UBL, NBP, and MCB Bank Lag in Financial Literacy and Sustainability Transparency: FFA Report

Asian banks, including Pakistani counterparts, must strike a balance between inclusion aims and financial literacy and consumer empowerment programs, while also informing consumers about their sustainability policies and financing methods, according to Fair Finance Asia’s(FFA) newest assessment.

The FFA released a new scorecard entitled “Empowering Consumers as Drivers of Sustainability in Asia’s Financial Sector.” This scorecard evaluates the policies of 15 banks across Pakistan, Cambodia, Indonesia, the Philippines, and Thailand in four critical domains: financial inclusion, consumer protection, financial literacy and education, and mechanisms for engagement and accountability.

In Pakistan, United Bank Ltd (UBL), MCB Bank, and the National Bank of Pakistan (NBP) achieved superior average scores in financial inclusion (6.7 out of 10) and consumer protection (6.9 out of 10). However, they exhibited subpar performance in financial literacy (3.3 out of 10) and engagement mechanisms (1.2 out of 10).

“Despite UBL, MCB Bank, and NBP offering products targeting unban­ked or underbanked populations, the scorecard results show that they fail to publicly disclose measurable targets for financial inclusion,” said the scorecard.

None of the assessed banks disclose information to prevent over-indebtedness, and neither have mechanisms for consumers to file complaints about financed projects’ environmental, social, and governance (ESG) impacts.

“In addition, UBL, MCB Bank, and NBP do not disclose information regarding the companies or projects they finance,” said the report.

The evaluated Pakistani banks were unable to elucidate how their sales personnel and/or authorized representatives engage proactively with both current and prospective consumers regarding sustainable finance investment products. This further underscores a significant disconnect between the banks and their stakeholders.

“Banks in Pakistan appear to prioritize profit over purpose, often promoting financial products with limited knowledge of their impacts on individuals and society. Banks must do more to empower people and protect the planet,” said Fair Finance Pakistan Country Programme Lead Asim Jaffry.

FFA Programme Lead Bernadette Victorio stated, “Asian consumers are increasingly expecting transparency and accountability from financial institutions.”