Locations
On the Money:
Investing in Pakistan's Women
By Van Nguyen | Deputy Resident Representative, UNDP Pakistan
With the SDG 5 already off-track and global aid shrinking, Pakistan must decisively invest in its women, not just as beneficiaries but as drivers of economic growth.
Recently, Pakistan slipped further to the very bottom of the 2025 Global Gender Gap Index, ranking 148th.1 While this alarming position has triggered concern, it also presents a clear imperative: from here, the only way is up.
But why has Pakistan ended up here? A closer look at the data gives us the answers. Women make up half of Pakistan’s population, and yet, only 21.4 percent are part of the labor force2, the gender gap in bank account ownership is 34 percent3, and less than 1 percent of commercial loans go to women-led businesses.4
When women are kept away from their fair share of resources, it results in a deep feminization of poverty, which is seen in Pakistan’s case. Around 40 percent of Pakistanis are living below the poverty line, and an overarching majority – 75 percent– of these are women. At the current rate of progress, it will take 149 years to close Pakistan’s gender gap.
This exclusion of half the population is costing Pakistan dearly. Every year the country loses over PKR 500 billion to the gender wage gap.5 According to the World Bank, Pakistan’s long-run GDP per capita could rise by over 57 percent if women’s employment matched that of men. At a time when the country is contending with debt distress, climate shocks, and demographic pressure, investing in women and girls offers a guaranteed pathway to sustainable growth.
Yet Official Development Assistance (ODA) directed toward gender equality has declined globally, from 45 percent in 2019-20 to 42 percent in 2021-22, with projections suggesting a further dip amid tightening aid budgets. Pakistan, too, will be impacted as existing financial architectures fall short, particularly for women and marginalized communities.
Gender-Responsive Budgeting
To streamline investments in women’s economic empowerment, Pakistan must, therefore, urgently double down on gender-responsive budgeting at the federal and provincial levels, provide women easier access to capital, and leverage fintech opportunities to ensure women’s financial inclusion.
Gender-responsive budgeting is fundamental to both gender justice and fiscal justice. Encouragingly, Pakistan has already taken a positive step as it piloted gender budget tagging at the federal and provincial levels.
At the federal level, a gender analysis of the FY2023–24 budget revealed that only 9 percent of total spending was gender-relevant.6 For FY2025–26, the government has reaffirmed its commitment to strengthening gender responsiveness, allocating 9.2 percent of the current budget and 6.9 percent of the development budget to gender-sensitive areas.7 Notably, the federal government has also disaggregated gender-sensitive budgets and expenditures across all ministries, divisions, and departments, enhancing transparency and enabling more evidence-based policymaking.
In Punjab, pilot efforts revealed that only 5-7 percent of expenditures were tagged as ‘highly gender relevant’ (interventions that directly supported women and girls), and 36-44 percent were ‘moderately relevant’ (initiatives that may potentially benefit women and girls).8 In Sindh, the government increased funding for girls’ schools, recruited more female teachers, and introduced stipends aimed at reducing dropout rates, demonstrating a commitment to advancing gender-responsive reforms.
While these are all developments in the right direction, sustaining this momentum is critical. As a next step, gender impact assessments should be integrated into all new public policies and projects. Moreover, gender budgeting units must be scaled up, finance personnel trained in tagging, and summary reports published regularly to ensure transparency and strengthen public accountability.
Direct Capital to Women
Unlocking private capital has become essential and can amplify and accelerate financing for gender equality.
In a major achievement, Kashf Foundation launched South Asia’s first Gender Bond in November 2023.9 The Gender Bond closed with participation from nearly 40 private sector investors. The proceeds, amounting to PKR 2.5 billion, are intended to finance women-led micro-businesses, support the development of housing for 30,000 low-income women, and improve school infrastructure to enhance access to quality education.
The Gender Bond is a compelling example of how capital market instruments can be leveraged for gender outcomes. It sets a precedent for organizations to follow. The Securities & Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP) must scale up and fast-track additional gender bonds and blended finance tools tailored to support women-led MSMEs.
Innovative Finance is the Game-Changer
Fintech is redefining financial access for Pakistani women, providing them with agency, and offering faster and safer ways to manage their money. The UNDP National Human Development Report 2024, Doing Digital for Development, found technology to be the game-changer for women’s financial inclusion, with 61 percent of women using mobile wallets as their primary bank account and almost a third of them using it at least once a week.
Pakistan has taken incredible strides in making banking more accessible and inclusive for women.10 SBP’s Financial Inclusion Strategy promotes branchless banking for women. JazzCash, Pakistan’s largest mobile money provider nearly doubled its female user base in the last 3 years to 30 percent by introducing maternity loans, health micro-insurance and app features tailored for women’s needs. JS Bank’s ‘Her Account’ provides fee waivers and literacy support. SBP aims to include at least 10 percent female banking agents and 20 percent female representation across the banking workforce, ensuring women are facilitators of financial inclusion.
UNDP-supported initiatives like the Global Shield are piloting gender-responsive financial mechanisms, including weather-indexed insurance tailored for women farmers. Green finance models in clean cooking and solar irrigation are reducing women’s physical burden and environmental exposure. These innovations show that with targeted investment, women’s resilience can be scaled. To do so, at least 25 percent of climate adaptation funds should support women-led initiatives with gender targets embedded in national climate strategies.
The Road Ahead
Pakistan is making progress in gender-focused financial innovations and while the early results are promising, the road ahead is a long one. The challenge now is to institutionalize these gains and embed gender equity into all financial decision-making.
Unless financial decision-making at both public and private levels embeds women’s economic empowerment as a fundamental value and source of progress, Pakistan will remain trapped in a cycle of one step forward, two steps back.
Moving backward is no longer an option—the path ahead must lead forward.
1. World Economic Forum, Global Gender Gap Report 2025, World Economic Forum, 2025, Available at: https://www.weforum.org/publications/global-gender-gap-report-2025/in-full/
2. Pakistan Bureau of Statistics, Labour Force Survey 2020‑21 Annual Report, Ministry of Planning, Development & Special Initiatives, Government of Pakistan, 2021, Available at: https://www.pbs.gov.pk/publication/labour-force-survey-2020-21-annual-report
3. State Bank of Pakistan, National Financial Inclusion Strategy 2024–28, State Bank of Pakistan, 2024, Available at: https://www.sbp.org.pk/NFIS/NFIS2024-28.pdf
4. Ministry of Finance, Government of Pakistan, Federal Budget FY2023–24 Gender Analysis, Government of Pakistan, 2023.
5. World Bank, Pakistan Country Economic Memorandum: Charting Pakistan’s Development, World Bank, 2023, Available at: https://documents1.worldbank.org/curated/en/099345107022230326/pdf/IDU0bd894bf3056e504750092f10338ae9c8dff8.pdf
6. Ministry of Finance, Government of Pakistan, Federal Budget FY2023–24 Gender Analysis, Government of Pakistan, 2023
7. Ministry of Finance, Government of Pakistan, Federal Budget FY2025-26, https://www.finance.gov.pk/budget/budget_2025_26/abs_eng_10062025.pdf
8. Punjab Finance Department, Gender Budget Tagging Report FY2024–25, Government of Punjab, 2024
9. SECP, Gender Bond Guidelines, Securities and Exchange Commission of Pakistan, 2023
10. State Bank of Pakistan, National Financial Inclusion Strategy Progress Report, State Bank of Pakistan, 2023