global segmentation framework - karandaaz pakistan...this allows the fsp to design products and...

Global Segmentation FrameworkPAKISTAN / SEPTEMBER 2018

ContentsApproach & Research 3

Segment Overview 18

Careful Hustlers 21

Pragmatic Providers 63

Modest Upholders 104

Communal Elites 142

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Approach and Research

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• Evidence of failure from non-solution-led approaches• While these variables are easy to identify, they can

overlook important patterns which would help target consumers more effectively

• Few actors combine different types of variables to develop a more complete picture of their current and potential customer base

• The can lead actors to overlook high potential customers or misidentify their needs, and invest in products and channels that sometimes miss the mark

• To drive financial inclusion, a deeper understanding of BoP consumers—how they differ as a whole and within traditional segments—can help FSPs produce more effective market interventions

Traditional segmentation approaches drive a strong market and product focus for FSPs…

…But despite their benefits, they can underserve some target consumers

Many FSPs segment the market using demographic and contextual aspects of the consumer:

• Age• Gender• Profession• Location• Education

This allows the FSP to design products and marketing approaches tailored to the broad needs and attributes of that segment, e.g.:

• Exciting marketing and cheap entry products for youth consumers

• Products supporting particular needs of women• Specific products applicable only to farmers—e.g.

crop insurance

Existing approaches to segmentation typically focus on demographic and narrow product-specific usage metrics to identify and market to key consumers groups; however this approach is often insufficient to

understand and segment underserved markets

4

We have developed a novel approach to segmentation that integrates contextual, behavioral, and psychometric variables

We integrated three variable types into our segmentation approach to expand the information about BoP consumers, strengthening typical approaches to segmentation

• We seek to improve the understanding of currently underserved groups, finding nuances and differences between people that may not be clear from their contexts alone

• Our aim is not to replace existing segmentations, but to augment and strengthen FSPs’ current market approaches: allowing FSPs to better reach their target consumers in the BoP, and offer more suitable products to them

Psychometric“Why do customers act as they do, and how does this drive

behaviour?”

Demographics“What are

socioeconomic characteristics of my customers?

Behavioral“How do my

customers act?”

5

Better target and design

marketing efforts

Improve product strategy

and design

Enhance loyalty and

promotional campaigns

Improve selection of beneficiaries

Better tailor interventions to beneficiary

needs

Benefits for development actors and policy makers

Benefits for financial service providers (FSPs)

Better understanding of underserved customers can help the private sector better design and target tailored services, thereby expanding provision overall; it can also help development actors and policy

makers create more effective programs, policies and regulations

6

BoP MARKET

Demographic segments reach deep into the BoP market

Overlaying an existing demographic segmentation with our approach can deliver rich insights into how increasing the customer uptake, use and retention of products

Overlaying a segmentation using behavioral and psychometric approaches with FSPs’ existing segmentation strategies can unlock opportunities to drive market share— reaching people that a broad demographic approach to the market may not reach or energize

FSPs will likely find their targets distributed throughout our segments, though likely more concentrated in some of the segments – this will help identify similarities and differences of people within FSPs’ target populations, especially among the BoP, leading to better product design and marketing

For example, an FSP targeting youth who had seen success with urban wealthy youth can understand where products and marketing approaches will and will not translate easily to BoP young people

Smallholder farmers

Youth

InformalWorkers

Women

7

Our approach incorporates methods from multiple research and analysis methods, such as human centered design and behavioral science

HCD insights and participant profiles

Survey design and implementation

Segmentation and data analysis

Customer segmentation research and analysis process

Desk research and stakeholder engagement

8

ContextSelected Dimensions/TopicsAgeGenderHousehold contextEducationSource/s and amount of incomeAsset ownership

Example Questions• What is your relationship to the

household head?• Do you own a feature phone?

If so, personally or with someone else?

• What is your primary source of income?

• Do you have a secondary source of income?If so, what?

BehavioralSelected Dimensions/TopicsHow individuals:Engage with the communityManage their day-to-day livesSeek advice Respond to risk3Manage their financial lives

Example Questions• Please let me know where you find

valuable and trustworthy information on financial matters

• How often do you, personally, send money using your mobile money account?

• Suppose somebody close to you gains a lot of wealth and decides to give you a gift. Please tell us how much you would spend on family, save in a bank, keep at home, spend on a future expense or spend on

PsychometricSelected Dimensions/TopicsSelf-efficacyConscientiousnessTrust in peopleRespect for authorityDependabilitySafety of savings2

Example QuestionsExample statements: Rate each of these statements on a scale of 1 to 5 with 1= strongly disagree, 2= disagree, 3=neutral, 4=agree and 5=strongly agree:• You always return a favor.

[Dependability]• Most people can be trusted. [Trust]• When I get what I want, it’s usually

because I worked hard for it [Locus of control]

For the survey, we developed questions covering contextual, behavioral and dimensions and topics

[1] These are non-exhaustive sets of topics [2] These are constructed in the data using combinations of questions on the topic. These questions are in the form of statements, which respondents react to [3] Drawn and adapted from major financial inclusion surveys such as Findex

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FINANCIAL LIFE IN CONTEXTEmerging Economies

People’s financial lives in emerging economies looks both similar and different to those in advanced economies. While the peoples needs and aspirations are similar, the contextual realities that drive behaviors and strategies look very different. Below we detail some of these:

4. Limited efficacy of social networks for financial management: limited size and scalability of social networks constrains their ability to provide financial services, especially credit and insurance

5. Marginal utility of most formal financial services: formal services play a limited role in most people’s financial lives, especially people who work in the informal sector

6. Hybrid financial behaviors and multi-functional financial tools: people’s financial management strategies are holistic and their behaviors are deeply interlinked; they value the multi-functional financial tools commonly provided through social networks, which cut across traditional financial product categories

1. Low and unreliable informal incomes: earned primarily through informal sector work create major challenges to managing cash flow

2. Limited access to public services and safety net: hinders people’s ability to mitigate risk and deal with financial shocks

3. Centrality of social networks for financial management: personal relationships and social networks are at the core of people’s financial lives

10

FINANCIAL HEALTHin Emerging Economies

We grounded our approach to customer segmentation in the concept of financial health, recognizing that it enables us to generate a more realistic and actionable understanding of people’s financial lives than is possible using a product or inclusion lens.

We believe products and services designed to strengthen people’s financial health are more salient and valuable in the eyes of consumers, expand markets and ultimately maximize customer lifetime value for providers, and are more likely to drive human development outcomes we seek.

People are financially healthy when their financial tools and strategies enable them to consistently meet basic day-to-day needs, develop and pursue financial and economic opportunities, and withstand and recover from financial and economic shocks.

Financial Health

People are financially healthy when they are able to use financial tools and strategies to effectively and consistently

Meet their basic needs

Cultivate financial and

economic opportunities

Resilient in the face of financial

shocks

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FINANCIAL BEHAVIOR in Emerging Economies

To make financial health actionable for providers and practitioners alike, we developed a behavioral model to describe and measure the financial behaviors and strategies people use in pursuit of financial health.

We grounded our segmentation approach in this behavioral model to better understand and describe differences in how people manage their money.

We built contextual and psychometric measures into our segmentation model to compliment our behavioral analysis, recognizing that circumstance, personality, and social norms play a big part in shaping people’s financial behavior and ultimately their financial and economic outcomes.

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PRIORITIZINGPeople have virtually unlimited needs and aspirations, yet finite financial resources. Whether deliberately or not, people prioritize the use of their financial resources to strike a balance between the two. Financial priorities are constantly evolving, shifting as their social, economic, and financial realities change. Financial stress often overwhelms people’s ability to set and pursue clear priorities, and forces them to pare back to focus only on their most urgent needs.

PLANNINGMost people plan their finances. Whether their plan spans one day, one week, or one year, they deliberately shape their income, build reserves, and cultivate receivables to achieve their priorities. People use a range of planning strategies with varying levels of complexity and concreteness, employing a wide financial instruments. Long-term planning can improve people’s ability to achieve their financial priorities, increases resilience, and reduces their financial stress. Financial stress can reduce planning capacity and limit people’s attention to their most urgent needs.

13


SHAPING INCOMEPeople shape income to better meet needs and aspirations. They work to determine the size and timing of earnings, and improve income reliability, in a manner that best covers expenses.

SHAPING EXPENSESPeople shape expenses to better meet needs and aspirations, manipulating expense size and timing to better match expected income. Many low- income families run small businesses and manage both household and business expenses together.

14


BUILDING RESERVESReserves are a person's net wealth (including all assets), available labor potential, and social capital. People build reserves by storing value in a manner that balances their unique needs for financial liquidity, security, and returns. People who establish some level of foundational reserves are better positioned to effectively manage their finances, pursue aspirations, and deal with the unexpected. Establishing a foundational reserve often is a transformational moment in a person’s financial life, instilling self- confidence and opening up many new possibilities, tools, and strategies.

CULTIVATING RECEIVABLESReceivables are the financial resources a person can obtain, but does not currently hold. This includes all forms of formal and informal credit, and social contributions from their community in times of need. People cultivate receivables by growing and securing income, building reserves to establish formal and informal credit, and making investments in the social safety net afforded by their network. The social safety net pools risk and provides people limited support in select times of acute need. Its strength is related to a person’s social status and the size and quality of their social network.

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GENDER ATTITUDES

• Financial management skills

• Financial openness in the family

• Financial education norms

• Observed gender bias in finance

• Technology skills

COMMUNITY BONDS

• Trust in people• Trust in social

financial networks• Belief in

community’s willingness to offer support for education and business

• Perceived equality within the community

FINANCIAL ATTITUDES

• Perceived simplicity of financial services

• Conscientiousness• Impulsivity• Openness• Deliberateness of

savings• Attitude towards

saving• Safety of savings• Dependability • Comfort with debt

INSITUTIONAL TRUST

• Trust in banks• Trust in media• Trust in

government• Respect for

authority

SELF-PERCEPTION

• Locus of control• Progress in past 5

years• Confidence in the

future• Self-efficacy• Self-esteem

To analyze the psychometrics, we then combined questions to capture attitudes identified in the desk research and through the qualitative research

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FSPs and development actors can use our research and our approach in various ways

▷Illustrative use cases

Rapid customer intelligenceTrial a short set of questions to determine the smallest set of questions that can reveal important user behaviors and attitudes for product design and uptake

Segment-aligned digital financial productsDevelop products that speak to the needs and aspirations of the segments (e.g., by combining information on segments with a human centered design research sprint)

Data matchingMatch our data with the call details records and transaction data of mobile network operators to learn how different segments are using an individual provider’s products

Expansion of our research to other development sectorsUse our data and approach to understand better other areas of interest to development actors, such as entrepreneurship and health behaviors. Development actors may re-survey the individuals we met with, or use a new sample

Evaluating impact of development interventions Use our approach to test the impact of development programs over time and how they are affecting individuals’ context, behavior and attitudes

FSPs

Development Actors

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Segments

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PragmaticProviders

19% of pop | 37.4 million

Pakistan’s most infrequent savers and borrowers, but amongst its most financially resilient; they are relatively frequent users of formal financial services and technology, and infrequent users of informal financial tools. They have a strong sense of agency, but dim hopes for the future, yet hold relatively progressive views on gender and finance.

HOW MIGHT WE

How might we market to Pragmatic Providers in a way that overcomes their distrust and design formal financial products that make them more confident in the future?

CarefulHustlers


Mostly male heads of household, Careful Hustlers are self-confident and want to invest. However, they struggle with the highest levels of income volatility, making it difficult to save and plan for expenses, but they still manage to borrow. They face frequent emergencies and have the lowest confidence in their ability to raise money in response. Careful Hustlers distrust banks as well as their community, and primarily manage money through family.

HOW MIGHT WE

How might we leverage Careful Hustlers desire to make investments and strong sense of agency to drive higher savings rates?

Modest Upholders


Primarily married, rural women in lower SES quintiles, Modest Upholders are strong financial managers likely coordinating family finances despite not being the primary or formal financial decision makers in their families. They are future-oriented planners and savers who manage their money mostly through family and close friends.

HOW MIGHT WE

How might we identify women likely to be frequent savers and develop products and campaigns that convert them to formal financial products?

CommunalElite


The wealthiest segment and best educated, with the highest resilience and use of financial tools, Communal Elites manage their income and expenses more effectively than most, and are frequent goal based savers, but relatively infrequent borrowers. They trust people and, despite being the most frequent users of formal channels, are more likely to borrow or save with family. Most are conscientious and effective financial planners.

HOW MIGHT WE

How might we design products that integrate social elements into formal finance while offering a greater value proposition than family/community based products?

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Pragmatic Providers

CarefulHustlers

CommunalElite

Modest Upholders

20

FINANCIAL BEHAVIOR INDEXsegment differences from national average

Careful HustlersPAGE 22

OverviewPAGE 23

User ProfilePAGE 33

AnalysisPAGE 62

Opportunities

Careful Hustlers19% OF POPULATION

Mostly male heads of household, Careful Hustlers are self-confident and want to invest. However, they struggle with the highest levels of income volatility, making it difficult to save and plan for expenses, but they still manage to borrow. They face frequent emergencies and have the lowest confidence in their ability to raise money in response. Careful Hustlers distrust banks as well as their community, and primarily manage money through family.

Overwhelmingly male and heads of household, Careful Hustlers are typically the primary financial decision-makers in their households.

They have the most volatile income of all segments and save less frequently than average. Most lack a plan to manage their expenses and fear that savings will be eaten up by pressing needs and family demands, perhaps suggesting potential for tools that support money management skills and build confidence in strategies to manage volatility.

They have the lowest confidence in their ability to raise emergency funds for which they rely more than any other segment on social sources despite having amongst the lowest trust in their social financial networks. While Careful Hustlers are less likely than average to own accounts with formal or informal financial channels, they are more likely to make use of the ones that they do own.

Careful Hustlers report the highest levels of self-efficacy and are far more likely than other segments to prioritize a a windfall towards investment.

CAREFUL HUSTLERS 22

Context+ 24% in SES 2, skewing slightly less wealthy+ 75% are male+ 64% are between the ages of 25-44 + 51% rural+ 58% have primary or secondary education+ 29% own land, 63% own feature phones+ 82% are married+ 58% make household financial decisions alone

Behavior+ 77% medium to high income volatility+ 31% confident in ability to pay their bills on time+ 21% save monthly or more (primarily with family)+ 24% borrow quarterly or more (primarily from family)+ 37% personally own livestock+ 67% have relied on social sources of money in

emergencies+ 29% have a plan to manage their expenses+ 71% talk on phone with two or more people daily+ 8% use internet and social media at least once per month

w/o assistance+ 18% own formal financial accounts+ 15% members of informal groups

Psychometrics+ Strong sense of agency, but low self-esteem + Half identify as planners, two thirds medium-high

conscientiousness+ Low impulsivity, low deliberateness in their savings+ Low comfort with debt, low dependability in general+ Low belief that savings safe from social claims+ Low trust in people and social financial networks+ Low trust in banks, view financial services are complex+ Believe men are better financial managers than women,

but that boys and girls should be educated about money in the same way

+ Believe husbands and wives should know each other’s finances

AspirationsCareful Hustlers are eager to make investments to stabilize and grow their income, and improve their household finances for their family.

CAREFUL HUSTLERS 23

AnilA CAREFUL HUSTLER

“We usually get paid monthly, after a project is done. Sometimes it’s weekly, rarely daily. Sometimes we even go 2 or 3 months until we get paid. It depends on when the contractor gets paid.”

CAREFUL HUSTLERS 24

JourneyAnil is the 19 year old son of a sharecropping family in Sindh province. He is the youngest of 3 brothers, and has 6 sisters. Despite being so young, he is the primary earner for the household—an outsize responsibility given his age and position in the family. Anil credits both his parents’ support and his own drive for his current success.

When Anil was only 12 years old, his parents gave him permission to start working and apprenticing with a local mechanic. For Anil, this set him apart from his peers. He spent the next 6 years learning the business instead of in school. Early in his apprenticeship, he decided that he was capable of starting his own shop and began planning to do so. He was driven to escape the sharecropping trap that doomed his parents to their lives of poverty.

Anil saved, hiding his earnings from his family so they wouldn’t be able to demand it for their many pressing needs. Anil did not feel guilty about saving in secret at that time. He didn’t understand the expectations for him to provide for and support the family. After all, he was still a child. And he believed that saving would enable him to open the shop without having to ask his family for burdensome contributions or loans.

“Sometimes my dad asks me for advice, but I’m too young to give good advice.”

CAREFUL HUSTLERS 25

CAREFUL HUSTLERS 26

“I’ll run the house one day. It's so much responsibility. I’m very nervous about it. My dad takes advice from my mom. I’m worried about how I would manage expenses, especially for marrying my brother and sister off.”

As he saved, Anil began building relationships at the local spare parts market where the shop owner for whom he apprenticed often sent him. He met his future business partner in that market — a man who knew the supply side of the business very well. Anil himself had over time built up an expertise in repairing a wide range of mechanical devices: from motorcycles, to generators and farm equipment, as well as in managing shop operations and apprenticing other youth.

When he was 18, Anil and his business partner opened their own repair shop. Anil financed his share with the savings he'd stashed away with a committee (ROSCA) he had joined at the spare parts market. His business partner equally invested cash to get the business started up.

Anil is now deeply grateful to his parents for giving him the encouragement and support to begin working at such a young age. He credits them for his success. He notes that none of his peers began working at such a young age, and that few of them now have drive or discipline that matches his own.

Aspirations & GoalsAnil feels a responsibility to take care of the needs of his parents and to support his brothers and sisters. He says, “They know that I'm earning, and they supported me. Now it's my turn to support them.” Despite his success, Anil identifies as poor and said that the family still struggles — so much so that he is barely able to save. Anil said he spends all he makes, which prevents him from saving towards his two most pressing goals: to re-invest in and expand his business, and to build an addition to his family’s home so he can get married.

In fact, Anil hands over his daily earnings to his eldest brother who recently took over from their father managing the family’s financial affairs. Anil only keeps a small portion of his earnings for himself, and the rest his brother uses as he sees fit. Anil said that most of this money goes to meeting the family’s daily needs —especially food, utilities, transport and medical bills. The earnings he hands over are also shared semi-regularly with his sisters and their families.

Anil himself wants to be married. His parents are looking for a wife for him. Once they find someone suitable, he thinks it will be at least another two to three years before they are able to get married. (AnilCAREFUL HUSTLERS 27

would need to pay for the expansion of the family home to accommodate his own future family.) However, the household's current situation is very tight, and his brothers are pressuring him to pay to expand their portion of the house as well. But given his modest capacity to save right now, he wants to first build his extension and get married. After that, he'll worry about his brothers.

Anil isn't clear on how he'll save to do this, but he suggests the prospect of his marriage would be an acceptable reason to temporarily draw down his support for his broader family and re-allocate that money for savings.

CAREFUL HUSTLERS 28

“We all talk about building our own house every single day. Because we don’t have our own house, we’re depending on others, and we have to do favors for the landlord.”

Attitudes, Behaviors, and ToolsTo that end, Anil thinks he will use the committee to save for construction. But he's concerned that he would still have to save money in the house after receiving regular payouts from the ROSCA, and keeping so much money around the house will inevitable lead to its premature use. Anil wants to open a bank account to prevent this happening.

Anil doesn’t have a bank account yet and isn't sure which bank he’d use, but his business partner is banked, so Anil plans to turn to him for guidance. Moreover, Anil is non-literate and will need support to set up the account. Yet even being non-literate, he believes he’ll eventually become comfortable using the ATM and the app without help. After all, he uses multiple smartphone apps already, navigating by rote memorization of icons, menu layouts, and certain word spellings. He even taught himself the English alphabet to help.

Although Anil wants to expand his business, he feels like it's currently out of reach and impossible to prioritize until he is married. He and his business partner want to move their operations to a significantly larger space, having considered both renting andCAREFUL HUSTLERS 29

“We all talk about building our own house every single day. Because we don’t have our own house, we’re depending on others, and we have to do favors for the landlord.”

CAREFUL HUSTLERS 30

buying. They want the space to accommodate a range of new tools and machinery that he thinks will help them take on more business. Yet both the additional tools and space would be very expensive. As such, he doesn’t really see how it’s possible for the moment.

Anil’s views on gender roles in the home, the economy and infinancial management clearly reflect the conservative traditions of his community and family. Anil is Hindu, and he says that in his community, women are not educated and do not even leave the home, much less go to work. He says that his family has followed this tradition, and if he has daughters, he will not want to educate them.

Asked why, Anil says, “When women study a lot, they begin to think differently from us, and that’s not a good thing. In our community, we think it's not good for women. Poor thinking can affect her marriage, because she goes out and works, and people will see it as a problem with her character.”

Later he elaborates that “It’s only due to family tradition that I wouldn’t want my daughter to be educated. But I face a lot of difficulty because I’m not educated, and I don’t want that for my girl.” Anil explains that beyond his daughter having trouble finding a husband as an

Anil feels similarly reluctant about the prospect of his future wife being educated. He said, “I’m not much educated, so I’d prefer the woman I marry not be educated either, so that we can go step-by-step, hand-in-hand. I don’t want to be unjust towards someone who is much more educated than me. It’s a matter of respect. And my family might not accept her, and then it would be hard for her.”

CAREFUL HUSTLERS 31

“If women in my home were earning, we could save even more and work towards our new home. I’ve never discussed this with my family. We don’t talk about such things. It’s a matter of honor. It wouldn’t be a big issue if I brought it up, but I still don't.”

User Insights

CAREFUL HUSTLERS 32

NEED TOOLS THAT ACCOUNT FOR BOTH GOALS AND VOLATILITY

Anil aspires towards the growth of his business, the growth of his family, the addition of a home to accommodate them. He believes in himself and his ability to work hard and learn what he needs to to succeed. But what he doesn’t have is the guidance and financial strategy suited to his sets of challenges

Anil would benefit profoundly from products and services that enabled more efficient, effective savings that can grow in the longer term without disadvantaging his ability to meet his present challenges. FSPs would do well to market to him as a small businessman, reaching him through, and helping him manage, his business affairs, while noting for customers like him the broader growth strategies small businessmen can employ at home.

MULTI-PURPOSE AND MULTI-CHANNEL SAVING

Anil must choose his savings channel carefully to align it with his savings goal. TO invest in his business, he saves in a ROSCA. To invest in his eventual marriage and new home, he saves at home. He saves with the channel that’s most likely to respect and affirm the goal the money being saved is attached to.

Anil needs savings channels suited specifically to the broad goals he struggles to attain. That tailoring can come through the flexibility, the cross-selling opportunities, or the marketing. Each would be meaningful to him and would likely spur investment, and possibly help him establish the support and accountability of those around him for meeting those goals.

w

Careful Hustlers

Context

20%21%

19%

15%

20% 20% 20% 20% 20%

SES 4SES 3 SES 5SES 1 SES 2

CONCENTRATED IN LOW–MIDDLE SOCIOECONOMIC CLASSES (SEC)

24%

0%

Myself with someone else

0%

Spouse UnknownOther peopleMyself

CAREFUL HUSTLERS 34

HOUSEHOLD DECISION MAKING

Careful Hustlers Pakistan average

SocioeconomicCareful Hustlers are mostly male heads of households with limited education. They struggle with high income volatility and are clustered in the bottom 3 SES quintiles. More so than any other segment, they rely on social sources of support in an emergency, despite having fewer people to call on or support when illness.Careful Hustlers are more frequently male (75%) than any other segment. With 64% aged 25 to 44 years, the segment trends middle-aged (39% 35-44 years old) at a rate above the national average. They are the most likely (62%) segment to identify as heads of households and to say that they make household decisions alone. Interestingly, a greater proportion of women identify as sole decision-makers (28%) in this than any other segment. A similar number of Careful Hustlers have formal education as have no formal education at all.

Careful Hustlers comprise mostly middle– to low–SES households, and their income volatility is the most severe of all segments. Accordingly, they are the most likely segment to struggle to pay their household expenses. At 49%, Careful Hustlers are the most urban of all segments –every other segment in Pakistan trends rural. They are also the least likely to own or have access to land or livestock. Their seemingly limited asset base may contribute to their vulnerability.

58%

38%

8%

9%

14%

30%

21%

23%

CAREFUL HUSTLERS 35

19%

5% 1%

53%

35%

3% 1%

Formal

institutions

Social

sources

Personal

sources

Informal

institutions

67%

34%

25%

40%

40%

17%

24%

5%

7% 4%

3 peopleNo-one 4 or more people1 person 2 people

4%

15%

15%

14%

13%

30%

27%

11%

13%

30%

31%

No phone access 3 people2 people 4 or more people0 or 1 person

NUMBER OF PEOPLE THAT CAN BE DRAWN ON WHEN SICK

USING YOUR PHONE, HOW MANY PEOPLE DO YOU TALK TO IN A DAY?

RESILIENCE: SOURCES OF MONEY IN AN EMERGENCY

Social NetworkOn average, Careful Hustlers can rely on fewer people when ill than any other Pakistani segment, though they speak on the phone daily with an average number of people compared to other Pakistanis.Careful Hustlers are the most likely to report relying on social sources (67%) for funds in emergencies, yet 74% can draw on no more than one person when ill, and over a third name no one at all. They are well below average in reliance on personal funds (19%) – their next-most likely source. Careful Hustlers are amongst the least frequent savers in Pakistan, so their low reliance on personal sources of finance in emergencies is not surprising.

Careful Hustlers probably borrow from friends and family in their network when faced with an emergency, as evidenced by their high rates of borrowing through these channels. Their reliance on family and friends for such loans cuts against their low trust in people in general, and may be driven by necessity rather than preference, pointing to an opportunity for formal credit and insurance providers.

Careful Hustlers

Pakistan average

Careful Hustlers

Behavior

CAREFUL HUSTLERS 37

FinancesFinancial Health Overview

Careful Hustlers show the weakest financial behavior of all segments, scoring below the national average in every category. They are below-average savers, struggle with volatile incomes and missed expenses, appear to have limited bandwidth at least for expense planning, and strain to raise money in emergencies.SHAPING INCOME & EXPENSESCareful Hustlers experience high income volatility and struggle more than any other segment to plan their expenses and pay their bills, suggesting their tools and strategies for shaping their income and expenses are not sufficient given their circumstances. Moreover, their struggles managing income and expenses likely suppress their confidence and ability to save, exacerbating their overall financial management challenges.

BUILDING RESERVESCareful Hustlers are the second least frequent savers nationally, most rarely or never save. Those that do prefer to do so with family or in the home, which may help them smooth income keep in good standing with family members from whom they frequently borrow. Their rates of land and livestock ownership are slightly below national averages.

FINANCIAL BEHAVIOR INDEX: segment difference from national average

*indexed on a 4 point scale

CAREFUL HUSTLERS 38


CULTIVATING RECEIVABLESCareful Hustlers are the most frequent borrowers in Pakistan, though remain close to the national average, and borrow almost exclusively from family. Nearly half are uncomfortable with debt (only a small minority are comfortable with it), suggesting they may struggle with repayment and are likely borrowing out of necessity (to smooth income or deal with emergencies, rather than to make investments). In the face of emergencies they most have relied on social sources for funds, but have low confidence in their ability to raise emergency money.

PRIORITIZATION Careful Hustlers strongly prefer using a windfall to invest, suggesting they are very eager to grow their income and improve their household finances. They do not prioritize saving, as evidenced by their low savings frequency and low allocation of a windfall to either short or long term savings channels.

PLANNINGCareful Hustlers struggle with financial planning, especially when it comes to expenses, though nearly half identify as the type of people who make plans and follow through with them. This may be driven in part by the fact that men in this segment defer expense planning to their wives, and in the case of non-elder men in joint households, may defer both expense planning and overall financial planning to senior males in their families.



CAREFUL HUSTLERS 39

20%

12%

10%

7%

6%

2%

28%

26%

19%

12%

7%

6%

2%

Paying a debt

Spending on pleasure

Sharing with friends/family

Future expense

Saving in a bank

Investing

Keeping as cash

HOW WINDFALL IS PRIORITIZED

44%


FinancesFinancial Priorities

Careful Hustlers strongly prefer using a windfall to invest, suggesting they are very eager to grow their income and improve their household finances. They do not prioritize saving, as evidenced by their low savings frequency and low allocation of a windfall to either short or long term savings channels.Careful Hustlers would allocate 44% of a windfall to investment, 57% larger than the Pakistani average. Careful Hustlers’ preference to invest large portions of windfalls stands out dramatically from other segments, they are the only segment above the Pakistani average, single-handedly skewing the national average.

Their status as head of household may give them unique incentives and authority to make investment decisions, which may also in part be driven by their high levels of self-efficacy and sense of control.

Additionally, compared to other segments Careful Hustlers have limited land and livestock. They may be looking for opportunities to build income-generating asset bases, particularly as a segment struggling even to save.

CAREFUL HUSTLERS 40

20%

12%

10%

7%

6%

2%

28%

26%

19%

12%

7%

6%

2%

Paying a debt



Future expense

Saving in a bank

Investing

Keeping as cash

44%



Careful Hustlers are less likely than the national average to save a windfall through any channel, ranking least of all segments for saving windfalls in a bank (typically used for securely saving larger sums), keeping in cash (frequently a short-term savings choice for unexpected expenses), and second-lowest, behind Independent Traditionalists, for sharing the windfall with friends and family (frequently loci for group savings). Given their income volatility, which may in part drive low savings preferences, it is noteworthy that despite their overall poor planning in other measures, Careful Hustlers are more forward-looking in their windfall strategies.

They are the least-likely segment to trust banks, and are among the most likely to perceive financial services as complex. This potentially helps to explain why they deprioritize saving windfalls in formal channels.

Careful Hustlers low trust in social financial networks may in part drive their low preference for sharing windfalls with family and friends. 68% distrust their social financial network, compared to 40% nationally.

They may believe saving in the community would bring a limited returns and that investments are their best growth strategy. Careful Hustlers perceive the lowest levels of equality in their community (61% low-lowest), More than any other segment, they are the least likely to believe that their communities would support them in business or the education of their children (49% disagree-strongly disagree).


18%

15%

5%

16%

11%

7%

FINANCIAL ACCESS

Formal finance Informal finance Mobile wallets

CAREFUL HUSTLERS 41

FinancesFinancial Access

While Careful Hustlers are less likely than average to own accounts with formal or informal financial channels, they are more likely to make use of the ones that they do own. In particular this is true of their borrowing, where they report the highest rates overall of borrowing, particularly with family.Careful Hustlers are more likely than average Pakistanis to use mobile money for saving and borrowing, but their most common reported use is to receive money. This may be remittances related to their income volatility and frequent inability to meet expenses, or may be how their loans are disbursed from social channels such as family.

Although 74% report low usage of digital technology — the second-lowest overall, 81% use their phones between one and five times daily, the second-highest level overall. USSD-based services are likely accessible and of interest to this segment.

Careful Hustlers are the second-most likely segment to believe financial services are complex, slightly above the national average with 68%. Formal ownership lags slightly behind the national average for Careful Hustlers. With a tendency to see the services that formal accounts offer as complex, Careful Hustlers may be disinclined to open formal accounts for this reason, or may struggle even to know how to do so, and what value propositions formal accounts might offer.

COMPLEXITY OF FINANCIAL SERVICES

5%

4%

15%

15%

12%

15%

56%

49%

13%

16%

AgreeNeutral Strongly agreeDisagreeStrongly disagree


CAREFUL HUSTLERS 42

FinancesShaping Income & Expenses

Careful Hustlers experience high income volatility and struggle more than any other segment to plan their expenses and pay their bills, suggesting their tools and strategies for shaping their income and expenses are not sufficient given their circumstances. Moreover, their struggles managing income and expenses likely suppress their confidence and ability to save, exacerbating their overall financial management challenges. Careful Hustlers experience the highest quarterly income volatility of any segment in Pakistan, but the lowest daily income volatility. 65% report high income volatility, while only 23% report low volatility, compared with 46% and 23% nationally, respectively. They also experience the highest daily income volatility, 68% say that in the morning they don’t know how much they will earn that day compared to 52% of Pakistanis overall.

They struggle to meet expenses, and in fact have the most unpaid monthly expenses of any segment (5.25), which is not surprising given their high income volatility. They also have the lowest confidence in their ability to pay household expenses, with 57% feeling they are generally unable to do so

9%

5%

48%

28%

12%

21%

29%

40% 5%

5.25

4.51


NUMBER OF UNPAID EXPENSES

ABILITY TO PAY HOUSEHOLD EXPENSES

Agree Strongly agree

2%

Strongly disagree NeutralDisagree

23% 12% 65%

34% 21% 46%

MiddleLow High

QUARTERLY INCOME VOLATILITY

54%

31%

14%

24%

26%

36% 5%

CAREFUL HUSTLERS 43


compared to 33% of Pakistanis in general. However, a significant subset of 31% are confident in their ability to do so.

Their expense management challenges may be compounded by the fact that they face on average 1 financial emergency per year, likely throwing their plans into disarray and setting back their progress in building a stable financial foundation.

Careful Hustlers are the least likely segment to report having a plan to manage their expenses (28%), compared with 41% of Pakistanis in general. Their high income volatility likely makes expense planning very challenging. Moreover, their income and expense troubles probably suppress their confidence and ability to save, ultimately making volatility harder to manage short of working more, cutting expenses, and borrowing.


Agree

3%4%

Neutral

4%

DisagreeStrongly disagree Strongly agree

HAS PLAN TO MANAGE EXPENSES

NUMBER OF EMERGENCIES FACED

0.99

1.04

73%

63%

20%

25%

7%

10%

27%

9% 10%13%

4% 3%

29%

21%

8%10%

23%

4% 4%

Never DailyMonthly WeeklyAlmost never Once every

6 months

Once every 3

months

NUMBER OF SAVINGS CHANNELS

34%

10 2

SAVINGS FREQUENCY

CAREFUL HUSTLERS 44

FinancesBuilding Reserves

Careful Hustlers are the second least frequent savers nationally, most rarely or never save. Those that do prefer to do so with family or in the home, which may help them smooth income keep in good standing with family members from whom they frequently borrow. Their rates of land and livestock ownership are slightly below national averages.Careful Hustlers are the second least frequent savers after Pessimistic Individualists. 61% rarely or never save, compared with 50% of Pakistanis overall. In fact, they are the most likely segment to rarely save (61%). Only 20% save monthly or more compared with 31% of Pakistanis overall.

They have the second fewest active savings channels after Modest Upholders, 73% use none on a quarterly basis. Amongst Pakistanis who report saving, most do so monthly, however Careful Hustlers save significantly less at monthly intervals perhaps due to their struggles paying bills

Careful Hustlers are the prefer to save with family, but do so at the lowest rates amongst segments. 15% save with family at least quarterly, and another 11% do so yearly. They are perhaps deploying their limited savings capacity in ways that help to maintain positive ‘social credit scores’ with their most important


SAVINGS CHANNELS

5%8%

2% 2%7%

9%15%

23%

3%3% 2%

11%

9%

1%1%

8%

3%

8%11%

3%

11%

26%

32%

1%

Bank Mobile money Groups and friends Family

Less than once in three

months

Once in three

months or more

CAREFUL HUSTLERS 45


their savings are safe from the demands of those around them, which may also suppress their savings rates with family and groups.

Careful Hustlers are the second least frequent savers with informal groups and friends after Pessimistic Individualists. Though 11% report being a member of an informal financial group, only 8% report ever saving through this channel. 5% of Careful Hustlers report saving through groups and friends on a monthly basis.

Careful Hustlers are the second least frequent savers with banks after Modest Upholders, with 8% report ever saving with a bank. While 16% own bank accounts, only 4% save using it on once a month or more.

They have about average rates of land access amongst Pakistanis, with 40% personally or commonly owning land compared to 41% nationally. Amongst Careful Hustlers, 27% report personally owning land compared with 25% of overall, and another 14% report commonly owning land compared with 16% of overall. About half of those who personally or commonly own land purchased it, (22% have purchased land compared to 30% nationally).

Careful Hustlers have the lowest rates of livestock ownership amongst segments, though only slightly below the national average. 23% personally own livestock, in line with the Pakistani average, and another 14% commonly own it, slightly below the national average of 15%. This may reflect the fact that they are the segment that skews most urban.


76%

76%

23%

21%

CAREFUL HUSTLERS 46

FinancesCultivating Receivables

Careful Hustlers are the most frequent borrowers in Pakistan, though remain close to the national average, and borrow almost exclusively from family. Nearly half are uncomfortable with debt (only a small minority are comfortable with it), suggesting they may struggle with repayment and are likely borrowing out of necessity (to smooth income or deal with emergencies, rather than to make investments). In the face of emergencies they have most relied on social sources for funds, but have low confidence in their ability to raise emergency money.Careful Hustlers are the most frequent borrowers in Pakistan, with 24% borrowing quarterly or more, compared with 24% of Pakistanis overall, and 41% borrowing at least annually, versus 37% nationally. Only 48% report never borrowing, compared with 54% of Pakistanis overall. They maintain the second most active debt channels after Modest Upholders, with 24% maintaining one or more.

They are the most likely segment to borrow from family, 39% do so at least annually, versus 32% nationally. Their poor saving may be linked to their more

BORROWING FREQUENCY

DEBT CHANNELS USED IN LAST 3 MONTHS

1 20

2%

2%

0%48%

54%

11%

9%

16%

13%

10%

8%

13%

13% 2%

At least

once a year

2%

Daily

Less than

once a year WeeklyMonthly

Once every

3 monthsNever

0%


44%

30%

37%

28%

13%

32%

6%

11%

3%

23% 21%

3% 4% 4% 4%

26%

21%

SOURCE OF BORROWING

Less than once in three months

Once in three

months or more

2%Bank

7%6%

1% 0% 0%

Mobile money

0%0% 2%

Groups and friends

42%

Family

4% 6%0% 1%

49%

CAREFUL HUSTLERS


frequent borrowing behavior, showing a desire to keep in good with likely credit channels, pay back outstanding debts, or get ahead coming credit need by establishing a kind of deposit base, assuming that the family members from whom they borrow are the same as whom they save.

By contrast, they borrow from friends, social groups, and banks at the average rates of leading segments. With below-average so many channels, and very low likelihood of using more than one their above-average use of family for borrowing is all the more

Careful Hustlers are the least-likely segment to believe that they raise funds when facing an emergency (81% believe it is possible), yet they rely more heavily on social sources of funding in emergency than any other segment (67%). With the second-lowest behind only Modest Upholders, their network may be as income-they are. Additionally, with many reporting that they do not think communities are equal, they may find it difficult to build broad, sources of social support, particularly given their low trust in people communities (only 16% report trusting).


CONFIDENCE IN ABILITY TO RAISE EMERGENCY FUNDS

Not very possible Very possibleImpossible Somewhat possible

47

Finances Financial Planning

Careful Hustlers struggle with financial planning, especially when it comes to expenses, though nearly half identify as the type of people who make plans and follow through with them. This may be driven in part by the fact that men in this segment defer expense planning to their spouses, and in the case of non-elder men in joint households, may defer both expense planning and overall financial planning to senior males in their families.Nearly half of of Careful Hustlers (48%) identify as the type of people who ‘make plans and follow through with them.’ While this is nearly half the segment, it is well below the national average of 66%.

Only 29% agree that they have a plan to manage expenses, again well below the national average of 41%. Yet, over half identify as the primary household decision maker, suggesting expense planning may be delegated to other members of the households, especially spouses.

HAS A PLAN TO MANAGE EXPENSES

MAKES A PLAN AND FOLLOWS THROUGH WITH IT

CAREFUL HUSTLERS

54%

31%

14%

24%

26%

36% 5%

3%4%

4%

Agree Strongly agreeDisagree NeutralStrongly disagree

7%

4%

27%

13%

19%

16%

42%

53%

6%

13%

Strongly

agreeAgreeNeutral

Strongly

disagree Disagree


48


However, others may live in joint households relying on their fathers or elder brothers. A significant number of the Confident Hustlers who identify “other people” as primary deciders in their households are men (about one in five). In such cases, they likely must ask the primary decision-maker for funds each time there is a need, leaving them with only a reactive financial strategy, and making it difficult to plan long-term.

CAREFUL HUSTLERS


0%


0%

Spouse UnknownOther peopleMyself

58%

38%

8%

9%

14%

30%

21%

23%


49

63%

52%

14%

17%

23%

31%

11%

19% 6%

87%

75%

2%

Don’t ownPersonally Own Common Property

74%

64%

15%

19%

11%

17%

Low Medium High

12%

14%

18%

22%

36%

32%

22%

18%

11%

14%

5 or more times per day3 -4 times per dayNo phone access 1 -2 times per dayRarely/ never

CAREFUL HUSTLERS 50

TECH USE FREQUENCY

ACCESS TO SMARTPHONES

PHONE USAGE

ACCESS TO BASIC AND FEATURE PHONES

Don’t ownPersonally Own Common Property


TechnologyCareful Hustlers tech use lags national averages in virtually every category, likely owing to their significant number with no formal education, middle-aged population, and income volatility.While their smartphone ownership and overall tech use is well below average – perhaps to be expected in a segment that skews middle aged, their feature phone ownership is the highest of any segment. Taken with their above-average mobile money account ownership, Careful Hustlers likely have experience with and willingness to use USSD-based services. This aligns with their higher-than-average phone calls daily (at least half use a phone 3-4 times per day), even though their technology use overall lags behind national averages (particularly among male-dominated segments.)

Indeed, with 39% having had no schooling or only informal schooling, broad smartphone adoption would likely be a great challenge.

Nevertheless, Careful Hustlers technology use is notably poor across many of the measures exclusive of phone calls, and their internet use is the lowest of any segment. Only 19% of the segment send texts a few times per week up to daily. In that same range of frequency, only 6% visit websites, 7% use social media, and 3% use computers.

Careful Hustlers

Psychometrics

CAREFUL HUSTLERS 52


PsychologySelf-Perception

Careful Hustlers have an strong sense of agency and seem to trust themselves over others, but struggle financially and have low hopes for the future. They have low self-esteem, perhaps driven by their financial struggles and heavy sense of responsibility as heads of household.

Most of Careful Hustlers have an internal locus of control, the second highest level after Pragmatic Providers, and less than a quarter have a clear external locus of control, indicating most feel their circumstance and outcomes are within their control. Amongst them, 58% report high to the highest levels of control compared with 40% of Pakistanis overall, and 22% report the lowest levels compared with 41% overall.

Careful Hustlers have the second highest sense of self-efficacy after Pragmatic Providers, with 41% reporting the highest levels and 24% reporting high levels, compared to 20% and 19% of Pakistanis overall, respectively. Most believe in their ability to improve themselves, including their financial management. Given this standout belief in their own abilities, their high preference for allocating windfalls to investment seems reasonable, particularly if they’re eager to rapidly grow into greater independence and stability, a position from which they’d expect to exercise even greater freedom. They seem broadly to doubt others and believe that they could ‘do the job better.’

22%

41%

23%

20%

55%

40%

HighLow Medium

LOCUS OF CONTROL

8%

27%

10%

13%

16%

21%

24%

19%

41%

20%

Low Middle HighestLowest High

SELF-EFFICACY

58%

40%

21%

21%

21%

39%

CAREFUL HUSTLERS 53

PsychologySelf-Perception

However, despite their strong sense of agency, most have low self esteem, with 58% reporting low self esteem compared to 40% of Pakistanis overall. This is likely due to the fact that their financial and economic outcomes are worse than their peers on average, as evidenced by their low SES and below average scores on our financial behavior index. It is possible given their strong sense of control that they blame themselves for their relatively poor outcomes, especially in light of their aspirations. Moreover, they are the least likely segment to to believe that their communities are equal — that their family, friends or friends or neighbors earn similar livings or are in similar financial situations. They do not believe it likely that their communities will support support their growth or needs.

Alongside Pragmatic Providers, Careful Hustlers hold the most negative negative outlooks on the future amongst Pakistanis, with 66% believing believing they will be worse off in the next five years compared with 40% with 40% overall. Their high locus of control and self-efficacy suggest they suggest they find themselves ready and capable of seizing opportunities opportunities and theoretically converting them to gains, but the challenges they face managing highly volatile incomes and making savings, making savings, despite having a strong desire to make investments, likely investments, likely keep them in a reactive mode dealing with constant constant scarcity that makes it hard to imagine a future where they are they are significantly better off.

Low HighMedium

45%

20%

21%

20%

17%

26%

8%

16%

9%

17%

MediumLow HighestLowest High


CONFIDENCE IN THE FUTURE

SELF-ESTEEM

40%

41%

20%

19%

40%

40%

63%

40%

21%

24%

17%

36%

Low Medium High

CONSCIENTIOUSNESS

CAREFUL HUSTLERS 54

PsychologyFinancial Attitudes

Most Careful Hustlers measure medium to high on conscientiousness and identify as planners, but save and plan for expenses infrequently. They are not particularly impulsive or open, which may due to the relatively high risks and costs of undisciplined spending and trying new things, given their precarious financial situation. They borrow despite experiencing a lot of anxiety around it, indicating a strong need for capital, and their low saving rates may be driven by the fact they do not feel their savings are safe from claims of family and needs of the household.

Careful Hustlers’ conscientiousness is similar to the national averages with 60% showing medium to high conscientiousness. Taken together with the fact most identify as planners, their reported low rates of expense planning are likely less driven by their attitude and more by their high income volatility, low SES, and frequent financial emergencies.

Careful Hustlers score as the least impulsive segment, 63% score low impulsiveness compared to 40% nationally and only 28% show impulsivity compared to 43% nationally. Their low impulsivity may reflect a real need for discipline in their spending given the precariousness of their finances.

13%

10%

49%

32%

11%

16%

23%

34%

5%

9%

MiddleLowest Low High Highest

IMPULSIVITY

Low HighMedium

OPENNESS

Careful Hustlers

Pakistan average

47%

20%

22%

28%

10%

14%

15%

25%

6%

13%

CAREFUL HUSTLERS 55



Together with Pragmatic Providers, they are also the least open segment in Pakistan, with 63% scoring low on measures of openness compared with

40% of Pakistanis overall. Only 17% showing significant openness. Regularly unable to meet their household expenses, lacking consistent enough resources and corresponding plan to build reserves, and likely without significant assets to fall back on, it is possible that their low openness is related to the very high risks and switching costs involved in trying new products or services alongside the meager trust they have for everyone around them, from institution to neighbor.

Despite their very low impulsivity, Careful Hustlers are the least deliberate segment in terms of goal based savings, with 47% measuring at lowest and another 22% measuring low, compared with 20% and 28% of Pakistanis overall, respectively. This is in line with their infrequent savings – we would not expect a segment that rarely saves to often save with a specific goal in mind, especially, one with such high income volatility and expense management challenges.

Careful Hustlers do not consider themselves dependable, 60% believe they are not dependable, second only to Pragmatic Providers and well above the national average of 40%.

Despite the fact they are the most frequent borrowers, Careful Hustlers are not, for the most part, comfortable holding debt. 41% report low to the lowest levels of comfort, compared with 42% nationally, and only 16% report high to the highest levels of comfort, compared with 18% nationally. This

DEPENDABILITY

SAVINGS DELIBERATENESS

Low HighestLowest Middle High

Low

0%

High

0%

HighestMiddleLowest

38%

22%

23%

18%

33%

44%

7%

16%

8%

13%

42%

43%

18%

17%

24%

22%

8%

6%

CAREFUL HUSTLERS 56

HighVery low Medium Very highLow


indicates many experience anxiety around their debt, suggesting they may struggle with repayment and are likely borrowing out of necessity (to smooth income or deal with emergencies, rather than to make investments).

Half of Careful Hustlers are are not confident that their savings are safe from the demands of those around them or need to be used for their originally intended purpose, though nearly 1/3 feel the opposite. Given that most are head of households and struggle with volatile income, save infrequently, and face challenges paying expenses, it is not surprising that many do not feel their savings are safe from the claims of their family and network, or need to be used for their original purpose.

Moreover, beyond their role as head of household, their attitude towards saving helps explain their desire to put their money to work through investments. Investing rather than saving places money out of the impending grasp of the daily needs of the household and social network. Investing may seem the best way to both protect and grow capital.

It is important to note that Careful Hustlers actually feel that their savings are safer from the claims of their network and less fungible than most Pakistanis on average; however Pakistanis overall feel that their savings are not safe in this sense, reflecting high income volatility, struggles with expenses, and social financial entanglement in general across the population.

SAFETY OF SAVINGS

ATTITUDE TOWARDS SAVINGS

COMFORT WITH DEBTCareful Hustlers

Pakistan average

29%

28%

13%

15%

43%

39%

14%

16%2%

Middle HighestLowest HighLow

2%

29%

25%

45%

45%

13%

13%

10%

12%

Medium Very high

4%

Low HighVery low

3%

TRUST IN PEOPLE IN COMMUNITY

TRUST IN SOCIAL FINANCIAL NETWORKS

57CAREFUL HUSTLERS

Psychology Trust

Careful Hustlers are a distrustful segment, with around 2/3 distrusting people in their community, their social financial networks, and banks. Given the importance to effective financial management, it is possible their low trust is closely related to this segment’s limited financial behavior. Yet, while they harbour doubts about others, they feel more trusting of themselves, believing themselves capable of growth, and able to influence events around them. Careful Hustlers have the second lowest trust in people within their community after Pragmatic Providers, with 66% measuring low to the lowest level compared with 40% of Pakistanis on average. Only 16% record high to highest trust levels compared with 40% nationally.

Moreover, they have the lowest trust in social financial networks, with 68% reporting low to the lowest levels of trust compared with 40% of nationally. Only 16% report high to the highest levels of trust compared to 40% nationally.

38%

20%

28%

20%

18%

20%

5%

11%

11%

29%

HighestLowest Low HighMiddle


43%

20%

25%

20%

16%

20%

12%

28%

4%

12%

Lowest HighestHighLow Middle

56%

38%

5% 14%

24%

24%

28% 5%

58CAREFUL HUSTLERS

Psychology Trust

Careful Hustlers view their communities as more unequal than any other segment, with 61% reporting low or the lowest perceptions of community equality compared with 42% of Pakistanis overall. Only 25% clearly believe their communities are equal, reporting high to the highest perceptions of equality, compared with 32% of Pakistanis overall.

In Pakistan, having a low belief in community equality correlates with higher daily and weekly income volatility. It may be that people with higher SES or those formally employed may have more homogenous social circles, more stable incomes, and greater ability to draw on social financial networks for income smoothing.

About half of Careful Hustlers (49%) do not believe they can rely on their networks to provide support for their business and education investments, compared with 32% nationally. They perhaps see that those around them are in a higher SES or one that is worse – in either case, less inclined to extend help. These possibilities could reflect their belief that their communities won’t provide support or assistance, and may relate to their low self-esteem.

Yet they rely heavily on their social financial network to provide support in times of emergencies, but are the least-likely segment to believe that they are able to raise funds when facing an emergency (81% believe it is impossible or not very possible), suggesting that their distrust of people and their networks may

4%

5%

45%

27%

15%

23%

33%

39% 5%

Medium HighestLowLowest High

1%

4%

Strongly disagree NeutralDisagree Strongly agreeAgree

3%

PERCEIVED COMMUNITY EQUALITY

BELIEF IN COMMUNITY SUPPORT FOR BUSINESS & SCHOOL FEES


21%

15%

30%

23%

17%

16%

26%

35%

6%

10%

27%

20%

30%

20%

20%

20%

15%

20%

10%

20%

59CAREFUL HUSTLERS

Psychology Trust

Careful Hustlers place little trust in banks, with 57% reporting low-lowest trust. Only one in four Careful Hustlers report trusting banks outright, and they view financial services as complex more than the national average. Their high rate of emergencies and unpaid household expenses may make it difficult for this segment to place their funds in more difficult-to-reach places, such as formal accounts. With seemingly little engagement with formal financial channels overall, particularly with below-average formal inclusion, their experience of financial services being very complex poses an interesting challenge in reaching them with guidance.

Neither does this segment seem to hold considerable trust in media – ranking moderate to low nationally, perhaps serving to further isolate them more broadly from new market offerings (their social network information awareness is also low). (Nevertheless, with 38% watching at least multiple times per week, television might be the best media channel through which to reach them.)

An interesting potential exception to this rule may be their above-average use of mobile accounts, which may appeal to their high locus of control, self-efficacy and tendency to make financial decisions alone. Were information to reach them through their feature phones, particularly that which emphasized secure investments and stabilizing financial tools, it could potentially overcome their high skepticism.

Lowest Low Middle HighestHigh

8%

7%

30%

25%

41%

33%

16%

27%

5%

9%

Middle HighestHighLowLowest

HighMediumLow

HighestMiddleLow HighLowest

TRUST IN BANKS

TRUST IN GOVERNMENT

TRUST IN MEDIA

RESPECT FOR AUTHORITY


25%

22%

63%

58%

12%

20%

7%

4%

9%

6%

10%

9%

58%

55%

16%

26%

CAREFUL HUSTLERS 60

HUSBANDS AND WIVES SHOULD KNOW ABOUT EACH OTHER’S AFFAIRS

PsychologyGender

Men and women within this male dominated segment share very similar gender views, unlike within the female dominated Modest Upholders, where views on gender are significantly more progressive across metrics, especially for women.Careful Hustlers tend to believe men are better financial mangers and technology users than women, and do not think loan issuance is biased against women. However, they feel wives and husbands should know each others finances. and girls and boys should be educated about money in the same manner.A male-dominated segment, Most Careful Hustlers believe men financial managers than women. Overall, 55% of the segment to be the case compared with with 62% of Pakistanis overall. (21%) disagree with this notion than Pakistanis overall (19%).

However, a majority of both men and women in the segment believe men are better financial mangers than women. Amongst men in the segment, 56% are in agreement, compared with 52% in the segment (against national averages of 60% of men and women, respectively).

Strongly Disagree Agree Strongly AgreeNeutralDisagree

6%

6%

16%

13%

23%

20%

45%

46%

10%

16%

Neutral Strongly agreeAgreeStrongly disagree Disagree

MEN ARE BETTER FINANCIAL MANAGERS THAN WOMEN


CAREFUL HUSTLERS 61

WOMEN UNDERSTAND NEW TECHNOLOGIES BETTER THAN MEN

WHEN APPLYING FOR A LOAN, THE GENDER OF THE APPLICANT DOES NOT INFLUENCE WHETHER THE LOAN IS GRANTED

PsychologyGender

Yet, Most Careful Hustlers believe that husbands and wives not know each other’s financial affairs. Though at 74% are in agreement, compared with

compared with 80% and 10% of Pakistanis, theirs is the second lowest rate after Pragmatic Providers (Social Optimists and Networked Elites feel

feel significantly more strongly in the affirmative). Interestingly, women and men in this segment feel similarly strongly that they wives and and husbands should know each others financial affairs.

Moreover, 71% of Careful Hustlers believe that girls and boys should receive should receive the same education about money, compared to 79% of 79% of Pakistanis overall, the second lowest rate after Pragmatic Providers. Amongst Modest Upholders, women and men feel similarly similarly strongly that girls and boys should be educated about money in money in the same way.

34% believe that when applying for a loan, the gender of the applicant has applicant has no influence on whether the loan is granted, compared to compared to 55% of Pakistanis overall. While this makes them more more progressive than Pakistanis on average in recognizing the gender gender disparities in loan issuance in Pakistan, Its still a high number that number that may reflect the fact that most in this segment have limited limited account ownership and recent history applying for formal loans. loans.

Careful Hustlers are split on their opinion whether women understand new

understand new technologies better than do men, with roughly one third feeling the do, one third feeling they don’t, and one third responding “neutral.”

6%

5%

27%

17%

33%

23%

27%

42%

7%

13%

Disagree

Strongly

agreeAgreeNeutral

Strongly

disagree

9%

6%

30%

21%

30%

25%

26%

36%

5%

12%

Neutral

Strongly

agreeAgreeDisagree

Strongly

disagree

BOYS AND GIRLS SHOULD BE EDUCATED ABOUT MONEY IN THE SAME WAY

13%

24%

58%

55%

13%

9%

12%

8%

4%

Neutral

4%

Strongly agreeAgreeDisagreeStrongly disagree

OPPORTUNITIES

How might we leverage Careful Hustlers desireto make investments and strong sense of agency

to drive higher savings rates? +

How might we create knowledge and education pathways

built into products and services that clearly lead to growth and stability from small investments?

62CAREFUL HUSTLERS

Pragmatic ProvidersPAGE 64

OverviewPAGE 66

User ProfilePAGE 74

AnalysisPAGE 102

Opportunities

PragmaticProviders19% OF POPULATION

Pakistan’s most infrequent savers and borrowers, but amongst its most financially resilient; they are relatively frequent users of formal financial services and technology, and infrequent users of informal financial tools. They have a strong sense of agency, but dim hopes for the future, yet hold relatively progressive views on gender and finance.

Pragmatic Providers are predominantly married menbetween 25 and 44 years old living in rural areas and concentrated in the top 3 SES quintiles. They are slightly better educated than average. Their financial health is close to average for Pakistan, though they are the least frequent savers and borrowers. Yet, they are amongst the most able to raise money in an emergency and to rely on the community for financial support.They struggle with expenses, but are effective income smoothers. Their below-average conscientiousness and low likelihood to plan for expenses may drive their expense management struggles. They are amongst the most frequent users of formal financial services, and individual products may be particular compelling.Pragmatic Providers have a very negative view of the future and are highly individualistic with a strong belief in themselves and low trust in their communities, yet they are the least biased against women when it comes to their financial opinions.

PRAGMATIC PROVIDERS 64

Demographics+ 48% in 4-5 SES quintiles+ 67% are male+ 83% are married+ 59% are between the ages of 25-34 + 60% rural+ 62% have primary or secondary education+ 44% personally own land+ 51% make household financial decisions alone

65

Behavior+ 26% high income volatility, 44% medium+ 32% confident in ability to pay their bills on time+ 29% have a plan to manage their expenses+ 20% save monthly or more (primarily with family), 58%

rarely or never save+ 19% borrow quarterly or more (primarily from family)+ 18% own formal financial accounts+ 46% somewhat to very possible to raise emergency

funds+ 40% have relied on social sources of money in

emergencies+ 40% personally own livestock+ 45% are medium to high users of technology

Psychometrics+ strongest sense of control over their lives and above

average belief in their own abilities+ lowest self-esteem and low belief they will be better off

in the future+ second lowest deliberateness and impulsivity+ lowest comfort with debt and feelings of dependability+ lowest trust in people in their communities+ second lowest trust in banks, media, and government+ 40% believe men financial managers than women

AspirationsPragmatic Providers aspire to fulfill their roles as breadwinners and providers for their family, while building social capital and avoiding reliance on their networks for financial support and management. They struggle to pay bills and face many financial emergencies, and as such aspire to but struggle to build up their savings to provide a cushion.

PRAGMATIC PROVIDERS

66

Gul HassanA PRAGMATIC PROVIDER

“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.”

DemographicsGul Hasan is a middle-aged man and father of six (5 sons and 1 daughter) living in Sind Province. He is a bonded laborer who works as sharecropper. Gul’s family lives in a cluster of six homes in remote corner of the landlord’s 300 hectares. They are two miles walk from the nearest village. Amongst Gul’s neighbors are several of his brothers and their families. His earnings are tight and he struggles to make ends meet. Despite this he is determined to get his children an education so they do not have be sharecroppers.

67

“My parents worked for the landlord, he gave them permission to build a home on the land under the condition that they would vacate it whenever he says. If we stopped sharecropping, he would ask us to leave. That's the understanding.”

PRAGMATIC PROVIDERS

JourneyGul Hasan is the eldest son born into a large family of bonded share-croppers. Growing up, his family struggled to get by, especially when harvests were poor. As the eldest son, he quickly went to work in the fields, helping his parents with their plot. Neither he nor any of his brothers and sisters ever went to school. Growing up, there were few schools in the area, and his parents needed help.

Gul and all of his brothers ended up in bonded labor to the same landowner as their parents, who are now elderly and dependent on his support and care. Gul is resigned to his lot in life and deeply pessimistic about his own future, though he did not place blame on his parents and was reluctant to criticize his landlord and the sharecropping situation in which he feels trapped.

Gul is the sole provide for his wife and children. He also takes care of his parents who are elderly and in poor health. Their medical bills create constant financial shocks. His brothers help out with their parents’ care, but they are also poor sharecroppers with large families and limited financial means.

68

v“The landlord takes 25% of my share of the harvest to cover input costs. This year I got no money from the annual sugar cane harvest after he took his cut. Nothing for my work.”

PRAGMATIC PROVIDERS

Aspirations & GoalsMore than anything Gul Hasan blames his lack of education for his situation, explaining “The arrangement with the landlord is fine, we don’t have any other option – we have no education and there is little work.” He desperately wants to prevent his sons from suffering the same fate. He is determined to get them educated—at least through secondary and further if he can afford it—so that they never have to work the land.

Gul’s plans for the future are limited but clear—if he gets a gets a bumper crop, he will buy livestock with the extra earnings as these will provide milk for the family and store store value for hard times ahead. If he has enough food to eat and limited medical expenses, he expenses, he will manage to save a bit of his casual labor labor earnings in his committee savings account. The driving driving force in his life seems to be his desire to educate his educate his children and insure they do not suffer the same fate.same fate.

Gul Hasan told us that the only chance he really has for a for a material change in his life is if one year he experiences a experiences a very large bumper crop. With that money he he could build up a base of livestock, which could generate generate additional earnings through milk production and and provide him with some financial cushion with which to to weather future shocks.

69

v“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.” PRAGMATIC PROVIDERS

Financial Attitudes, Behaviors, and ToolsGul said his life is a constant struggle; despite being a farmer, food is his largest non-medical expense. Like all other families in his share-cropping scheme, Gul farms 8 acres, cultivating sugarcane, wheat and rice throughout the year. According to the agreement with the landlord, he is entitled to keep 25% of the proceeds from the harvest, which is the primary earning with which he supports a family of 10.

No one else in his family earns, though his wife and daughter do help with the farming. He does not permit his sons to farm, “they will not touch the land, they need an education.” Whenever there is no work to do on his land, Gul seeks out day labor on other sharecroppers’ plots or with the landlord.

Through casual labor, Gul manages to make ends meet. The proceeds from the farming even in a good year barely support the family. This year, as is frequently the case, the harvest was poor.

Gul said he does not earn enough for him to build up any sort of financial reserve, so when droughts strike as they do every 2-3 years, he barely gets by. Typically, he has to sell off whatever assets he has built up—usually a few goats—to keep food on the table.

70

“We are barely getting by. We’re covering our expenses with casual labor. We have some work, but we’re barely making it.”

PRAGMATIC PROVIDERS

v

In fact, this past January Gul Hasan sold off all his livestock and spent down his savings with his committee. The sugar cane harvest was poor and he earned no money off of a year’s worth of work. Even after liquidating his assets, he has barely managed to keep food on the table given his parents chronic healthcare needs. The landlord took his full share of the harvest to cover the input costs. He is entitled to 25% of Gul’s 25% take, regardless of the size of the harvest (there is no risk sharing), only profit sharing.

Gul laments the fact that he has no leverage with the landlord to negotiate a better split on the proceeds. Some sharecroppers are able to get better terms, but only if they can afford inputs on their own and are willing to forgo the landlords input provision. Gul has been unable to make significant savings to afford inputs or to accumulate livestock, which he would need as back-up for repayment to feel comfortable with an input loan. As such, he feels he has no choice in the matter and is at the landlord’s mercy.

Gul’s daughter is not in school. He wanted to put her in school along with his sons so that when she grew up and married into a family she would be able to work and have independence and security in case they did not treat her well. However, his wife argued against schooling her, and insisted she stayed in the home to help with domestic work and farming as she

71

v“Whenever I have regular casual 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.”

PRAGMATIC PROVIDERS

Gul Hasan said that no women in his family had ever been educated or had any jobs, though all have helped with farming and managed the home. In his view, he thinks women should be educated, go outside the home, and work, and he said in his community there is no issue with this. In fact, he pointed out that nearly 20 girls in his group of sharecroppers have gone on to get secondary degrees, though none of them have jobs. He said the landlord simply would not allow them to work, because the extra earnings they would bring to the families could end up being enough to where they could quit farming for him. Gul and others in the community fear retribution from the landlord, who is politically connected with the local MPA and police, and who has the ability to kick them out of their homes (he owns the land on which they are built).

72

“In my community there is not that thinking, there's no problem with women working and spending money, going out of the home. Some girls in the community are educated—20 of them have secondary degrees—but none of them have jobs outside of helping on the farms. The landlord won’t let them.”

PRAGMATIC PROVIDERS

User Insights

73PRAGMATIC PROVIDERS

FOUNDATIONAL RESERVES UNLOCK NEW FINANCIAL STRATEGIES

Gul Hasan struggles to build and maintain financial reserves, whether in the form of savings or livestock. He consistently struggles with healthcare costs in particular, often liquidating his savings to meet his family’s needs. These savings challenges mean Gul 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.

Gul Hasan would benefit from products and services that enable him to put away small savings, while also affording his family access to basic and preventative health services or insurance to mitigate the constraining impact of sickness on his finances.

OPPORTUNITY: HEALTH SAVINGS AND INSURANCE ACCOUNT

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

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

w

Pragmatic Providers

Context

75

CONCENTRATED IN MIDDLE SOCIO-ECONOMIC CLASSES (SEC)

15%

17%

19%20% 20% 20% 20% 20%


24%24%

HOUSEHOLD DECISION-MAKING

51%

38%

7%

9%

21%

30%

21%

23%

Myself with someone else Spouse

0%

0%

UnknownOther peopleMyself

PRAGMATIC PROVIDERS

Pragmatic Providers

Pakistan average

SocioeconomicPragmatic Providers have the second highest SES after Communal elites and slightly better educated than average. Most men in the segment identify as the primary decision maker in the household, whereas most women do not.Pragmatic Providers are predominantly married (82%) men (67%) between 25 and 44 years old (59%) living in rural areas (60%) and concentrated in the top 3 SES quintiles (67%). They are slightly better educated than the average with 63% having completed primary or secondary school and only 27% having no education.

Financial decision making amongst Pragmatic Providers is strongly divided along gender lines. Just over half (51%) of Pragmatic Providers report being the primary decision maker in their household, and of those 90% are men. Another 8% report sharing this authority with someone else and amongst those 69% are men, in line with the segment average.

Women in the segment much more frequently rely on others for financial decision making. Over a fifth (21%) of Pragmatic Providers report their spouse makes financial decisions, and amongst this cohort 97% are female. Another 21% report that “someone else” makes financial decisions for them, and amongst this cohort 74% are male. As such, it is likely that “someone else” refers to an elder brother or a father in a joint household.

76

35%

25%

35%

40%

21%

24%

6%

7% 4%

No-one 1 person 2 people 3 people 4 or more people

4%


14%

15%

11%

13%

20%

27%

10%

13%

45%

31%

2 peopleNo phone access 0 or 1 person 3 people 4 or more people


40% 44%

3% 1%

35%

3% 1%

Formal

institutionsSocial sources Personal

sources

Informal

institutions


53%

PRAGMATIC PROVIDERS

Pragmatic Providers

Pakistan average

Social NetworkPragmatic providers can draw on fewer people for support when ill. Many rely on personal sources of money in an emergency, but a similarly large proportion rely on social sources. This later group may may struggle to raise funds in emergencies, and in fact over half the segment does.

Pragmatic Providers can draw relatively fewer people for financial support when ill than the average Pakistani (2nd

lowest amongst segments), but nevertheless are more resilient than the average Pakistani. Nearly a third have no one they can rely on in such situations and another third only have one person. This could be driven in part by a number of factors including their low trust in the community, low usage rates of informal financial tools, and predominant role as head of households where other people rely on them for support (as evidenced by the fact they would allocate more of a windfall to friends and family than any other segment).

In the face of financial shocks, nearly half rely on personal sources of money to cover costs, well above the Pakistani average. Notably fewer rely on social sources than the Pakistani average

Perhaps reflecting their smaller or less active social network, they speak on the phone with slightly fewer people per day than the Pakistani average and the other two other male dominated segments.

Pragmatic Providers

Behavior


Finances Financial Health Overview

Pragmatic Providers overall financial health is close to the Pakistani average, though this average masks marked differences with other segments, particularly greater challenges building reserves, and more success shaping income.INCOME & EXPENSESPragmatic Providers income smoothing strategies are relatively effective compared to other segments (second after Communal Elites), though not sufficient to consistently meet their daily needs in the face of persistent volatility and frequent emergencies. They struggle to meet expenses and pay bills, and face the most financial emergencies of any segment. Their challenges may be compounded by the fact that most do not report consistently planning for expenses.

RESERVESPragmatic Providers are are the least frequent savers and use the fewest savings channels in Pakistan, though save most frequently with family followed by banks. Nevertheless, they may have substantial finical reserves as evidenced by their strong ability to raise emergency funds. Some of these reserves may be livestock and land, as over a third of the segment reports owning livestock and nearly a third reports having purchased land.





portion (40%) have access to personally or communally owned land. While much of their land is inherited, they probably invest a significant share of their income into livestock rather than savings, though when given a windfall would prefer to allocate more money to bank savings suggesting they have other longer term goals for that they would use extra money to pursue.

RECEIVABLESPragmatic Providers are the least frequent borrowers overall and have the fewest active borrowing channels amongst Pakistanis. They most commonly borrow from family, but at the lowest rates amongst segments, followed by banks, which they borrow from at similarly high rates to Communal Elites. Yet, they seem to have a small and reliable social support network, but may prefer to use it for business and education 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.

PRIORITIESPragmatic Providers are most likely to keep a windfall in cash or save it in a bank, and less likely than average to invest it —suggesting they would prioritize short term liquidity to overcome challenges meeting expenses or long term savings to deal with unexpected (and frequent) financial emergencies. Moreover, they would share significantly more with friends and family, perhaps reflecting their anchoring role as head of household.





PLANNINGPragmatic Providers weaker than average planners across a number of metrics. Most do not consider themselves strong planners and less than 1/3 report having a plan to manage expenses. They are also the least conscientiousness amongst Pakistanis and the second least deliberate when it comes to saving. Their weak planning may in part drive their low savings rates and contribute to their struggles managing expense, especially in the face of income volatility and frequent financial emergencies.



19%

21%

17%

6%

4%

2%

28%

26%

19%

12%

7%

6%

2%

30%

Paying a debt



Future expense

Saving in a bank

Investing

Keeping as cash



Pragmatic Providers Pakistan average

Finances Financial Priorities

Pragmatic Providers are most likely to keep a windfall in cash or save it in a bank, and less likely than average to invest it —suggesting they would prioritize short term liquidity to manage difficult expenses or long term savings to deal with unexpected (and frequent) financial emergencies. Moreover, as head of household they would share significantly more with friends and family, perhaps reflecting their role as head of household. When offered an unexpected windfall, Pragmatic Providers are much less likely than others to invest it and are more likely to keep a larger share as cash or to save it in a bank. The prior likely reflects short term liquidity needs – they have the second highest number of expenses unpaid amongst segments (4.7, above the Pakistani average of 4.5). The later likely reflects a desire to pursue long term savings goals that they may currently struggle to meet as evidence by their low savings rates, such as emergency medical expenses—they face the most emergencies per year of any segment (1.2 compared with 1/year for the average Pakistani).

Pessimistic Individuals would allocate a larger portion of a windfall to friends and family than the average Pakistani. This

role as head of household, and the responsibilities they hold to provide financial support to close family and friends, and it may be a part of their resilience strategy. Such contributions could serve as an investment in their social safety net, which could help offset their frequent emergencies.

18%

15%

5%

22%

9% 8%

FINANCIAL ACCESS

Formal finance Mobile walletsInformal FinanceLess likely to have informal finance accounts such as chit funds, SHGs, etc.



Finances Financial Access

Confident Planners primarily manage finances through family, but are also amongst the most frequent bank and mobile money account owners and users in Pakistan. However, they are the least frequent members and users of informal financial groups.Pragmatic Providers are above average owners and users of formal financial accounts. They have the second highest rates of bank account ownership after Communal Elites, and the highest rates of mobile wallet ownership (though mobile wallet both ownership and usage rate are very low across all segments). Amongst all segments, they find financial services to be the least complicating and confusing to use, though nearly a third (30%) find them challenging in this regard.

Despite having lower trust in banks, Pragmatic Providers have similarly high rates of account usage for saving and borrowing as Communal Elites, who are the most trusting of all segments and the wealthiest.

Yet, Pragmatic Providers rates of informal financial group membership and informal usage are the lowest across segments, including for friends, family, and at home savings. Only 9% are members of an informal financial group, and only 40% ever save with family or in the home.

83

NUMBER OF UNPAID EXPENSES

4.71

4.51


1.20

0.99

PRAGMATIC PROVIDERS

Pragmatic Providers

Pakistan average

Finances Shaping Income & 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 frequent emergencies. They struggle to meet expenses, and face the most financial emergencies of any segment. Their challenges may be compounded by their inconsistent expense planning. Pragmatic Providers have the second highest number of expenses unpaid amongst segments (4.71) and most when asked do not report having a plan for expenses – 22% say they do not, 30% say the do, and the remaining 48% responding “neutral.” Further, they are the second least confident segment in their ability to pay all household bills after Careful Hustlers, though only 20% say they are not confident, 47% respond “neutral.” They also face the most financial emergencies per year of any segment (1.2).

Pragmatic Providers have the second most stable income after Communal Elites, though still 26% report high income volatility and another 44% report medium levels. Given their challenges with expenses and frequent emergencies, they likely struggle to manage liquidity sufficiently to consistently meet daily household

30% 44% 26%

34% 21% 46%

MiddleLow High


CONFIDENCE IN ABILITY TO PAY ALL HOUSEHOLD BILLS

5%

17%

28%

47%

21%

28%

40%

4%

5%

Disagree

Strongly

agreeAgreeNeutral

Strongly

disagree

3%

13%

8%

14% 15%

3% 2%

29%

21%

8%10%

23%

4% 4%


6 months

Once every 3

months

SAVINGS FREQUENCY OVERALL

84

45%

PRAGMATIC PROVIDERS


Finances Building Reserves

Pragmatic Providers are are the least frequent savers and use the fewest savings channels in Pakistan, though save most frequently with family followed by banks. Nevertheless, they may have substantial finical reserves as evidenced by their strong ability to raise emergency funds. Some of these reserves may be livestock and land, as over a third of the segment reports owning livestock and nearly a third reports having purchased land. Pragmatic Providers are the least frequent savers and use the fewest savings channels in Pakistan, 45% never save (the highest rate amongst segments) and another 13% almost never save. Of those who do save, 22% save once every 3-6 months (slightly above the national average), and another 20% save monthly or more (below the national average). 70% report having no active savings channels in the past 3 months. Their low rates of saving may reflect their occupation as farmers, where they earn seasonally, spending reinvesting, and distributing most of their earnings amongst family.

Despite their low savings rates, they may nevertheless have substantial finical reserves as evidenced by their strong ability to raise emergency funds (equal to 6 months income). They likely store their wealth in the form of land and livestock – 32% report having bought land and 60% report having inherited it, while 40% report owning livestock.

SAVINGS CHANNELS

85

11%8%

3% 2% 3%

9%

16%

23%4%

3%

1%

2%

12%

9%

Mobile moneyBank

1%1%

FamilyGroups and friends

15%

11%

4%3%

4%

11%

28%

32%


Once in three months or more

PRAGMATIC PROVIDERS


Finances Building Reserves

Pragmatic Providers are the second most frequent savers with banks after Communal Elite, though 85% don’t save in banks. 80% said they don’t save in banks because they don’t have a bank account (slightly below national average of 83%). Of those who do save in banks, 11% save in a bank at least once every three months (compared with 8% nationally).

Pragmatic Providers are the least frequent savers through informal groups and friends, and second least frequent savers through family and the home. 92% are not a member of an informal financial group and another 4% report never saving with one despite being a member. 60% report never saving at home, and only 16% report doing so once every three months or more, well below the national average of 23%)

These low rates of informal saving may reflect gendered dynamics of financial roles in the household where women are responsible for making more liquid or social savings, as well as the male skew of the segment.

86

61%

11% 9% 8% 8%3%

54%

9%13%

8%13%

2% 0%0%


6 months

Once every 3

months

PRAGMATIC PROVIDERS

BORROWING FREQUENCY

Finances Cultivating Receivables

Pragmatic Providers are the least frequent borrowers overall and have the fewest active borrowing channels amongst Pakistanis. They most commonly borrow from family, but at the lowest rates amongst segments, followed by banks, which they borrow from at similarly high rates to Communal Elites. Yet, they seem to have a small and reliable social support network, but may prefer to use it for business and education 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. Pragmatic Providers are the least frequent borrowers overall and have the fewest active borrowing channels amongst Pakistanis, which is not surprising given they are the segment least comfortable with holding debt (see psychometrics). 61% report never borrowing and another 20% report borrowing only once per year or less.


Pragmatic Providers

Pakistan average

81%

76%

16%

21%

2%

2

2%

10

24%

30%

29%

28%

36%

32%

10%

11%

SOURCE OF BORROWING



87

5%2% 3%

15%

21%

4%

4%2%

4%

19%

21%

0%

9%

1% 0% 0%

6%

1%0%

4%

7%

34%

42%

2%

PRAGMATIC PROVIDERS

Mobile moneyBank FamilyGroups and friends

Finances Cultivating Receivables

Yet, they may have a small and reliable emergency support network that they do not tap regularly for loans. They report the second highest ability to raise emergency funds and are the most certain in their ability to rely on community for investment support in education and business. They may also cover emergencies through the sale of assets like livestock or land.

They are the second most frequent borrowers from banks, with nearly half of account holder having do so, similarly high borrowing rates to the leading Communal Elites who have higher account ownership. 7% borrow from banks once per year or more, which is nearly double the national average. While their relative bank borrowing rates are high, overall rates remain low. Like all other segments, they borrow very infrequently via mobile money. Of the 8% of Pragmatic Providers who have a mobile money account, nearly one fifth (18%) report having borrowed using it.

Pragmatic Providers are the least frequent borrowers through informal groups and friends, and family. 93% report not having access to loans from informal groups or friends, by far the highest rate of any segment. Meanwhile, 56% report never borrowing from family, though 22% report having borrowed from family in the last year (the lowest rate of any segment). This makes family the most frequent source of loans for this segment.

Pragmatic Providers

Pakistan average

Not very possibleImpossible Somewhat possible Very possible

ABILITY TO RAISE EMERGENCY FUNDS




Pragmatic Providers weaker than average planners across a number of metrics. Most do not consider themselves strong planners and less than 1/3 report having a plan to manage expenses. They are also the least conscientiousness amongst Pakistanis and the second least deliberate when it comes to saving. Their weak planning may in part drive their low savings rates and contribute to their struggles managing expense, especially in the face of income volatility and frequent financial emergencies.Most Pragmatic Providers do not identify as strong planners. strongly agree that they are they type of person who makes follows through with them compared to 67% nationally, though disagree or strongly disagree with this idea compared to 17%

Only 29% report having a plan to manage their expenses, 41% of Pakistanis overall. This is especially surprising report being the primary decision maker. Gender dynamics may this. Women in the segment may plan expenses, but men, nearly whom identify as head of household, may not.


MAKES A PLAN AND FOLLOWS THROUGH WITH IT


22%

31%

47%

24%

26%

36% 5%

Agree

4%1%

4%

Neutral Strongly agreeDisagreeStrongly disagree

51%

38%

7%

9%

21%

30%

21%

23%

Myself with someone else Spouse

0%

0%

UnknownOther peopleMyself

9%

4%

15%

13%

36%

16%

29%

53%

11%

13%

Disagree

Strongly

agreeAgreeNeutral

Strongly

disagree

54%

64%

28%

19%

17%

17%

14%

14%

19%

22%

33%

32%

17%

18%

18%

14%

Low Medium High

5 or more times per day1 -2 times per day 3 -4 times per dayNo phone access Rarely/ never


TechnologyPragmatic Providers are the second most frequent users of digital technology and phones, and are frequent texters, suggesting they have at least baseline levels of digital literacy. Over 2/3 own feature phones and ¼ own smartphones. They are the second most frequent user of the internet, social media, and digital accounts in general, though monthly usage rates of each remain quite low and in line with Pakistani averages. Pragmatic Providers are the second most frequent users of digital technology. They have slightly greater rates of personal smartphone ownership, led by youth (18-34 year old's) amongst their ranks, but slightly lower rates of access to communal smartphones, the elderly (65+ having the highest rates of communal access). Overall, they rank second in smartphone access, with similar rates to Modest Upholders but well behind Communal Elites. They have the second highest rates of feature phone access after Modest Upholders.

Pragmatic Providers are the second most frequent phone users, though 52% use a phone just two times per day or less. They are the second most frequent texters, with 28% texting daily (compared with 19% nationally) and 11% at least a few times per week (compared with 8% nationally).

TECH USE FREQUENCY

PHONE USAGE


58%

52%

17%

17%

30%

31%

20%

19%

4%

6%

76%

75%

Personally Own

90

Common Property Don’t Own

PRAGMATIC PROVIDERS

Personally Own Common Property Don’t Own

TechnologyThey are also the second most frequent user of the internet, social media, and digital accounts in general, though monthly usage rates of each remain quite low in the high single digits or low teens, in line with Pakistani averages, but well above the two lower ranking segments (Modest Upholders and Careful Hustlers).

Pragmatic Providers are Pakistan’s least frequent TV watchers, though this is still by far the media channel they most use amongst those we measured. Only 31% report watching TV one a month or more, compared with 45% nationally.




Pragmatic Providers

Psychometrics

10%

41%

13%

20%

77%

40%

6%

27%

7%

13%

23%

21%

30%

19%

34%

20%


LOCUS OF CONTROL

SELF-EFFICACY

HighLow Medium



Psychology Self-perception

Pragmatic Providers by far have the strongest sense of control over their lives and above average belief in their own abilities. Despite their strong sense of agency, they have by far the lowest self-esteem in Pakistan and very low belief they will be better off in the future, which may be in part driven by their struggles paying bills and frequent emergencies. This may also in part explain their low usage rates of social financial tools, they may not want to expose their finances to their peers or risk poor performance out of a sense of shame and fear of judgement. Pragmatic Providers by far have the strongest sense of control over their lives and above average belief in their own abilities (2nd highest). This outward sense of agency may be driven in part by the fact that many are male heads of household who feel a sense of control over their household and responsibility for its affairs and outcomes. In Pakistan, having an internal locus of control correlates with less frequent saving with family, both characteristics we see in this segment, which may be due in part to a desire to insulate and exercise more personal control over

29%

20%

38%

20%

16%

26%

7%

16%

10%

17%

83%

40%

8%

21%

9%

39%


Low HighMedium

HighestLow HighLowest Medium


Despite their strong sense of agency, Pragmatic Providers have by far the lowest self-esteem in Pakistan and very low belief they will be better off in the future (2nd lowest). Despite their relatively high SES, these traits may be due in part to the struggles they face covering expenses, dealing with frequent financial emergencies, and achieving their aspirations for themselves and their families. In Pakistan, having low confidence in a better future correlates with lower rates of saving with informal groups and friends, characteristics we see in this segment.

Pragmatic Providers may not want to expose their finances to their peers out of a sense of shame and fear of judgement.Given their strong sense of agency, they may blame themselves for their perceived shortcomings, negatively affecting their self-esteem and views of the future. Their dim view of the future may further lead to more present-minded financial behavior, and suppress their savings frequency.

SELF-ESTEEM

CONFIDENCE IN FUTURE


55%

41%

24%

19%

21%

40%

28%

20%

32%

28%

19%

14%

10%

25%

10%

13%


Low Medium High


Psychology Financial Attitudes

Pragmatic Providers have the lowest conscientiousness amongst Pakistanis and the second lowest deliberateness when it comes to saving. This may in part drive their weak planning behavior and low savings rates. Most do not consider themselves strong planners or have a plan to manage their expenses, yet they do not consider themselves impulsive. Moreover, they by far have the lowest comfort with debt and feelings of dependability of all segments, perhaps driving their aversion to borrowing. They may fear failing to repay loans and risking asset seizure or damage to their relationships and status.Pragmatic Providers have the lowest conscientiousness amongst Pakistanis and the second lowest deliberateness (well below the national average). Their below average conscientiousness, understood as diligence and thoroughness, may in part drive challenges they face meeting expenses, though it is not evident in their income shaping behavior, where it appears they deploy effective strategies for moderating volatility.

CONSCIENTIOUSNESS



10%

10%

20%

32%

40%

16%

24%

34%

7%

9%

95

IMPULSIVITY

PRAGMATIC PROVIDERS




Their low levels of deliberateness, specifically understood as above average belief in the fungibility of money (including budgeted and saved money), may in part drive their low frequency savings behavior. It may be that they are quick to redeploy money otherwise intended for formal or informal savings channels to spending needs and investment opportunities as they arise, for example investments in livestock purchases and their social safety net, through gifts and support to family and friends. In fact, in Pakistan low deliberateness correlates with lower likelihood of saving with family, friends, and groups, behaviors demonstrated by Pragmatic Providers.

Despite their low conscientiousness and deliberateness, they have the second lowest levels of impulsivity. This potentially bolsters the argument above. Their spending and investment may not be impulsive but rather part of a financial strategy that builds reserves and receivables outside of formal accounts and informal savings and loans groups.

64%

40%

21%

24%

15%

36%

96

OPENNESS

DEPENDABILITY

DEBT ORIENTATION

PRAGMATIC PROVIDERS


HighMediumLow

2%

HighestLowest HighMediumLow

39%

28%

26%

15%

27%

39%

1% 7%

16%

48%

22%

26%

18%

18%

44%

7%

16%

0%

Middle Highest

0%

HighLowLowestPsychology Financial Attitudes

Pragmatic Providers by far have the lowest comfort with debt and lowest feelings of dependability of all segments (both well below national average). Given that they are the least frequent borrowers despite being relatively high SES and having above average access to formal financial services, it may be that these psychological traits are in part driving their aversion to borrowing. In particular, the fact that most view themselves as unreliable may cause them to avoid informal borrowing as they fear damaging their relationships and status through failure to repay loans.

Pragmatic Providers are the second least open segment, with nearly 2/3 measuring low on openness (well below national average). In Pakistan, low openness correlates with lower likelihood of being able to pay bills, less frequent borrowing from family, and allocating a higher percentage of a windfall to sharing with friends and family. Pragmatic Providers demonstrate all of these behaviors above national averages. However, their low openness does not translate to lower rates of technology usage. In fact, they are the second most frequent users of digital technology overall in Pakistan

46%

20%

31%

20%

11%

20%

5%

11%

7%

29%

32%

20%

33%

20%

20%

20%

9%

28%

7%

12%

5%

18%

27%

55%

23%

22%

39% 5%


Low HighestLowest HighMiddle

High HighestLow MiddleLowest

2%

Strongly disagree Disagree Strongly agreeAgree

3%

Neutral

Psychology Trust

Pragmatic Providers have by far the lowest trust in people and second lowest trust in their social financial networks amongst Pakistanis, perhaps driving their low rates of informal group membership and social financial tool usage. 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.Amongst all segments, Pragmatic Providers have by far the lowest trust in people in their communities. The percentage of Pragmatic Providers that have the “lowest” trust level in people is more than double the average for Pakistan. This attitude seems to be reflected in the lower number of people they can draw on when sick.

Moreover, they have the second lowest trust in their social financial networks (65% reporting low to the lowest levels of trust). In keeping with these low levels of trust, only 40% would rely on social sources of support in an emergency compared with 55% nationally, and they can draw on relatively fewer people for


TRUST IN PEOPLE


5%

18%

27%

55%

23%

22%

39% 5%

15%

38%

5% 52%

24%

26%

28% 5%


2%

Strongly disagree Disagree Strongly agreeAgree

3%

Neutral

HighestHigh

2%

Medium

4%

LowLowest

Psychology Trust

financial support when ill than the average Pakistani (2nd lowest amongst segments). Moreover, most are doubtful or uncertain as to whether they could rely of their community for support for business and school fees.

In Pakistan, having low financial trust in one’s social networks correlates with a lower likelihood of being able to raise emergency funds. Pragmatic Providers report the second highest ability to raise emergency funds, though relatively few (40%) would rely on social sources to do so, well below the Pakistani average of 53%. In fact, 44% would rely on personal sources to finance emergency spending, well above the Pakistani average of 35%. This may reflect their higher SES and ability to rely on their financial reserves including land and livestock assets.

Yet they have the highest perceptions of equality within their communities, though this perceived equality does not translate to trust. In Pakistan, having a higher belief in community equality correlates with having lower daily and weekly income volatility. It may be that people with higher SES or those formally employed may have more homogenous social circles.




52%

22%

34%

58%

14%

20%

10%

7%

24%

25%

41%

33%

16%

27%

9%

9%

24%

20%

20%

20%

28%

20%

14%

20%

14%

20%


TRUST IN BANKS

TRUST IN GOVERNMENT

TRUST IN MEDIA

RESPECT FOR AUTHORITY

HighestLowest MiddleLow High

HighestHighLowest MiddleLow

17%

15%

23%

23%

30%

16%

21%

35%

10%

10%

High HighestLow MiddleLowest

Medium HighLow


Psychology Trust

Pragmatic Providers have low trust in major institution, including the second lowest trust in banks, media, and government, each below Pakistani national average. This may in part be due to the fact that they have the lowest respect for authority figures of all segments in Pakistan. Their low levels of trust in banks does not necessarily translate into lower levels of bank account usage amongst account owners. Amongst Pragmatic Providers, 22% own accounts, the seconds highest level of account ownership after the wealthier and better educated Communal Elites (28% own accounts), who also have the highest trust in banks.

Pragmatic Providers who hold bank accounts have savings and borrowings rates just slightly below Communal Elites. While their low trust in banks may suppress overall account ownership, once Pragmatic Providers own bank accounts, it does not seem significantly negatively impact their usage.


Psychology Gender

Less than half of Pragmatic Providers believe that men are better financial managers than women, however a quarter outright refute the notion. Yet, relatively few (about half) believe that wives and husbands should know each others financial affairs and that girls and boys should be educated about money in the same way.Pragmatic Providers report the lowest belief amongst segments that men are better financial managers than women. 40% agree to strongly agree that men are better financial managers than women compared to 62% nationally, while 23% disagree to strongly disagree compared to 19% nationally).

However, they report by far the lowest financial openness within the family amongst all segments. 49% report agree to strongly agree that wives and husbands should know each others finances, while 24% disagree or strongly disagree, compared with 80% and 10% nationally, respectively.

Pragmatic Providers feel least strongly amongst segments that boys and girls should be educated about finances in the same manner. 47% agree to strongly agree compared with 79% nationally, and 25% disagree to strongly disagree compared with


WIVES AND HUSBANDS SHOULD KNOW EACH OTHER’S FINANCIAL AFFAIRS

GIRLS AND BOYS SHOULD BE EDUCATED ABOUT MONEY IN THE SAME WAY

9%

6%

14%

13%

37%

20%

27%

46%

12%

16%

NeutralStrongly disagree Disagree Agree Strongly agree

11%

4%

13%

6%

27%

9%

32%

55%

17%

26%

Strongly disagree Disagree Strongly agreeAgreeNeutral

10%

4%

15%

8%

27%

9%

31%

55%

17%

24%

Agree Strongly agreeNeutralDisagreeStrongly disagree


Psychology Gender

Pragmatic Providers are split in their views on whether the gender of a loan applicant influences whether the loan is issued, though they are more gender biased than average on this metric. Only 30% agree or strongly agree that gender does affect the decision, compared with 56% nationally, meanwhile 31% disagree or strongly disagree and feel it does not, compared with 21% nationally.

They are also split fairly even in their views on gender and technology, and again are more biased against women here than the average Pakistani. 31% agree or strongly agree that women understand new technologies better than men, compared to 48% of segments nationally, while 31% disagree to strongly disagree, compared to 27% nationally.

11%

6%

19%

21%

38%

25%

24%

36%

7%

12%

NeutralDisagree Strongly agreeAgreeStrongly disagree

9%

5%

21%

17%

40%

23%

21%

42%

9%

13%

Strongly agreeAgreeNeutralDisagreeStrongly disagree




How might we build formal financial products that build trust and confidence in the future to deepen usage?

+How might we create tools that help them better plan for and manage expenses, especially in the face of

relatively frequent financial emergencies?


OPPORTUNITIES

Create products and services that:

• Support financial planning, especially for expenses• Anticipate or insure against frequent financial emergencies

• Restrict liquidity of savings, but include emergency release valves recognizing their volatile incomes and frequent emergencies

• Reduce the perceived risks of borrowing • Appeal to and reinforce sense of agency by helping them establish clear and achievable near term financial goals that can mature into longer term goals

Engage through:

• Digital channels, leveraging their relatively high levels of tech usage to deliver personalized financial planning tools through digital channels, especially amongst youth (18-34) in this segment)

• Appeals to their sense of agency, by setting them up for and celebrating their small wins

Design Principles & Inspiration


Modest UpholdersPAGE 105

OverviewPAGE 107

User ProfilePAGE 114

AnalysisPAGE 140

Opportunities

ModestUpholders41% OF POPULATION

Primarily married, rural women in lower SES quintiles, Modest Upholders are strong financial managers likely coordinating family finances despite not being the primary or formal financial decision makers in their families. They are future-oriented planners and savers who manage their money mostly through family and close friends.

Modest upholders are predominantly rural, marriedwomen between 25 and 44 years old with low socioeconomic status. Almost half are in the bottom two SES quintiles, and nearly half have no education. Most do not report participating in household financial decision making.

They are future oriented, strong planners, and consider themselves dependable. They have high self-esteem despite feeling their fate is outside of their control and that they are not particularly efficacious.

Despite being the poorest segment in Pakistan, Modest Upholders have average financial health suggesting they are making the best of challenging circumstances.This may be due in part to their strong financial planning. They are also the second most frequent savers in Pakistan, and are fairly resilient due in part to the robust social safety nets they maintain.

Modest Upholders manage their finances primarily though family and close friends. Despite low education and low rates of formal account ownership, the majority of Modest Upholders feel they understand financial services and trust banks; the high savers amongst them may be a strategic target customer for FSPs. 105MODEST UPHOLDERS

Demographics+ 79% are female+ 82% are married+ 72% are not primary financial decision makers+ 65% aged between 25-44 years old, and 15% between

18-25 + 62% rural+ 48% have no education+ 49% SES 2 or lower+ 73% do not make their own household financial

decisions+ 23% own land

Behavior+ 10% have formal accounts+ 18% use informal financial groups+ 41% save monthly or more (2nd)+ 32% save with family or at home+ 27% borrow at least once every three months (2nd)+ 25% borrow from close family members at least once every

three months+ 45% somewhat to very possible to raise emergency funds+ 45% own feature phones, 17% own smartphones+ 49% have a plan to manage their expenses

Psychometrics+ highest self-esteem of any segment+ most external locus of control + lowest feelings of self-efficacy + significantly more positive view of the future than all

other segments besides the Careful Elite,+ highest conscientiousness, deliberateness and

dependability+ highest trust in people, social financial networks,

government and the media; average trust in banks+ high openness, but strong bias against women in

financial matters

AspirationsModest Upholders aspire to keep their family’s finances in good order and needs met, likely, given their reported household roles, with a particular focus on daily expenses and education investments. They may also aspire to boost their family’s earnings by guiding investments in family business initiatives, including those they may lead.

106MODEST UPHOLDERS

107

SelmaA MODEST UPHOLDER

“My husband cannot be bothered with the dramas and expenses of the household.”

DemographicsSelma is a middle-aged woman and mother of five (ages 7-16), living in Rawalpindi. She runs a small tailoring business from the from the home to raise extra income to supplement her husband’s earnings. He works at a steel mill and earns a regular salary, though with so many kids she feels her family’s finances are tight.

108MODEST UPHOLDERS

JourneySelma’s mother arranged her marriage. She cared for her daughters very much and believed Selma would be best served by marrying within the family. So, when Selma came of age, she was married to a distant cousin, and sent from her home in Lahore to live with him in Rawalpindi.

Selma is very close with her mother. Her mother taught her the value of savings and education, the value of financial independence, and how to use discerning logic to overcome problems in life. Selma’s mother has always been her safety net.

As newlyweds, Selma and her husband struggled financially. Frustrated by her living situation – she and her husband shared a cramped apartment with a leaky roof – Selma asked her mother for help. Her mother sold property and used the cash to build the apartment that Selma and her family rent in Rawalpindi until today.

109MODEST UPHOLDERS

“My husband doesn’t think the same way, he doesn’t think our daughter should be educated. I give my husband logic; if that doesn’t work I ask my mother to talk to him.”

Aspirations & GoalsSelma’s main motivation is to be a good mother and in particular to provide her four daughters the tools they will need to be secure and financially independent in life. She pushed her husband to support their daughters’ education - at least through the secondary school. Monthly school fees are a burden, but Selma succeeded in making them a priority within the household.

Selma is wary of financial risks – she worries about the family’s high monthly expenses and her husband’s employment prospects. She thinks he lacks a “business mind” and has successfully pushed him to stay in his job, which she views as a more stable option than opening a business, something he wants to do. However, Selma believes she has a mind for business and when her daughters graduate she hopes to employ them to help her scale her tailoring business.

Selma finds it difficult to trust people in Rawalpindi in part because it’s she was not born there and does not consider it her home community. At times she even feels her husband is unwilling and unable to advise her on important matters. Selma has always been closest and relies on her sister and her mother, and works to maintain a strong relationship with them, while generally avoiding strangers.

110MODEST UPHOLDERS

“Times have changed, children demand of things. Education for my daughters is a the need of time. If they’re educated, they can become financially independent”.

Financial Attitudes, Behaviors, and ToolsSelma thinks that her ability to drive major financial decisions is unique amongst women in her context. She attributes her power to her husband’s relatively high tolerance and her sharp logic. She says she has refined her ability to negotiate with him and is she is aware of his temper and the limits of his tolerance.

Selma and her husband share management of the household finances, which is dominated by significant fixed monthly expenses (school fees, rent, utilities). Selma’s husband works at a steel mill and is the main breadwinner. He contributes most of his weekly income to fixed monthly expenses, and gives Selma a daily stipend to manage the variable household expenses, which she plans out on a weekly basis. Once household expenses are covered, she saves the remainder. Selma also has a small tailoring business she runs from home. She saves her daily earnings from the business.

Though Selma’s family income is stable, its not always enough. During Ramadan, for example, her husband’s income is reduced by half and their expenses double. This is partially offset by an uptick in her tailoring earnings, but often she has to borrow.

“You should be able to live with what you have, not from loans...I see my pockets instead of the price.”

111MODEST UPHOLDERS

Selma hates the idea of borrowing money—she perceives it as shameful that someone would have to borrow beyond their means. When she has to borrow, she almost always goes to her sister and mother. They are supportive, but the tradeoff is hearing their criticism and judgement about her financial management.

Last year for the first time, her husband insisted on taking a Ramadan loan from an MFI that his cousin recommended. They have managed to make all repayments on schedule so far, but Selma doesn’t like paying interest and feels constantly worried about missing a payment. She would not want another loan from a formal institution.

Selma strongly believes in saving as a pillar of financial stability. She keeps a small amount of cash savings at her house and to avoid the temptation of frivolous spending (she has developed a habit of buying fine clothes for herself and her children), keeps a larger share of her savings at her sister’s house for safe keeping. She earmarks these longer term funds towards specific goals including future medical expenses and trips to see her mother in Lahore. One year she was so successful in saving, she purchased a refrigerator.

In addition to her more moderate savings goals, Selma dreams of saving to buy her own house, and hosting large weddings for each of her four daughters. Because small and medium expenses tend to eat away at her savings, she has been unsuccessful in saving towards these longer-term goals, but is very intrigued by locked savings schemes which she has heard about from her brother. She feels that, if her mother, sister, or brother recommends it, it must be something she should try. 112MODEST UPHOLDERS

“Your family knows about your financial status, so you feel comfortable borrowing from them.”

User Insights

113MODEST UPHOLDERS

STIGMATIZATION OF BORROWING CONSTRAINS OPPORTUNITIES FOR INVESTMNET IN BUSINESS & EDUCATION

Selma wants to provide her 4 daughters an education and bring them into her tailoring business with hopes of growing it. Yet, she feels that borrowing is shameful, so will try to finance these financial goals through savings alone.

Selma would benefit from a loan to support investment in her tailoring business to become more efficient and productive, or to finance her four daughters education.

DESTIGMATIZE LOANS BY CHARACTERIZING THEM AS INVESTMENT

Selma not only feels that borrowing is shameful, but experiences anxiety around payments. Despite having never missed a payment, she constantly worries that she will. In a sense, this anxiety driver her attentiveness to her repayment schedule and reduces the risk that she will mis a payment, but makes it more unlikely that she will borrow again.

Selma needs a loan product that is framed as an investment product and equipped with features that relieve her anxiety around missed repayments, whether through reminders, generous grace periods, or recharacterizing repayment all together.

w

Modest Upholders

Context

20%

38%

8%

9%

47%

30%

26%

23%

22%

20%

17%

14%

20% 20% 20% 20% 20%


27%

0%


0%

UnknownOther peopleSpouseMyself

Modest Upholders Pakistan average

CONCENTRATED IN MIDDLE SOCIO-ECONOMIC CLASSES (SEC)

HOUSEHOLD DECISION-MAKING

115MODEST UPHOLDERS

SocioeconomicModest Upholders are relatively low-SES and poorly educated. Two thirds of Pakistani women fall into this segment, and most within are not the primary financial decision makers in their households. Many non-elder Pakistani men in joint households likely fall into this segment.Modest upholders are predominantly rural (62%), married (82%) women (79%) between 25 and 44 years old (65%), with low socioeconomic status. Almost half of them are in the bottom two SES quintiles, and nearly half have no education.

Most are not, alone or together with someone else, the primary decision makers in their homes. In fact, 73% report that someone else or their spouse makes the major financial and economic decision in their home.

Amongst the 47% of Modest Upholders who report that their spouse makes household decisions, 99.5% are female. Amongst the 26% who report that “other people” make their financial decisions, 63% are female, suggesting that both men and women in this group may be non-elder members of joint households. Amongst the 20% who report making their own decisions alone, 53% are female, suggesting there are a number of female heads of households within this segment.

22%

25%

39%

40%

25%

24%

9%

7%

5%

4%

1 person 4 or more peopleNo-one 3 people2 people

49%40%

2% 1%

35%

3% 1%

Formal

institutions

Social

sources

Personal

sources

Informal

institutions

53%

18%

15%

18%

13%

29%

27%

15%

13%

20%

31%

2 people 4 or more people0 or 1 person 3 peopleNo phone access




Modest Upholders

Pakistan average

116MODEST UPHOLDERS

Social NetworkModest Upholders can draw on more people when sick than all but Communal Elites and have an above average ability to raise funds in the face of emergencies despite their low socioeconomic status. Though nearly half rely on social sources of financial support in emergencies, over 1/3 use personal sources suggesting not all can or choose to rely on their networks. Modest Upholders can draw on more people when sick than all but Communal Elites, yet they speak to fewer people on the phone than other segments. This may be driven in part by the fact that they are women and have less access and lower rates of phone usage then men.

Their relatively strong social support network may be partly responsible for their above average ability to raise funds in the face of emergencies, despite their low socioeconomic status.

However, their financial resilience is not based solely on the size and reliability of their social network. Despite their low SES, 40% rely on personal financial reserves in emergencies, rather than support from others or loans.

Modest Upholders

Behavior

118MODEST UPHOLDERS


Modest Upholders’ overall financial health is close to average for Pakistan. This may not be surprising given they make up 40% of the overall population, though in light of their low SES their relative financial health suggests they are making the best of challenging circumstances.SHAPING INCOME & EXPENSESModest Upholders experience significant income volatility, though below the national average, yet despite this are amongst the expense mangers, suggesting they effectively manage liquidity to daily household needs and pay short-term bills, in line with their

BUILDING RESERVESModest Upholders save consistently with family and at home more than any other segment, proving to be consistent, deliberate savers who look for multiple savings channels in spite of their lack of formal account access and volatile incomes.



119MODEST UPHOLDERS


CULTIVATING RECEIVABLES Despite being the least wealthy segment, Modest Upholders have intermediate confidence in their ability to raise funds to handle emergencies. Their confidence may be linked to their marital status and ability to rely on their savings and their spouse for support, as well as the strength of their social networks.

PRIORITIZINGModest Upholders would reserve a larger share of a windfall to cash reserves and paying off debt than the average Pakistani suggesting they prioritize smoothing income, meeting expenses, and maintaining good standing with creditors who may provide crucial liquidity.

PLANNINGModest Upholders identify as effective planners and in fact appear to be strong expense planners and deliberate savers despite having limited control over household financial decisions. Perhaps due to a division of household roles along gender lines, modest upholders are more likely than all but the communal elites to have a plan to manage their expenses.



28%

30%

17%

9%

8%

6%

2%

28%

26%

19%

12%

7%

6%

2%

Paying a debt

Investing

Keeping as cash

Saving in a bank



Future expense

FINANCIAL PRIORITIES

120MODEST UPHOLDERS


Modest Upholders would reserve a larger share of a windfall to cash reserves and paying off debt than the average Pakistani suggesting they prioritize smoothing income, meeting expenses, and maintaining good standing with creditors who may provide crucial liquidity.Modest Upholders would reserve a larger share of a windfall to cash reserves and paying off debt than the average Pakistani. Given the fact they are inclined towards financial planning and struggle with highly volatile incomes, it comes as no surprise that they would keep liquid cash on hand to smooth income and meet short term expenses. Moreover, their higher than average prioritization to paying off debt likely reflects their desire to keep in good standing with their creditors who may provide crucial liquidity.

Modest would allocate less of a windfall to bank savings and sharing with family and friends. Through qualitative research, we found people typically save in banks only when they have a specific longer term use for the money in mind, and do not need it to generate significant short or medium term returns. Given that they would allocate over half of windfall to cash reserves or investments, it may be the case that Modest Upholders expenses and need to immediately grow their income outweighs their desire to build financial reserves.


18%

15%

5%

10%

18%

3%

Formal finance Mobile WalletsInformal FinanceLess likely to have informal finance accounts such as chit funds, SHGs, etc.

FINANCIAL ACCESS


121MODEST UPHOLDERS


Modest Upholders primarily manage finances through family. Their rates of bank account and mobile wallet ownership and usage are very low and well below average, though they are above average members and users of informal groups.Modest Upholders have significantly lower levels of formal account ownership, including mobile wallets, than the average Pakistani, which is already low. Given that the vast majority of people in this segment are women, it is likely that gendered structural and normative barriers to financial services and mobile technology are driving below average rates of account ownership. The lack of formal financial products tailored for the needs of Pakistani women likely also is a driver.

Modest Upholders are more frequent users of informal financial services than the average Pakistani, but these numbers are still very low and do not account for the segments high rates of saving and borrowing with family as evident in the following analysis. Most Modest Upholders report saving and borrowing with family or at home, as opposed to with informal groups like ROSCAs that may require travel and contact with people outside of the family. Their rates of informal usage would likely be higher if it weren’t for the strong social norms in Pakistan that constrain women’s mobility and social networks.

Strongly disagree

122MODEST UPHOLDERS


Modest Upholders experience significant income volatility, above the national average, yet despite this are amongst the most effective expense mangers,suggesting they effectively manage liquidity to meet daily household needs and pay short-term bills, in line with their priorities.

Most Modest Upholders experience to significant income volatility, the second highest after Careful Hustlers. 59% do not know how much money they will earn when they wake up each morning and 71% report medium to high income volatility compared with 66% nationally. Their high income volatility could be driven in part by gender dynamics, if we assume that many women are not earning income and aware of their husbands earnings.

They also report the second highest confidence amongst segments in their ability to pay their household bills on time, with 53% feeling that they are typically able to do so compared with 45% of Pakistanis overall.

Moreover, they report the second lowest number of unpaid expenses amongst segments, with 4.3 unpaid per month compared with an average of 4.5 for Pakistanis overall.

15% 57%29%

MiddleLow High

34% 21% 46%

0.98

0.99

4.34

4.51

5%

17%

28%

26%

21%

49%

40%

5%

5%

2%

Strongly agreeAgreeNeutralDisagree


NUMBER OF UNPAID EXPENSES (MONTHLY)


CONFIDENCE IN ABILITY TO PAY HOUSEHOLD EXPENSES

16%

6% 6%

31%

5% 5%

29%

21%

8%10%

23%

4% 4%


6 months

Once every 3

months

32%

SAVINGS FREQUENCY OVERALL

4%

63%

2% 3% 3%

18%

3% 2%6%

61%

5% 4% 6%

14%

3% 2%

Every dayAt least once every 3 months

At least once every year

Don’t have At least once a week

Never Less than once a year

At least once a month

SAVINGS WITH FAMILY OR HOME

Modest Upholders

Pakistan average

123MODEST UPHOLDERS


Modest Upholders save consistently with family and at home more than any other segment, proving to be consistent, deliberate savers who look for multiple savings channels in spite of their lack of formal account access.Modest Upholders are the second most frequent savers in Pakistan after the much wealthier Communal Elite, whose savings frequency is only slightly higher. 41% of Modest Upholders save monthly or more, the highest monthly-or-better savings rate, compared with 31% nationally. Nationally, 50% of Pakistani’s never or almost never save,compared with 42% of Modest Upholders.

Their preferred savings channel is family and at home, with 32% saving in this manner, in line with the national average. However, those who do save with family and at home do so very frequently –23% save in this manner once a month or more (highest monthly and more savings rate) compared with 16% nationally. This is largely owing to their higher monthly savings compared to the national average.

While monthly savings with family and at home is higher than average, such savings measured quarterly-to-annually are slightly below-average. This suggests that Modest Upholders are likely habitual savers with family, especially monthly, perhaps doing so as part of monthly savings groups, and rarely ad hoc, opportunistic savers in familial channels.

5%8%

2%

11%9%

27%23%

3%

2%

2%

5%9%

1%

13%

1%

5%

11%

32%

1%3%

11%

32%

0%

0%

SAVINGS CHANNELS




124MODEST UPHOLDERS


Modest Upholders are the most likely segment to save once per month or more with informal groups, although the absolute number of quarterly saving with informal groups overall is low –11%, compared with 9% nationally.

Only 5% ever save in banks, the lowest level amongst segments, compared with 12% nationally. This is not surprising given that their formal account ownership is little more than half the national rate, and over 90% report zero bank savings due to not owning an account.

While the female-dominated Modest Upholders are amongst most frequent savers, male-dominated Careful Hustlers are the frequent savers. This might evidence differences in management household fund along traditional gender lines, with women often managing budgets, while men often set priorities.

NUMBER OF SAVINGS CHANNELS IN USE QUARTERLY

51%

63%

30%

25%

15%

10%

210

Modest Upholders

Pakistan average


MODEST UPHOLDERS 125

56%

6%11%

8%

17%

2%

54%

9%13%

8%13%

2% 0%0%


6 months

Once every 3

months

BORROWING FREQUENCY OVERALL

73%

76%

24%

21%

2

3%

1

2%

0



Modest Upholders are among Pakistan’s most frequent borrowers monthly, and tend to maintain multiple channels channels quarterly, favouring family especially, although are are likely often receiving direct support instead of loans from from family.

Modest Upholders are the second most frequent borrowers in Pakistan. 27% borrow at 27% borrow at least once every three months (the highest quarterly rate amongst amongst segments), yet 56% never borrow at all (second-highest rate). Relying to a Relying to a significant degree on personal resources in emergencies instead of social instead of social sources, they may borrow as a strategy to meet monthly household household expenses at the ends of months where the expenses might otherwise go otherwise go unpaid. The consistent character of this borrowing suggests that they that they plan and manage sufficiently well to repay on time, maintaining creditworthiness.

They also have the highest number of active debt channels, with 27% percent report percent report using one or more in the past 3 months compared to 23% nationally. nationally. They may be using different channels for different needs, tying rates and rates and periodicity of loans to the character of the expense.

98% never borrow from banks, the highest rate of non-borrowers amongst segments, amongst segments, and above the Pakistani average of 94%. Modest Upholders are less Upholders are less likely than average to own formal credit accounts, but slightly more but slightly more likely to own credit accounts with informal groups. 83% of Pakistanis 83% of Pakistanis and 90% of Modest Upholders report that they lack accounts to accounts to borrow from banks. Similarly, 83% lack accounts to borrow from from informal groups, compared to 85% nationally.


2%4% 3%

25%21%

2%4%

3% 4%

17%21%

2%

0% 0% 0% 0%0%

6%

0% 0%

7%7%

42% 42%

BORROWING CHANNELS




Amongst all Pakistanis, 99% never borrow via mobile money, with 95% reporting they lack the ability to do so. Amongst Modest Upholders, the figure is 100% and 97% respectively.

Modest Upholders primarily borrow from family, 25% borrow from a close family member at least once every three months (highest frequency amongst segments), but 59% never borrow from a close family member (second lowest). Only 5% of Pakistanis on average and 4% of Modest Upholders report that they do not have the ability to borrow from family, suggesting that family is by far the most commonly available source of loans in Pakistan.

Modest Upholders rarely borrow from informal financial groups and friends. 93% never borrow through these channels (in line with Pakistan average). Modest Upholders have among the highest trust in social financial networks, and tend to view their communities as highly unequal, yet are confident their communities will help them with things like businesses and their children’s school fees. It is possible that Modest Upholders are able to rely to an extent on the good will and support of their communities without needing to seek actual loans from them.

32%

30%

23%

28%

33%

32%

12%

11%



49% 40%

2% 1%

35%

3% 1%

Formal

institutions

Social

sources

Personal

sources

Informal

institutions

53%


RESILIENCE: ABILITY TO RAISE EMERGENCY FUNDS

Modest Upholders

Pakistan average


Social financial norms in Pakistan may not support borrowing behavior from informal groups and friends. 85% of Pakistani’s and 83% of Modest Upholders report that they do not have the ability to borrow from friends or informal groups. This reflects low rates of membership in informal financial groups across Pakistani segments.

Modest Upholders’ relatively strong ability to borrow through active and inactive debt channels, especially family, may account in part for their above average ability to raise emergency funds, particularly given their primary reliance on social sources to do so.

Modest Upholders are the most likely segment to perceive financial services as complex, with 80% agreeing, of whom 23% agree strongly. In comparison, 67% of Pakistanis overall perceive complexity. Modest Upholders may prefer family as a debt channel for its usability as well as its accessibility.

Gender dynamics may also in part explain their above average reliance on social sources for money in an emergency. Women make up the vast majority of this very large segment, and it may be that women are better placed, perhaps due to their role in household financial management and prevailing social norms, to tap family for loans than formal channels.

4%

11%

15%

6%

15%

57%

49%

23%

16%

3%

Strongly agreeAgreeNeutralDisagreeStrongly disagree

PERCEIVED COMPLEXITY OF FINANCIAL SERVICES




Modest Upholders identify as effective planners and in fact appear to be strong expense planners and deliberate savers despite having limited control over household financial decisions. Perhaps due to a division of household roles along gender lines, modest upholders are more likely than all but the communal elites to have a plan to manage their expenses. Most Modest Upholders (80%) agree or strongly agree that type of person who makes plans and follows through with with 67% of Pakistani women overall, together with Communal score the highest rate on this metric amongst segments.

49% report having a plan to manage their expenses, well average of 41%. In fact, together with Communal Elites, they are likely segment to have a plan to manage their expenses. 36% have one.

Their clear identification as strong planners and active expense comes despite the fact that only 28% report participating in financial decisions. While their opportunities to directly engage or house hold financial planning may be limited, they appear at the do be doing so for expenses. MODEST UPHOLDERS

5% 31%

31%

15%

24%

42%

36%

6%

5%4%

Strongly agreeNeutral AgreeDisagreeStrongly disagree

20%

38%

8%

9%

47%

30%

26%

23%

0%


0%

UnknownOther peopleSpouseMyself


128

17%

14%

32%

22%

25%

32%

16%

18%

11%

14%

79%

64%

9%

19%

12%

17%

45%

52%

19%

17%

36%

31%

17%

19%

8%

6%

75%

75%

129

Low Medium High

Personally Own

5 or more times per day1 -2 times per day 3 -4 times per dayNo phone access Rarely/ never

TECH USE FREQUENCY


PHONE USAGE


Common Property Don’t Own

Personally Own Common Property Don’t Own

MODEST UPHOLDERS


TechnologyModest Upholders are middling to low users of virtually all forms of technology and news or entertainment. They have below-average phone ownership, tend not to access the internet by other means, and use other legacy technology in at-most-moderate amounts.

Modest Upholders personally own phones less than average, but have access to a have access to a common property phone more often than average. Their rates of Their rates of phone access, while below average, are not very low, particularly in particularly in regards to smartphones. This is surprising given their significantly significantly lower rates of usage, suggesting that issues other than access are access are driving low usage, such as accessing or affording network credit.

Modest Upholders

Psychometrics

63%

41%

17%

20%

20%

40%

47%

27%

15%

13%

18%

21%

13%

19%

8%

20%


131

Medium HighLow

MODEST UPHOLDERS

LOCUS OF CONTROL

SELF-EFFICACY


PsychologySense of Self

Modest Upholders have a weak sense of agency but high self-esteem. They do not feel personally responsible for their struggles and feel limited ability to significantly change them. Nevertheless, they are hopeful about their future prospects.

63% of Modest Upholders have a clear external locus of control (highest control (highest level among all segments) and 62% have low sense of self-sense of self-efficacy (lowest of any segment). Given their low SES, it may SES, it may be psychologically beneficial to view external factors as having as having been determinant of their outcomes, including their low SES. SES. Even with their low level of self-efficacy (understood as low confidence in their ability to improve their situation through their efforts efforts alone), these attitudinal dispositions may safeguard their dignity dignity and ability to self-advocate, as reflected in their high self-esteem. esteem.

Interestingly, in Pakistan, we find that having an external locus of control of control correlates with increased rates of saving with family. Modest Modest Upholders have the strongest external locus of control and are and are amongst the most frequent savers with family, potentially taking taking some pride in their ability to galvanize those immediately around around them to work together to create resilience and pursue shared shared goals.

10%

20%

14%

20%

37%

26%

16%

16%

23%

17%

20%

40%

25%

21%

55%

39%

132

MediumLow High

Low HighestHighMediumLowest

MODEST UPHOLDERS

PsychologySense of Self

Modest upholders believe strongly in their own self-worth. They have the highest self-esteem of any segment, despite being the poorest, with 55% measuring at high or the highest levels. As noted, this may be tied to their strong external locus of controlModest Upholders take a significantly more positive view of the future than all other segments except the Communal Elite, who are similarly positive. Indeed, despite their challenging socio-economic circumstances and limited agency, Modest Upholders on the whole are active and effective financial managers, and their strong financial planning may be related to their future orientation.

SELF-ESTEEM

FUTURE ATTITIDE


11%

20%

26%

28%

11%

14%

34%

25%

18%

13%

39%

41%

13%

19%

47%

40%


133

Low Medium High

MODEST UPHOLDERS


Modest Upholders are conscientious and effective planners. They are future oriented and deliberate savers despite being impulsive. They likely save cash at home to manage household expenses. They consider themselves dependable and are the most comfortable segment holding debt, which may drive their frequent borrowing. They feel they don’t earn enough to save and that their savings are subject to the demands of the network, but they save frequently anyways, including with family. .

Nearly 2/3 of Modest Upholders are conscientious, with 47% scoring high scoring high on conscientiousness compared to 40% nationally. This is not This is not surprising given that most identify as strong and effective effective planners, and half are active expense planners.

They are also deliberate goal-oriented savers, with 63% scoring middle to middle to the highest level on deliberateness. In Pakistan, deliberateness in deliberateness in savings correlates with higher likelihood of saving with saving with both family and informal groups, qualities and behaviors we behaviors we see in Modest Upholders. People often save with family, family, friends, and through in informal groups because the specificspecific

CONSCIENTIOUSNESS



10%

10%

31%

32%

7%

16%

40%

34%

12%

9%

28%

40%

26%

24%

45%

36%

10%

22%

13%

18%

52%

44%

25%

16%

134

Lowest

0%

Middle

0%

Low HighestHigh

MODEST UPHOLDERS


savings mechanisms provided through these channels (e.g. money guards and ROSCAs) force discipline and commitment to savings targets through social norming, but offer flexibility in special circumstances. Continued membership in informal groups, in particular, requires that members demonstrate their dependability.

Most Modest Upholders are dependable, with 77% scoring middle to high on dependability. Their dependability may in part explain their ability to borrow frequently from family. Moreover, In Pakistan, dependability correlates with lower likelihood of allocating windfalls to pleasure spending. Being married, as 82% of Modest Upholders are, correlates with a higher likelihood of allocating a windfall to investments. Modest Upholders exhibit these qualities and financial priorities, which taken alongside the fact that 79% are women, may reflect their role as household managers, planners, and caregivers.

Modest Upholders are split on impulsivity, with 52% considering themselves highly impulsive, and 41% low. Their awareness of impulsivity may help them guard against it by implementing strategies and using financial tools that help them set and pursue financial goals in a more disciplined manner.

Modest Upholders are open minded—45% score high to the highest levels of openness. They are second only to the wealthier, male-dominated Communal Elite. Only 28% of Modest Upholders score low to lowest on openness, again

Low Medium High


OPENNESS

DEPENDABILITY

IMPULSIVITY



second lowest to Communal Elite and well below national averages. Moreover, openness correlates with more frequent borrowing from family, sharing a lower percentage of a windfall with family and friends, and a higher likelihood of being able to pay bills. Modest Upholders exhibit all of these behaviors at levels above the national average. Their openness is evident in their trusting nature.

80% of Modest Upholders feel that they do not earn enough enough to save, compared with 70% of Pakistanis. Moreover, 63% feel that if they saved money someone in their life would surely ask for it as a gift or loan, compared with 56% of Pakistanis overall, indicating that a majority do not believe that savings they make are safe from claims by their network.

They are the most comfortable segment with holding debt, with 67% reporting moderate to high comfort with borrowing, compared with 34% and 62% of Pakistanis overall. This suggests most most would not experience undue levels of anxiety upon taking out a loan.

MODEST UPHOLDERS

33%

25%

47%

45%

8%

13%

10%

12%

Medium

2%

4%

High Very highLowVery low

16%

13%

47%

43%

9%

17%

23%

22%

6%

6%

Very low Low Very highHighMedium

24%

28%

9%

15%

40%

39%

24%

16%

3%

High

2%

Lowest HighestMiddleLow

SAFETY OF SAVINGS

ATTITUDE TOWARDS SAVINGS SAFETY

COMFORT WITH DEBT


135

Disagree Strongly agreeStrongly disagree AgreeNeutral


10%

20%

14%

20%

17%

20%

41%

28%

18%

12%

136


HighestHighLowest MiddleLow

MODEST UPHOLDERS


7%

20%

14%

20%

22%

20%

11%

11%

46%

29%

PsychologyTrust

Overall, Modest Upholders are very trusting. They trust their community and social financial network most, including to provide financial support for emergencies and to pursue opportunities, but they also trust banks, media and government.Amongst Modest Upholders, 46% have the highest level of trust in people and 59% have high to highest trust in social financial networks. In both cases, these are by far the highest levels of any segment. In Pakistan, higher trust in social financial networks correlates with a greater ability to raise emergency funds.

Amongst Modest Upholders, 52% have low to the lowest perception of equality with their community (second lowest after careful hustlers). In Pakistan, people who view themselves a less equal than their community tend to have higher income volatility, much as Modest Upholders do.

Amongst Modest Upholders, 61% agree to strongly agree that their community would be willing to offer loans or support to invest in their businesses and children’s education – by far the highest level amongst all segments. This strong belief in the likelihood of receiving financial support from their community for non-emergency needs suggests that Modest Upholders cultivate robust social financial networks.

6%

5%

21%

27%

12%

23%

52%

39%

9%

5%

48%

38%

12%

24%

28%

28%

8%

5%

Highest

3%

High

4%

MediumLowLowest

BELIEF IN COMMUNITY SUPPORT FOR BUSINESS AND SCHOOL FEES

TRUST IN SOCIAL FINANCIAL NETWORK

TRUST IN PEOPLE

5%

7%

21%

25%

25%

33%

37%

27%

11%

9%

14%

15%

20%

23%

11%

16%

42%

35%

12%

10%

137

Low HighestHighMiddleLowest

HighestHighLow MiddleLowest

MODEST UPHOLDERS


PsychologyTrust

54% have high to the highest levels of trust in government, and 48% have high to the highest levels of trust in media – in each case the highest levels of any segment. Their trust in media is perhaps more likely to be aspirational than heavily experiential, given their generally low-to-moderate levels of media consumption. They may be particularly open to campaigns that leverage well-known public figures.

Given their heavy use of their phones and trust for those around them, they likely stay up to date through word of mouth rather than mass media consumption. Accordingly, they report more than any other segment high levels of confidence that they are among the first to learn of any news in the community.

Nevertheless, their high trust levels taper off when it comes to banks: 41% have high to the highest level of trust in banks, which is only at par with Pakistan averages, though the second highest amongst segments after the Careful Elite. Their trust in institutions may be driven by their above average respect for authority, whereas their low rates of formal access coupled with their strong belief that FSPs will discriminate on the basis of gender when considering loan applications (see Gender) likely serve to decrease trust in banks compared to other figures and institutions.

HighestLow HighLowest Middle

HighMediumLow

14%

22%

68%

58%

18%

20%

TRUST IN BANKS

TRUST IN MEDIA

TRUST IN GOVERNMENT

RESPECT FOR AUTHORITY FIGURES

12%

20%

13%

20%

13%

20%

31%

20%

31%

20%

138MODEST UPHOLDERS

Psychology Gender

Most modest Upholders believe that men are better financial managers than women. More women in the segment feel strongly that this is the case, though slightly more men in the segment hold this view overall. However, nearly all believe that wives and husbands should know each others financial affairs and that girls and boys should be educated about money in the same way, and women in the segment feel more strongly so than men.Three quarters of Modest Upholders (75%) believe that men are better financial managers than women, compared to 62% of Pakistanis overall. Amongst Modest Upholders, 24% of women strongly agree and 49% agree, compared to 10% of men in strong agreement and 72% in agreement.

However, Modest Upholders are overwhelmingly believe that wives and husbands ought not know each other’s financial affairs – 93% versus 81% nationally. Women in this segment feel even more strongly, with 39% in strong agreement and 55% in agreement, compared to 17% and 73% of men in the segment, respectively.

Moreover, 92% of Modest Upholders believe that girls and boys should receive the same education about money, compared to 79% of Pakistanis

WIVES AND HUSBANDS SHOULD KNOW EACH OTHER’S FINANCIAL AFFAIRS


GIRLS AND BOYS SHOULD BE EDUCATED ABOUT MONEY IN THE SAME WAY

5%

6%

12%

13%

8%

20% 46%

21%

16%

Strongly agreeAgree

Strongly

disagree NeutralDisagree

1%

4% 6% 9% 55%

34%

26%

Agree Strongly agreeNeutralDisagree

Strongly

disagree

3%3% 58%

54%

2%

4% 8% 9% 55%

32%

24%

Strongly agreeNeutral AgreeDisagree

Strongly

disagree

3%2% 61%

Modest Upholders

Pakistan average

139MODEST UPHOLDERS

Psychology Gender

overall. Amongst Modest Upholders, 37% of women strongly agree and 55% agree, compared to 11% of men in strong agreement and 81% in agreement.

70% believe that when applying for a loan, the gender of the applicant has no influence on whether the loan is granted, compared to 55% of Pakistanis overall. This may reflect their low levels of experience with formal loans.

Modest Upholders are more likely than average to believe that understand new technologies better than do men, with 64% in compared to 48% of Pakistanis overall. WHEN APPLYING FOR A LOAN, THE GENDER OF THE APPLICANT DOES NOT

INFLUENCE WHETHER THE LOAN IS GRANTED


6%

18%

21%

15%

25% 36%

18%

12%

Neutral

3%

Strongly agreeAgreeDisagreeStrongly disagree

46%

5%

11%

17%

15%

23% 42%

19%

13%

NeutralDisagree

3%

Strongly agreeAgreeStrongly disagree

51%


MODEST UPHOLDERS

How might we leverage frequent savers and borrowers amongst women and develop products and

campaigns that enable them to act as agents for women targeted financial

products?+

How might we create products and services that equip women to teach their children, especially

daughters, to be effective financial managers?

OPPORTUNITIES

140

Create products and services that:● Design products to improve financial literacy and

support investments in education ● Create inclusive experiences (or exclusive experiences

for women only) that overcome negative perceptions of financial institutions

● Design products that support people to achieve highly valued cultural milestones

● Leverage strong planning behaviour, future orientation, and dependability, especially for goal based savings, credit and insurance products

● Focus products on building existing routines - such as goal-setting, saving, and planning - rather than introducing novel behaviors; this will validate her sense of financial ability and self-confidence.

Engage through:● Trusted women within their family and immediate

friend group (possibly through mosque)● Door to door sales and marketing agents, removing

the need for women to leave the home to learn about services and engage providers.

● Appeals to their role as effective family managers and financial planners


141MODEST UPHOLDERS

Communal ElitesPAGE 143

OverviewPAGE 145

AnalysisPAGE 175

Opportunities

Communal Elites21% OF POPULATION

The wealthiest segment and best educated, with the highest resilience and use of financial tools, Communal Elites manage their income and expenses more effectively than most, and are frequent goal based savers, but relatively infrequent borrowers. They trust people and, despite being the most frequent users of formal channels, are more likely to borrow or save with family. Most are conscientious and effective financial planners.

Typically well-educated, wealthy, male and slightly older, Communal Elites are the most active users of formal and informal financial services – though like all the segments they more frequently use family channels.They effectively manage their mostly stable incomes and have the least trouble amongst segments paying expenses. They are Pakistan's most frequent and goal-oriented savers across all channels, suggesting many may have diverse savings strategy. However, they are the second least frequent borrowers with the second lowest number of active debt channels. Communal Elites are the most confident segment in their ability to raise emergency funding; yet, more than a third believe they would struggle to raise cash in the short term, potentially indicating a need for formal insurance or savings products. Communal elite are the most likely segment to own smartphones; however, they use mobile money no more than average.Communal Elites are conscientious and most identify as effective planners. They have high levels of trust in both their community and in banks and may be particularly open to bank products that integrate social elements while protecting savings.

COMMUNAL ELITES 143

Context+ 55% in SES quintiles 4-5+ 50% are age 25-45, and 34% age 45++ 80% are married+ 61% rural+ 41% have secondary education, 9% have tertiary+ 58% make or participate in household financial

decisions+ 45% own land

Behavior+ 46% medium to high income volatility+ 55% confident in ability to pay their bills on time+ 33% save monthly or more (primarily with family)+ 21% borrow quarterly or more (primarily from family)+ 38% personally own livestock+ 57% have relied on social sources of money in

emergencies+ 46% have a plan to manage their expenses+ 40% talk on phone with two or more people daily+ 25% use internet, 23% social media once per month +

w/o assistance+ 28% own formal financial accounts+ 19% members of informal groups

Psychometrics+ Weak sense of agency, but optimistic and high self-

esteem + Identify strong planners, moderate to high

conscientiousness+ High impulsivity, moderate to high deliberateness in their

savings+ Moderate comfort with debt, high dependability in general+ low belief savings safe from social claims+ high trust in people and social financial networks+ Moderate to high trust in banks, view financial services

are complex+ Believe men better financial managers than women, but

boys and girls should be educated about money in the same way

+ Believe husbands and wives should know each other’s finances

AspirationsAspire save with banks towards long term goals and make investments to grow their income, while continuing to use and invest in their social financial network.

COMMUNAL ELITES 144

w

Communal Elites

Context

COMMUNAL ELITES 146

10%

15%

20%

23%

20% 20% 20% 20% 20%


32%

Communal Elites Pakistan average

CONCENTRATED IN HIGH SOCIO-ECONOMIC CLASSES (SEC)SocioeconomicCommunal Elites are wealthy, stable, frequently landowning and mostly men, many of whom are young and well-educated. They are more frequently collaborative household decision-makers than any other segment.Communal Elites are mostly married (80%) men (64%) living in rural areas (61%). However, they are more likely to be single than any other segment (15%).

55% are in the top two SES quintiles – a higher percentage than any other segment. While their distribution towards higher SES is possibly related to their strong education, it may likewise relate to their ages.

Compared to other segments, fewer Communal Elites report being sole decision-makers in their households relative to the proportion of men. Although women in this segment have only an average likelihood to identify as sole decision-makers, men in this segment are more likely than any other segment to report that they make decisions in concert with others in the household (12%), potentially owing to the youth and greater number of singles in the segment.


46%

38%

12%

9%

22%

30%

20%

23%

Other people Unknown

0%

Spouse

0%

Myself with someone elseMyself

15%

13%

27%

30%

23%

30%

25%

17%

7%

7%

COMMUNAL ELITES 147


AGE

EDUCATION

35 –

44 years

2%

45 –

54 years

Over 65

years

55 –

64 years

25 –

34 years

18 –

24 years

2%

31%

38%

16%

22%

41%

31%

9%

6%3%

No schooling Secondary

Informal

schooling TertiaryPrimary

3%

SocioeconomicCommunal Elites are also the best-educated segment in Pakistan, having the largest share nationally with both tertiary and secondary education (50%) – Although Independent Traditionalists are the most likely segment to have education overall.

Communal Elites skew slightly older than average for Pakistan, with a smaller portion of the segment middle aged than the national average. However, a significant number are young, 42% of this segment is below the age of 35, with 15% between 18-24 years old.

With a higher proportion of 18-24 year-olds than other segments, they are well-positioned to seize new, promising financial and economic opportunities, especially given their high education levels. With more 45-54 year-olds than other segments, they have likely had opportunities to build stable income bases and grow their asset bases and wealth, while not yet significantly diminishing economic activity in old age.




Communal Elites

Pakistan average

COMMUNAL ELITES

14%

25%

45%

40%

29%

24%

7%

7%

4%

4%

1 person 4 or more peopleNo-one 3 people2 people

10%

15%

7%

13%

29%

27%

14%

13%

40%

31%

2 people 4 or more people0 or 1 person 3 peopleNo phone access

32%

3% 1%

53%

35%

3% 1%

Formal

institutions

Social

sources

Personal

sources

Informal

institutions

57%

Social NetworkCommunal Elites are very social, potentially serving as hubs in their community, although only slightly more likely to lean on that community when they need help in an emergency, although well-supported by them.Communal Elites speak to more people on the phone daily than average compared to other segments, implying a larger than average social network. They are the least likely segment to speak on the phone to only one or no people in a day, and 40% speak to four or more people daily – the highest of any segment.

While they are the least likely to have no one at all to rely on when ill, almost half cite only one person on whom they can call. This suggests that though their active social networks are large, they may consist not just of close family, but perhaps constitute a network around their economic activity as well.

Moreover, although they can call on fewer to support them than might be expected with their large social networks, as the wealthiest segment, they might also feel more able to afford professional care in illness, and may tend in general to be in better health than average, aligning with their high SES. As such, they may find less reason to reaching out to their network for financial support when ill.

They are slightly more likely than average to cite social sources as important to their resilience, and slightly less likely than average to say the same for personal sources, which they draw on a little more than half as often. Their large social networks, and confidence in being able to rely on a portion of that network in illness, suggests that those around them are likely to be as wealthy as they are, perhaps further

148

Communal Elites

Behavior

COMMUNAL ELITES 150


Communal Elites demonstrate the strongest financial behavior of any segment, and are particularly effective at shaping their income and expenses. While they lag slightly behind other measures in cultivating receivables, they nevertheless tie with Modest Upholders for the strongest scores.

SHAPING INCOME & EXPENSESCommunal Elites effectively manage their mostly stable incomes and have the least trouble amongst segments paying expenses. That being said, they still report over 4 unpaid expenses per month and sometimes face financial emergencies over the course of the year, though are mostly confident in their ability to pay their bills on time.

BUILDING RESERVESCommunal Elites are Pakistan's most frequent savers across all channels measured, suggesting many may have a diverse savings strategy at play. That being the said, like all other segments they by far save most frequently with family and in the home, though significant numbers actively use banks and informal groups as well.



COMMUNAL ELITES 151


CULTIVATING RECEIVABLESCommunal Elites are Pakistan’s second least frequent borrowers and maintain the second lowest number of active debt channels of any segment. Family is by far their preferred borrowing channel. Though they have the highest bank borrowing rates, they are the most likely segment to own an account and never use it. Communal Elites experience fewer emergencies than average and are significantly more confident in their ability to raise large sums in the emergencies that they do face

PRIORITIZATIONRelative to other Pakistanis, Communal Elites prioritize saving in a bank and sharing sharing a windfall with friends and family, deprioritizing investing and keeping addition money at home in cash (though they would do so at higher rates than sharing). This suggests that compared to the average Pakistani, they can afford to and would prefer to put more money to work against long term goals and supporting investing in their network.

PLANNINGCommunal Elites are conscientious and most identify as effective planners. They typically have a plan to manage their expenses, and are the most frequent goal based savers in Pakistan with the fewest unpaid expenses.



23%

20%

26%

15%

7%

6%

3%

26%

19%

12%

7%

6%

2%

28%

Paying a debt



Future expense

Saving in a bank

Investing

Keeping as cash


COMMUNAL ELITES


Relative to other Pakistanis, Communal Elites prioritize saving in a bank and sharing sharing a windfall with friends and family, deprioritizing investing and keeping addition money at home in cash (though they would do so at higher rates than sharing). This suggests that compared to the average Pakistani, they can afford to and would prefer to put more money to work against long term goals and supporting investing in their network. On average, Communal Elites would allocate 26% of the total amount of a windfall to a bank savings account, compared to 19% on average nationally. Given their lowest income volatility and highest SES amongst segments, it makes sense that they would put extra money into bank savings (typically done so against long term goals). They also have significantly above-average account ownership and the highest trust in banks, increased access and high trust may also help explain this allocation. Additionally, Communal Elites are less likely than average to believe that their communities will support their endeavors, and are less likely to believe their savings are safe from the demands of those around them.

Communal Elites

Pakistan average

152

23%

20%

26%

15%

7%

6%

3%

26%

19%

12%

7%

6%

2%

28%

Paying a debt



Future expense

Saving in a bank

Investing

Keeping as cash


COMMUNAL ELITES


They would share share 15% of it with friends and family, compared with 12% on average for Pakistanis. This sharing, in addition their allocation to bank savings, indicates that they see value in both protecting their money and sharing it more broadly with their network, possible through informal savings and loans groups and contributions to their social safety net.

Communal elites would invest nearly a quarter of windfall funds. Although slightly below the average, Communal Elites’ high openness but lower locus of control seem to support their intention to invest a significant portion of a windfall, yet in a moderated amount compared to more secure savings.

Communal Elites

Pakistan average

153

154

18%15%

5%

28%

19%

6%

FINANCIAL ACCESS

Formal finance Informal finance

Less likely to have informal finance accounts such as chit funds, SHGs, etc.

Mobile wallets

COMMUNAL ELITES


Communal Elites’ are the most formally and informally included segment in Pakistan, with the highest rates of usage across both categories, as well as the highest transaction rates with family. Their elevated rates of membership and use of informal channels suggests they continue to get value out of informal groups and demand these unique features, witch if integrated into formal services, could increase adoption and usage28% of Communal Elites own accounts with formal financial institutions, the highest level of formal account ownership amongst segments. Just 6% own mobile wallets, though this is above the Pakistani average of 5%. However, 63% of the segment finds financial services complex and confusing, which is likely suppressing account ownership, usage or both. 15% of account holders save three months or more, while 11% have used their account to borrow at least once in the past. These rates suggests there is plenty of room for providers to drive greater usage.

Although they are the most likely segment to be formally included, they are also the most likely to be members of informal groups, with 19% reporting membership in informal groups. 13% have used these groups to save at least once in the last three months, and 10% have used them to borrow at least once in the past. These numbers do not account for their saving and borrowing with family or at home, where their highest rates in Pakistan (30% have saved in the last three months and 43% having borrowed at least

COMPLEXITY OF FINANCIAL SERVICES

4%

16%

15%

18%

15%

52%

49%

12%

16%

Strongly agreeDisagree AgreeNeutralStrongly disagree

2%

Communal Elites

Pakistan average

Strongly agreeAgreeStrongly disagree NeutralDisagree

NUMBER OF UNPAID EXPENSES (MONTHLY)


4.05

4.51

54% 19% 27%

34% 21% 46%

MiddleLow High

COMMUNAL ELITES


Communal Elites effectively manage their mostly stable incomes and have the least trouble amongst segments paying expenses. That being said, they still report over 4 unpaid expenses per month and sometimes face financial emergencies over the course of the year, though are mostly confident in their ability to pay their bills on time.Communal Elites’ incomes are the most predictable of any segment – 54% report low quarterly income volatility compared to 34% nationally. However, when taken on a daily basis, their incomes are only slightly more predictable than average,.

They report the fewest number of unpaid expenses amongst segments, with 4 unpaid per month compared with an average of 4.7 for Pakistani women overall. They also face the fewest emergencies, at 0.9 per year compared to .1 for the average Pakistani

They also report the highest confidence in their ability to pay their household bills on time, with 55% feeling that they are typically able to do so compared to 45% of Pakistanis overall, and only 19% feeling they are unable, compared to 33% nationally.

CONFIDENCE IN ABILITY TO PAY HOUSEHOLD EXPENSES

NUMBER OF EMERGENCIES FACED (YEARLY)

5%

17%

28%

26%

21%

49%

40%

5%

5%

2%

0.82

0.99

155

51%

63%

30%

25%

15%

10%

NUMBER OF SAVINGS CHANNELS IN USE QUARTERLY

SAVINGS FREQUENCY

156

15%

27%

11%14%

25%

4% 4%

21%

8%10%

23%

4% 4%


6 months

Once every 3

months

29%

1 20

COMMUNAL ELITES


Communal Elites are Pakistan's most frequent savers across all channels measured, suggesting many may have a diverse savings strategy at play. That being the said, like all other segments they by far save most frequently with family and in the home, though significant numbers actively use banks and informal groups as well.Communal Elites are Pakistan's most frequent savers slightly ahead of the women-dominated Modest Upholders who actually save more frequently in the monthly, weekly and daily ranges. 33% save monthly or more, compared to 40% of Modest Upholders. This lower rate of frequency among Communal Elites may highlight where they are less often the sole, direct money managers in their household’s day-to-day affairs, or saving out of day-to-day transactions.

They also maintain the most active savings channels of any segment in Pakistan, with 19% using 2 or more channels quarterly, compared to 12% nationally.

It’s likely that Communal Elites present the fewest obstacles for acquisition and retention for FSPs. With investment ranking as their next-highest priority behind bank-savings, this segment seems to present behavior fit for credit-scoring and for cross-selling that builds on their multi-channel preferences.

Communal Elites

Pakistan average

SAVINGS CHANNELS

15%

8%13%

9%

30%

23%

5%

3%

2%

3%

2%

13%

9%

1%4%

20%

32%

11%

3%

16%

11%

43%

2% 2%




COMMUNAL ELITES


Communal Elites are more likely to save with family and at home than any other channel, 30% do so quarterly or more compared with 23% of Pakistanis overall. In fact, they are the most frequent savers with family and at home. The fact that Communal Elites frequently own and use multiple channels for saving suggests that the value proposition of saving with family or at home is still sufficiently compelling and in competition with that of FSPs.

They are the most frequent savers through informal groups and friends, with 13% doing so quarterly or more compared with 9% of Pakistanis on average.

Communal Elites are also the most frequent bank savers, with 15% doing so every three months or more compared with 8% of Pakistanis overall.

They have the highest rates of land access (through personally or commonly owned land) amongst Pakistanis. 25% report personally owning land compared with 25% of Pakistanis overall, and another 20% report commonly owning land compared with 16% overall.

While 45% of Communal Elites own land, 53% inherited it compared with 48% nationally. Perhaps this segment’s wealth has been accumulated generationally. They have average average rates of livestock ownership, with 38% personally or together with their household owning livestock.

157

Communal Elites

Pakistan average

158COMMUNAL ELITES

BORROWING FREQUENCYFinancesCultivating Receivables

Communal Elites are Pakistan’s second least frequent borrowers and maintain the second lowest number of active debt channels of any segment. Family is by far their preferred borrowing channel. Though they have the highest bank borrowing rates, they are the most likely segment to own an account and never use it. Communal Elites experience fewer emergencies than average and are significantly more confident in their ability to raise large sums in the emergencies that they do faceCommunal Elites are Pakistan’s second least frequent borrowers, 21% borrow at least quarterly or more per year or more, compared with 24% of Pakistanis nationally. Both Modest Upholders and Careful Hustlers borrow more, though not by too much. 51% report never borrowing, compared with 54% of Pakistanis overall.

They maintain the second lowest number of active debt channels of any segment, with 21% maintaining one or more compared to 24% of Pakistanis overall. In general, Pakistanis are unlikely to use multiple debt channels – on average, only 2% use more than one channel at least quarterly, in strong contrast to their multi-channel saving.


73%

76%

24%

21%

2

3%

1

2%

0


0.82

0.99

51%

12% 16%9% 11%

1%

54%

9%13%

8%13%

2% 0%0%


6 months

Once every 3

months

Communal Elites

Pakistan average

159COMMUNAL ELITES


Communal Elites are the second most likely segment to have no active borrowing channels on a quarterly basis, suggesting they do not use credit as a tool to meet typical, short-cycle household needs. It is possible they are likely to use credit more often for large financial events, such as a wedding, the purchase of a home, or other more capital-intensive undertakings.

Family is by far their preferred borrowing channel, like all other Pakistani segments. They are the second least frequent borrowers through family, only Pragmatic Providers borrow less, yet still nearly 43% have done so in the past, and 1% have done so in the past 3 months, compared to 21% of. Pakistanis overall. Despite high rates of account ownership, most rarely borrow from banks, suggesting family providers a better option that is likely both cheaper and more flexible. Their sizable social networks may motivate their continued use of social financial channels

Communal Elites are the most likely to own formal channels for borrowing, yet they are also the most likely to never use a formal channel they own for borrowing. This suggests a missed opportunity for formal providers.

Only 10% of Communal Elite report ever having borrowed from an informal group, though this is above average for Pakistan, it means roughly half of those who are members of informal groups do not use them for borrowing. Only 2% have done so in the last 3 months.

SOURCES OF BORROWING



2% 2% 3% 3%

17%21%

9%

4%

8%4%

26%21%

1%

42%

0%0%

7%

0%

11%

6%

1% 1%

10%

43%

Bank FamilyMobile money Groups and friends

Communal Elites

Pakistan average

160COMMUNAL ELITES


Only 11% report ever having borrowed from a bank, which while nearly twice the national average means that most of the 28% of formal account holders have never borrowed from a bank. Only 2% report having done so in the last three months

Communal Elites experience fewer emergencies than average and are significantly more confident in their ability to raise large sums in the emergencies that they do face, with 54% believing it would be somewhat or very possible to raise funds in such circumstance. With below-average numbers of emergencies, Communal Elites are less likely to be forced into debt by circumstances than to use credit for positive economic or social opportunities.

18%

30%

27%

28%

42%

32%

12%

11%


ABILITY TO RAISE EMERGENCY FUNDS



Communal Elites are conscientious and most identify as effective planners. They typically have a plan to manage their expenses, and are the most frequent goal based savers in Pakistan with the fewest unpaid expenses.Most Communal Elites (80%) agree or strongly agree that they person who makes plans and follows through with them, of Pakistanis overall. Together with Modest Upholders, they are the likely segment to identify as reliable planners.

Moreover, 46% report having a plan to manage their expenses, 41% of Pakistanis on average. In fact, together with Conservative Individualists, they are the most likely segment to do so, though the dominated Modest Upholders segment is nearly in line. They are likely segment to report having no plan at all, due largely to having 32% reporting as “neutral.” This may relate to their relatively stable incomes and high SES, which may reduce the need or effort involved with expense planning.

Most Communal Elites report that they either make household decisions alone (46%) or together with someone else (12%), both national average, indicating that over half the segment has ample to directly engage or drive house hold financial planning. It is also that the higher incidence of joint decision-making contributes to this segment’s success in planning.


COMMUNAL ELITES


20%

31%

32%

24%

41%

36%

5%

5%4%

2%

Neutral Strongly agreeAgreeDisagreeStrongly disagree

46%

38%

12%

9%

22%

30%

20%

23%

Other people Unknown

0%

Spouse

0%

Myself with someone elseMyself


161

37%

64%

33%

19%

31%

17%

9%

14%

11%

22%

39%

32%

21%

18%

20%

14%

Low Medium High

5 or more times per dayRarely/ never 1 -2 times per dayNo phone access 3 -4 times per day

TECH USE FREQUENCY

PHONE USAGE

COMMUNAL ELITES 162


Technology UseCommunal Elites are the most likely segment to own a smartphone, and they are frequent users of digital technology. They are 140% more likely to be medium to frequent users of technology than the next closest segment, and 64% score high–highest overall in technology use.Communal Elites are the most likely to have access to a phone (only 9% report no phone access) and are the most likely to use phones overall. Whereas 10% report using a phone “less than once per day,” there no Communal Elites who report “never” using a phone.

Communal Elites are the only segment to have 0% respondents who claim to never use a cell phone at all. This suggests that even those reporting no access to phones believe that they could get access if needed, perhaps through someone in their household. This suggests a potential in this segment for DFS providers to reach and offer services to those using other people’s phones or lending their phones out.

COMMUNAL ELITES 163

Technology UseCommunal Elites lead all segments in regular use of social media, 20% doing so at least a few times per week to daily. For DFS providers, outreach through social media channels may be affective. Additionally, this segment could be influential in expanding the user bases of digital products and services by incentivizing referral to those in their networks.

Although they have among the highest feature phone ownership among Pakistanis (almost three-quarters own or have access), Communal Elites are also the most likely segment to own or have access to smartphones, with 26% owning one personally. This seems to align with having enough wealth to easily own a phone, enough education to be confident users, and ownership split between feature phones and smartphones in proportions that parallel their age ranges (frequently 18-24, and even more frequently 45-54).

52%

52%

20%

17%

28%

31%

26%

19%

8%

6%

65%

75%

Personally own Don’t ownCommon Property

Personally own Don’t ownCommon Property




Communal Elites

Psychometrics

41%

41%

27%

20%

32%

40%

165COMMUNAL ELITES


Communal Elites have a relatively weak sense of agency, despite their relative high standing in society. However, they satisfied with their lives, optimistic about the future, and have high self-esteem.

Nearly half of Communal Elites have an external locus of control (2nd lowest sense of control after Modest Upholders), while about a third have a clear internal locus of control. Despite their relative financial health, high levels of education, and strong networks, almost half of Communal Elites feel that their circumstance and outcomes are beyond their control. This may be due to their slightly higher rates of shared household decision making and recognition of the financial and economic interdependence they share with their network.

Likewise, Communal Elites have the second lowest sense of self-efficacy. 40% measure low, in line with national averages, and only 32% measure high, below the national average of 39%. This comes again despite their relatively better outcomes. With 59% at least moderate to highly self-efficacious, they still appear comfortable with the prospect of learning new skills and managing strategies in general, but perhaps less eager to do so alone. Perhaps their higher technology usage may here have made them more aware of the range of modern skills and competencies they do not possess, and how reliant they are on increasingly-institutional structures, like banks, to thrive in more formally-included communities.

Medium HighLow

25%

27%

15%

13%

27%

21%

19%

19%

14%

20%

Lowest High HighestMiddleLow

LOCUS OF CONTROL

SELF-EFFICACY


26%

40%

23%

21%

51%

39%

166COMMUNAL ELITES


Communal Elites are markedly more positive towards the future – the most positive of any segment and well above the national average. They are roughly twice as likely to report high future aspirations (30% versus 16% nationally), and slightly above average to report the very highest (20% versus 17% nationally). This further underlines their likelihood to be strong planners and frequently saving for a purpose. Combined with their high trust, self-esteem and openness, Communal Elites are perhaps likely to view those people and institutions around them as likely to believe in them, and offers of partnership or support to be genuine and worthwhile.

Communal Elites are the most likely segment to express satisfaction with how their lives have improved over the past 5 years (66% high-highest satisfaction), and have the most positive views nationally of their future prospects (50% high-highest). When their relatively low income volatility and higher SES are both viewed alongside their satisfaction with how their lives have improved in the last five years as well as their confidence in their future prospects, their high openness and self-esteem appear well-supported by events. They perhaps present to FSPs a ready audience for opportunities that emphasize stable paths for long-term growth through mixed portfolios of products and services.

MediumLow High

10%

20%

16%

20%

24%

26%

30%

16%

20%

17%

HighestHighMediumLowLowest

CONFIDENCE IN THE FUTURE

SELF-ESTEEM


33%

41%

25%

19%

41%

40%

167COMMUNAL ELITES


Communal Elites are openminded and conscientious planners. They are impulsive in general, but are deliberate and frequent savers despite feeling they don’t earn enough to save and that their money is vulnerable to claims by friend and family. Just over half are uncomfortable holding debt. Communal Elites are more conscientious than Pakistanis on average, with 66% measuring medium to high compared to 59% nationally. Given the fact they are also deliberate savers, it appears Communal Elites are fairly purposeful in their financial management. Most also identify as planners and consider themselves dependable, suggesting they may be likely to follow through on their intentions, all else equal. This is particularly clear in their capable management of multiple financial channels for saving.

Despite being conscientious planners, Communal Elite are impulsive, 47% measure high to the highest levels on impulsivity, compared with 43% nationally, while another 17% score medium, compared to 16% overall. Given their relative wealth, they may be able to afford to be more impulsive than the average Pakistani.

Communal Elites show the most openness to new experiences of any segment in Pakistan (52% high), followed closely by Modest Upholders (45% high). This aligns with their use of multiple channels and types, from formal to informal, as well as their frequent technology use and increased incidence of shared decision-making. Providers can leverage their openness and impulsivity to provide opportunities for

5%

10%

31%

32%

17%

16%

39%

34%

8%

9%


23%

40%

25%

24%

52%

36%

Low Medium High

Low Medium High

IMPULSIVITY

OPENNESS

CONSCIENTIOUSNESS


9%

20%

32%

28%

17%

14%

30%

25%

13%

13%

DEPENDABILITY

COMFORT WITH DEBT


168COMMUNAL ELITES


Despite their relatively high impulsivity, Communal Elite are more deliberate in their savings strategy than the average Pakistani. 43% of Communal Elites are deliberate, goal based savers, compared to 38% nationally, while 41% are not, compared to 48% nationally below average deliberateness. Only Modest Upholders are more deliberate in their savings.

We have found that Pakistanis who use multiple savings channels simultaneously often do so with specific purposes or goals in mind. Those who save in banks often do so with a more fungible purpose in mind, for example emergency money or savings for a long-term and more contingent goal, rather than a more immediate and concrete one.

Communal Elistes measure as the second most dependable segment after Modest Upholders. 72% measure middle to highest levels of dependability, compared with 60% of Pakistanis overall.

Jut over half are comfortable with debt, only 14% reporting high to the highest levels, while another 44% report medium levels, compared with 16% and 39% of nationally, respectively. 43% report low to very low levels of comfort with debt, in line with the national average. This and their relatively lower need for credit may help explain why they borrow relatively infrequently, despite having formal financial access, broad and trusting social financial networks, and measuring relatively conscientious and dependable.

Low HighestLowest Moderate High

11%

22%

17%

18%

57%

44%

15%

16%

Low Middle

0%

0%

HighestHighLowest

26%

28%

17%

15%

44%

39%

12%

16%

HighMiddleLow

2%

HighestLowest

2%


13%

13%

52%

43%

16%

17%

17%

22% 6%

169COMMUNAL ELITES

SAFETY OF SAVINGS

ATTITUDE TOWARDS SAVINGS


Despite being the segment with the highest savings rate and SES score, Careful Elites feel strongly than any segment that they do not earn enough to save. 70% that they don’t earn enough to save, while only 16% feel they do (both in line with the national average for Pakistan)

Communal Elites have the lowest overall confidence in their ability to protect their savings from the demands of those around them. 65% feel that if they saved money someone in their life would surely ask for it as a gift or loan, compared with 56% of Pakistanis in general. This may be driven in part the fact they have the highest exposure to such claims due to their very frequent saving with family and groups. Yet they continue to save through these channels at higher rates than the do with banks, which they underutilize for savings given their account ownership rates, suggesting they see compelling value nevertheless.

Low Very highHighVery low Medium

2%

20%

25%

50%

45%

12%

13%

15%

12%

High Very highVery low

4%

MediumLow

2%


10%

20%

19%

20%

27%

20%

35%

28%

10%

12%

170COMMUNAL ELITES

Psychology Trust

Communal Elites have high trust in their communities and their social financial networks. They also trust media and government but at slightly lower levels. Their trust helps explain their highest rates of formal account usage and deep but nuanced financial integration with their networksCommunal Elites are the second most trusting segment after Modest Upholders in both people in their communities and in their social financial networks. 45% of Communal Elites trust social financial networks, compared to 40% nationally, and even more trust the people around them (51% versus 40% nationally).They are the least-likely segment to distrust people in their social financial network (23% distrust such people).

The benefits they accrue (social capital, status, satisfaction) by saving and transacting with their trusted family and community seem to outweigh the costs. While their trust in their social financial networks is above average, their lack of confidence in the safety of their savings as well as their belief that they do not have enough money to save is noteworthy. It is possible that they are respected in their communities and viewed as a resource, involved in the financial lives of those around them, potentially bringing economic benefits through their savings and borrowing, while also making it difficult to expand the share of their financial activity to formal channels without divesting from

8%

20%

15%

20%

26%

20%

19%

11%

32%

29%


HighestMiddle HighLowLowest


TRUST IN PEOPLE


171COMMUNAL ELITES

Psychology Trust

Communal Elites believe more strongly than any segment except for Pragmatic Providers that their communities are equal, with 72% reporting moderate to high equality versus 58% nationally.

However, they have below average belief that their social financial network would support their business and education investments. 36% believe such support is unlikely, compared to 32% nationally, while 39% believe it is likely (compared to 45% nationally).

Yet, they report having relied more heavily than the average Pakistani on social sources of financial support in times of emergencies over the past two years, and they are amongst the most confident in their ability to raise such money in an emergency,

Communal Elites may feel unwilling or unable to tap their network for financial support for anything other than emergency situations. They may be seen by their communities as better off and expected to be net contributors to the social safety net.

Communal Elites may rely on their status and connectedness to others to make and manage their strategies, placing significant trust in others along the way. This may make them difficult to convert alone, but easier to reach through the ‘money managers’, early adopters and collaborative partners in their households, families and communities, even bringing along others with them when their own loyalty is won.

25%

38%

33%

24%

34%

28%

5%

5%

HighLowest Low

4%

HighestMedium

4%

5%

33%

27%

25%

23%

36%

39% 5%

3%

Strongly agree

3%

AgreeNeutralDisagreeStrongly disagree

BELIEF IN COMMUNITY SUPPORT FOR BUSINESS AND SCHOOL FEES



12%

20%

13%

20%

13%

20%

31%

20%

31%

20%

11%

15%

24%

23%

14%

16%

41%

35%

10%

10%

HighestLowest MiddleLow High

HighestLowest HighMiddleLow

COMMUNAL ELITES 172

TRUST IN BANKS


TRUST IN GOVERNMENT

PsychologyTrust

Communal Elites report the highest trust in banks (62%) and government (51%) of any segment (Pakistanis average 40% and 45% respectively). Interestingly, their high trust comes despite the fact that 63% of the segment finds financial services complex and confusing.

Their relatively high bank savings rate and interest in increasing bank savings further (given a windfall) aligns with their high trust in banks. Moreover, it suggests that their appetite for increased activity in formal channels has yet to be fully realized and can likely be built atop current savings offerings. Given their high technology use, FSP might do well to explore including explicitly social aspects of future service offerings, both in functionality as well as in messaging.

They have the second highest trust in media and government after Modest Upholders. 32% have high trust in media compared with 35% overall, and only. 51% have high trust in government compared to 41% nationally,

--

TRUST IN MEDIA

6%

7%

27%

25%

35%

33%

26%

27%

6%

9%

HighestLowest HighMiddleLow

173COMMUNAL ELITES

Gender RolesCommunal Elites feel that men are better financial managers than women, but that wives and husbands should know each other’s finances, and girls and boys should be educated about money in the same way, suggesting they may believe girls and boys should be brought closer to parity in their financial skills. Over half of Communal Elites feel that men are better financial mangers than women, with 62% agreeing with statement (in line with the average for Pakistanis). Fewer (15%) outright disagree with this notion than Pakistanis on average (19%) in any other segment. However, men in the segment hold more progressive gender views in regards to this question, with 68% in agreement compared to 54% of women, though only 14% of men outright disagree with the statement compared to 16% of women.

Most Communal Elites believe wives and husbands should know each other’s finances, with 88% in agreement and only 6% outright disagreeing, compared to 80% and 4% nationally, respectively. However, women in the segment hold more progressive gender views in regards to this question, with 94% in agreement compared to 88% of men. Moreover, only 2% of women outright disagree with the statement compared to 8% of men.

Almost all Communal Elites believe girls and boys should be educated about finance in the same manner, with 87% in agreement and only 8%

6%

11%

13%

23%

20%

49%

46%

13%

16%

Strongly agree

Strongly

disagree Agree

4%

Disagree Neutral

32%

24%

61%

55%

2%

9%

3%

8%

2%

Strongly agree

4%

AgreeNeutralDisagreeStrongly disagree

2%

4%

4%

6%

6%

9%

64%

55%

24%

26%

AgreeNeutral Strongly agreeDisagreeStrongly disagree



BOYS AND GIRLS SHOULD BE EDUCATED ABOUT MONEY IN THE SAME WAY

HUSBANDS AND WIVES SHOULD KNOW EACH OTHER’S FINANCIAL AFFAIRS

174COMMUNAL ELITES

Gender Rolesdisagreeing outright, despite most feeling that men are better financial manager than women. This suggests that members of the segment may feel that girls and boys need to be brought closer to parity in their financial management skills. However, women in the segment hold more progressive gender views in regards to this question, with 94% in agreement compared to 84% of men. Moreover, only 2% of women outright disagree with the statement compared to 8% of women.

Two thirds of Communal Elites (67%)do not believe the gender of a loan applicant affects whether or not the loan is ultimately issued, whereas 16% believe it does, both in line with averages amongst Pakistanis. Given that this segment has the most direct experience with formal providers, it is surprising they are no more aware of gender bias against women in loan issuance than the average Pakistani. It is important to note that the vast majority of this segment, nearly 90% reports never having borrowed from a bank.

Nearly half of Communal Elites (44%) believe that women understand new technologies better than men, though a quarter disagree outright, compared with 57% and 18% of Pakistanis overall, respectively.

5%

13%

17%

16%

23%

56%

42%

11%

13%

3%

Agree Strongly agreeNeutralDisagree

Strongly

disagree

18%

12%

46%

36%

15%

25%

18%

21% 6%

Disagree Neutral Strongly agreeAgreeStrongly disagree

3%




OPPORTUNITIES

How might we build on Communal Elites’ strong social networks by equipping them with

financial tools that offer secure savings with social features?

+How might we multiply the value of Communal Elites’

savings behavior by offering long-term, low risk financial investment opportunities?

175COMMUNAL ELITES


Create products and services that:

● Offer long-term growth and stability● Facilitate social engagement, perhaps including

messaging● Offer planning and prioritization functions that help

them meet big, longer-term life goals, such as saving for weddings or other big household events

● Helps them manage the financial impact of their positions as hubs in their networks, and help them move their social financial activity to secure, flexible formal channels

Engage through:

● Feature phones, including existing DFS accounts and other USSD-based services

● Formal channels that they already own● Marketing that affirms and formalizes a sense of

identity as a hub of social financial activity and authority

176COMMUNAL ELITES

global segmentation framework - karandaaz pakistan...this allows the fsp to design products and...

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