PAKISTAN

Pragmatic

Providers

present-minded, self-reliant, resilient

19% of adult population  |  24.5 million people

 

Pragmatic Providers are mostly middle to high SES, rural, married men who with primary or secondary education. Nearly all men in the segment identify as the primary decision maker in the household, whereas most women do not. They are Pakistan’s most infrequent savers and borrowers, but among its most financially resilient, relying slightly more heavily on personal financial reserves than social support in emergencies. They Like most Pakistanis, they mainly manage their money through family, but own and use formal accounts at relatively high rates for Pakistan. They have a strong sense of agency, but low self-esteem and are pessimistic about their future, taking an agnostic view towards financial planning. They are not deliberate in their savings and are not comfortable holding debt. They have low trust in people, and low to moderate trust in banks.

Pragmatic Providers

Pakistan Average

GENDER (MALE)

67%

49%

AGE (25-44)

59%

60%

GEOGRAPHY (RURAL)

60%

59%

SOCIOECONOMIC

49%

SES 4-5

FINANCIAL DECISIONS

myself

51%

38%

spouse or other people

42%

53%

EDUCATION

primary

27%

22%

secondary

35%

31%

PHONE

own smartphone

20%

19%

feature phone

58%

52%

LAND

own land

45%

30%

commonly own

24%

32%

FORMAL ACCOUNT

OWNERSHIP

18%

18%

INFORMAL

FINANCIAL USAGE

9%

15%

MOBILE WALLET

OWNERSHIP

8%

5%

TECH USE

(HIGH FREQUENCY)

46%

36%

 

DEMOGRAPHICS

Who are they?

“We don’t really dream big dreams, we are laborers.

We can only think about the day to day. I will not allow

my sons in the field. I will educate them and find them jobs.”

MALANG

SOCIOECONOMIC STATUS (SES)

Pragmatic Providers

Pakistan Average

Demographics


Most Pragmatic Providers are middle to high income, rural, married men who are slightly

better educated than the average Pakistani.

Most men in the segment identify as the primary decision maker in the household, whereas most women do not.

Social Network

Pragmatic Providers can draw on fewer people than average for support when ill, perhaps because many in their network look to them as providers and sources of support. Despite this, they are the most confident segment in their ability to raise emergency fund. More so than any other segment, Pragmatic Providers have relied on personal financial resources in recent emergencies, while fewer than average have relied on social sources. Their ability to rely on personal savings and assets may bolster their confidence, though their relative struggle to raise funds from social sources may work suppress their confidence and overall resilience. Though they are the most confident segment in their confidence to raise emergency funds, nearly half are not, reflecting the financial vulnerability amongst Pakistanis in general.

RESILIENCE: SOURCES OF MONEY IN AN EMERGENCY

Pragmatic Providers

Pakistan Average

ASPIRATIONS

What do they want?

Pragmatic Providers aspire to fulfill their roles as breadwinners

for their family, build social capital, and avoid reliance on personal networks for financial support and management. They struggle to

pay bills and face many financial emergencies. As such, they aspire

but struggle to build a savings cushion.

 
 

BEHAVIOR

How do they manage their finances?

“Whenever I have regular day labor, I become a member of a committee. When I have a good harvest, I buy livestock.

If I have cash, it will somehow be spent. I have livestock.

It will provide milk for the family and I can sell it if I need to.

MALANG

Financial Behavior Overview

Pragmatic Providers’ overall financial behavior is close to the Pakistani average, though they struggle with high income volatility and to make frequent savings.

BEHAVIORAL INDEX
FINANCIAL ACCESS

Pragmatic Providers

Pakistan Average

Financial Access

Pragmatic Providers primarily manage finances through family and are also among the most frequent formal account and mobile wallet owners and users in Pakistan, though overall rates are still low, especially compared to savings and borrowing rates with family. They are the least frequent members and users of informal financial groups.

Financial Priorities

Pragmatic Providers aspire to fulfill their roles as breadwinners for their family, build social capital, and avoid reliance on personal networks for financial support and management. They aspire but struggle to build a savings cushion. Given a windfall of money, Pragmatic Providers would keep most of it in cash or save it in a bank, more so than any other segment. They are less likely than average to invest it. This suggests they would prioritize short term liquidity to manage difficult expenses or long term savings to deal with unpredictable (and frequent) financial emergencies. They struggle to pay the second most types of expenses amongst segments (4.7, above the Pakistani average of 4.5). Moreover, as heads of household, they would share significantly more with friends and family.

HOW WINDFALL IS PRIORITIZED

Pragmatic Providers

Pakistan Average

HAS A PLAN TO MANAGE EXPENSES

Pragmatic Providers

Pakistan Average

Financial Plans

Pragmatic Providers are weaker than average planners across a number of metrics, with most taking an agnostic view towards planning. Just over a third consider themselves strong planners, and less than one third report having a plan to manage expenses. Most measure low conscientiousness, the lowest among segments, and most are not deliberate, goal-oriented savers. Given their high SES, relatively low-income volatility, and frequent role as head of household, they may feel they do not need to plan carefully. This is further evidenced by their, agnosticism towards impulsive spending, confidence in understanding financial services, and de-prioritization of windfall cash to investments. Their weak planning may, in part, contribute to their expense management challenges and frequent financial emergencies.

Shaping Income and Expenses

Pragmatic Providers income smoothing strategies are relatively effective compared to other segments, though not sufficient to consistently meet their daily needs in the face of persistent volatility and numerous emergencies. They struggle to meet expenses, and face the most types of financial emergencies of any segment. Their challenges may be compounded by their inconsistent expense planning.

INCOME VOLATILITY

Pragmatic Providers

Pakistan Average

SAVINGS FREQUENCY

Pragmatic Providers

Pakistan Average

Building Reserves

While most Pragmatic Providers save, almost half never do. They are the least frequent savers and use the fewest savings channels in Pakistan. Only one-fifth save frequently (monthly or more). When they do save, they most frequently keep money with family followed by banks. Nevertheless, they may have substantial financial reserves as evidenced by their strong reliance on personal sources for emergency funds, and relatively high confidence in their ability to raise emergency funds. One-fourth of the segment report owning livestock and nearly half personally own land, with a third having purchased it, the highest such rates of asset ownership amongst segments.

Cultivating Receivables 

Nearly two-thirds of Pragmatic Providers never borrow. They are the least frequent borrowers overall and have the fewest active borrowing channels among Pakistanis. Less than one-fifth are frequent borrowers (borrowing quarterly or more). Those borrow most commonly from family, but at the lowest rates of any segment. Banks, which they utilize at rates similar to Communal Elites, are their second most common source of loans. Pragmatic Providers seem to have a small and reliable social support network but may prefer to use it for business and education loans and support rather than emergencies. They rarely participate in informal financial groups and borrow from them even less frequently, perhaps reducing their ability to leverage land and livestock for loans.

BORROWING FREQUENCY

Pragmatic Providers

Pakistan Average

PHONE USAGE

Pragmatic Providers

Pakistan Average

Technology Usage

While most Pragmatic Providers are infrequent users of digital technology, their general tech usage and phone usage rates second highest after Communal Elites. Half use their phone and over a quarter text at least daily, suggesting they have at least baseline levels of digital literacy. Over two-thirds personally own feature phones and one-fourth own smartphones. They are the second most frequent users of the internet, social media, and digital accounts in general, though monthly usage rates of each remain in the single digits, aligned with Pakistani averages.

 

PSYCHOLOGY

How do they think?

"We are just earning to fill our bellies. I hope our children

will grow up, have jobs, and be free of all this. Our parents weren’t educated, we’re not educated, so our conditions are the same.

Our children will go to school, improvement will come."

MALANG

Self-perception

Pragmatic Providers enjoy, by far, the strongest sense of control over their lives and exhibit an above average belief in their own abilities. Despite their strong sense of agency, they report far lower than average self-esteem and have very low belief that they will be better off in the future. Their struggles to pay bills and frequent emergencies may, in part, drive this pessimism. Their low use rates of social financial tools may reflect a desire to keep their finances within their control and private, perhaps out of a sense of shame or fear of judgment.

LOCUS OF CONTROL

Pragmatic Providers

Pakistan Average

OPENNESS

Pragmatic Providers

Pakistan Average

Conscientiousness and Openness

Most Pragmatic Providers measure low conscientiousness, the lowest among Pakistanis, are agnostic when it comes to impulsive spending. These characteristics may, in part, drive their weak expense planning and low savings rates (see financial planning). Nearly two thirds measure low openness, perhaps suppressing their technology usage rates.

Attitude Towards Savings

Most Pragmatic Providers are not deliberate,

goal-oriented savers and just over a quarter feel they earn enough to save. About a third feel that their savings are safe from the claims of their network, while another third feel they are not. Their low savings deliberateness is in line with their low level of conscientiousness and general agnosticism toward financial planning and impulsive spending. These psychological characteristics help explain their overall low savings rate and especially low use of informal savings groups, which require consistent deposits and tend to be used for deliberate goals.

SAVINGS DELIBERATENESS

Pragmatic Providers

Pakistan Average

DEPENDABILITY

Pragmatic Providers

Pakistan Average

Attitude Towards Debt

Pragmatic Providers have the lowest comfort

with debt and feelings of dependability amongst segments, with most of the segment measuring low to the lowest levels for both variables.

These psychological traits may explain the low frequency of their borrowing, despite their high SES and above average access to formal financial services. In particular, they may fear damaging their relationships and status, as well as losing collateral, if they failed to repay informal or formal loans.

Trust in People

Pragmatic Providers have the lowest trust in people and second lowest trust in their social financial networks among Pakistanis, perhaps driving their low rates of informal group membership, and relatively low rates of saving and borrowing with family and friends. Unsurprisingly, less than half (below the national average) would rely on social sources of finance in an emergency, and most would not be confident in their networks willingness to support their business or education investments. Yet, they view their communities as the most equal.

BELIEF IN COMMUNITY SUPPORT
FOR BUSINESS AND SCHOOL FEES

Pragmatic Providers

Pakistan Average

TRUST IN BANKS

Pragmatic Providers

Pakistan Average

Trust in Institutions

Pragmatic Providers have lower than average trust in major institutions, including the second lowest trust in banks, media, and government. This may, in part, be due to their low respect for authority figures—lowest of all segments in Pakistan. Their low trust in banks may suppress their overall account ownership rates, which while high for Pakistan are low in absolute terms. However, once Pragmatic Providers own accounts, they use them at higher rates than Communal Elites who have the highest overall account ownership and higher trust in banks. This suggests that low trust does not, by itself, suppress usage rates for Pragmatic Providers who own accounts, and that the value proposition of banks to the segment is relatively strong, though banks appear to  struggle to break through to most of the segment.

Gender Attitudes

Less than half of Pragmatic Providers believe that men are better financial managers than women. However, only a quarter outright refute the notion. Relatively few (about half) believe that wives and husbands should know each other’s financial affairs and that girls and boys should be educated about money in the same way, suggesting the segment holds conservative views on women and finance.

MEN ARE BETTER FINANCIAL
MANAGERS THAN WOMEN

Pragmatic Providers

Pakistan Average

OPPORTUNITIES

How might we create tools that help Pragmatic Providers better plan for and manage expenses, especially in the

face of relatively frequent financial emergencies?

+

How might we create formal financial products that

build their confidence in the future to deepen usage, especially of savings and insurance products?

 
 

USER PROFILE

 

Malang

"We are just earning to fill our bellies. I hope our children will grow up, have jobs, and be free of all this. Our parents weren’t educated, we’re not educated,

so our conditions are the same. Our children will go

to school, improvement will come."

 

 

Malang is the eldest son of a family of bonded laborers who farm for a local politician who owns several hundred hectares of prime agricultural land in Sindh. Out of necessity, he went to work in the fields at a young age and to help his parents with their plot. Neither he nor any of his brothers and sisters ever went to school, and all are bonded-laborers for the same politician. He’s now a father of six, and has found himself in a similar situation to his parents — his earnings are tight and he struggles to provide for his family. Despite this, he is determined to get his children an education so they do not suffer the same fate he has.

USER INSIGHTS

Foundational Reserves Unlock

New Financial Strategies

Malang struggles to build and maintain financial reserves, whether in the form of savings or livestock. Healthcare costs in particular drain his resources and force him to liquidate savings to meet family needs. For this reason, he is unable to get ahead of bills, cover emergencies, and most importantly, make investments in his farming that could unlock greater productivity, higher profit margins, and freedom from his landlord.

 

Malang would benefit from products and services that enable him to put away small savings, while assisting with or allowing for his family’s access to basic and preventative health services or insurance products that could help mitigate the constraining impact of  sickness on his finances.

Opportunity: Health Savings

and Insurance Account

Malang currently saves in livestock or by keeping cash at home to cover needs as they arise. When he has extra money, he joins a ROSCA, but uses it inconsistently given his cash flow and expense challenges.

 

Malang needs a savings account suited specifically to the erratic nature of his cash flows and tailored to his family’s healthcare needs. A dedicated health savings account or one that combines general purpose savings with a low cost, basic health insurance policy, may resonate with burdened household heads like Gul.

 

 The Human Account is led, created and developed by Dalberg with Rockefeller Philanthropy Advisors, and funded by the Bill & Melinda Gates Foundation.

 

Local partners are Lagos Business School in Nigeria, Ashoka University in India, not-for-profit development finance company, Karandaaz in Pakistan, and research and advisory firm, Busara Center for Behavioral Economics in Kenya.