Asian banks, including those in Pakistan, must strike a balance between financial inclusion goals and initiatives to improve financial literacy and consumer empowerment, according to the latest scorecard published by Fair Finance Asia (FFA). The report emphasizes the need for banks to ensure clients are well-informed about their sustainability strategies and financing practices.

The scorecard, titled “Empowering Consumers as Drivers of Sustainability in Asia’s Financial Sector,” was released on Thursday and evaluates the policies of 15 banks across Pakistan, Cambodia, Indonesia, the Philippines, and Thailand. It focuses on four key areas: financial inclusion, consumer protection, financial literacy and education, and engagement and accountability mechanisms.

In Pakistan, United Bank Ltd (UBL), MCB Bank, and the National Bank of Pakistan (NBP) performed relatively well in financial inclusion (6.7 out of 10) and consumer protection (6.9/10). However, they scored poorly in financial literacy (3.3/10) and engagement mechanisms (1.2/10), highlighting significant gaps in their approach to empowering consumers.

The report noted that while these banks offer products targeting unbanked or underbanked populations, they fail to publicly disclose measurable targets for financial inclusion. Additionally, none of the assessed banks provide information on measures to prevent over-indebtedness or mechanisms for consumers to file complaints about the environmental, social, and governance (ESG) impacts of financed projects.