Embedded Finance - How Fintech Is Powering Innovations in Non-Finance Sectors of Pakistan

Abstract

This paper explores the rise of embedded finance and how financial technology (fintech) is enabling innovations in non-financial sectors in Pakistan. Embedded finance refers to the integration of financial services into non-financial environments. An exploratory qualitative methodology was utilized to review existing literature and develop research objectives to understand the landscape, opportunities and challenges of embedded finance in Pakistan. The key sectors identified to have potential for embedded finance include retail, agriculture, education and transportation amongst others. Key drivers enabling this include increased smartphone and internet penetration, supportive regulations and availability of venture capital for fintech startups. However, lack of financial inclusion and digital literacy are some barriers. Embedded finance presents an opportunity to drive financial access and inclusion in Pakistan’s largely unbanked population. Further research should focus on subsidiary sectors within key non-financial industries in Pakistan to identify lucrative opportunities for fintechs and avenues for public-private partnerships.

Keywords: embedded finance, fintech, financial access, financial inclusion, Pakistan