loans in less than a year of commercial operations.One client is Umm (‘mother of’) Omar, a seamstress who sought financing from Erada to purchase a new sewing machine. With Erada's help, she not only acquired the key tool for her business but also employed her niece, providing her with an opportunity to help a relative earn a living and serve a larger customer base.Thanks to her hard work and Erada's financing, Umm Omar's children have completed their education and started their careers. She continues to pursue her passion for sewing, and now offers repayment plans to customers in need, contributing to their financial security. Umm Omar's next goal is to acquire a new sewing machine that will improve her craft.These stories form part of the broader work e& does to ensure a better society and future. The group has pledged to invest USD 6 billion between 2024 and 2026 to provide affordable, accessible digital network access and services across the Middle East, Africa, and Asia. As a member of the EDISON Alliance, e& has reinforced its commitment to impact the lives of 30 million people by 2025 through improved network access, financial services, and technology education.