Ninety-two percent of the money Pakistanis send home now arrives digitally, according to figures from the government’s cashless initiative review. Almost none of it stays: in FY2020 the banking system took in 16 deposits for every 100 cash withdrawals, and by FY2025 fewer than nine. The money lands on a rail that records it and is gone the same day.

There is a household I have never met. I can describe its month anyway, because the pattern is written into the remittance data several million times over. A woman in Gujranwala cannot borrow against the shop she has run for years, though her husband, let’s call him Nadeem, has sent money home from the Gulf every month for 11 years and never missed one. That is 132 transfers, Saudi Arabia first and then the Emirates, every one logged at both ends. To a Pakistani bank, both of them are strangers.

The assumption is that Pakistani banks do not recognize money sent from abroad. They do. In car financing, several accept remittances outright as evidence of income, requiring a run of consecutive deposits into a family member’s account. HabibMetro caps the monthly instalment at 40 percent of net income for salaried and business customers, and at 75 percent for remittance-based ones, treating money sent from abroad as steadier than a local salary. Its home financing product sets no minimum income requirement at all. These are Roshan Digital Account products, where the borrower is the overseas Pakistani and the relative in Pakistan is the co-applicant. Eleven years of transfers counts as income here. It buys a car.

Now take the collateral away. On an unsecured personal loan the published criteria are a minimum salary for the salaried and a minimum balance in the account for everyone else. Remittances are not among the tests. The same income that qualified the household for a car loan does not appear at all.

So, she is judged on whether money happens to be sitting there when the bank looks, and hers never is. Taking it out at once is sensible where cash works everywhere and a balance earns nothing. A balance can also be arranged: borrow from a relative, leave it a month, apply. What cannot be arranged is 132 consecutive transfers from a documented foreign employer. The evidence is not in question. What changes is whether there is something to repossess.

That tells you the real obstacle, and it is not information. A banker in Lahore can see this income perfectly well; he has been using exactly this evidence to write car loans. What he cannot see is any way to get his money back. The earner is 1,900 kilometers away, the family owns nothing on paper, and chasing a small facility through the courts would cost more than it recovered. He declines, and he is not being unreasonable.

The evidence is not in question. What changes is whether there is something to repossess. 

Mehreen Durrani

Nothing in the State Bank’s rules requires that outcome. Its rules already let banks lend in rupees to Pakistanis working abroad in two situations: against balances they hold in an account, and to buy a home. Both are secured. What stands between this family and an unsecured facility appears to be product policy rather than regulation, which means a bank could change it next quarter, without asking anyone.

It would not have to invent much. Since 2024 Pakistan’s instant payment system has been connected to Buna, the Arab Monetary Fund’s cross-border platform, with the rupee admitted as a settlement currency. Money from the Gulf arrives in seconds, into a named account, on a system both regulators can see. Very little has been built on it.

What that permits is ordinary. A slice of each transfer stays in the account, pledged against the loan, and accumulates, which answers the balance question and is also the bank’s security. Repayment is taken from the next transfer as it arrives, rather than chased after the money is spent. The husband is named alongside his wife, which gives a Pakistani bank no power abroad but does give both of them a credit standing worth protecting. Start small, lend more as it is repaid.

None of that needs inventing either. Banks already mark a lien against an overseas Pakistani’s deposits and hold it until maturity. They already accept a run of remittances as proof of income. Every component is in production and has been for years. All of them are bolted to a car.

The obvious flaw is that Nadeem loses his job. The transfers stop, the pledged balance is small, and everything fails at once. That is the argument for small loans and short terms, and why this suits families with a little room rather than those living transfer to transfer. The claim is not that a remittance makes anyone creditworthy. It is that 11 years of one ought to count for something.

Until this summer there was little reason to bother. Remittances were subsidized and arrived regardless. The transfer-cost scheme was discontinued on July 1 and the cost passed to the banks, 76 billion rupees last year and a projected 85 billion to 90 billion this year, with the State Bank governor saying institutions must make it back elsewhere. The industry now carries a large annual cost attached to customers who bring it no lending business at all.

The direction of travel is set, too. On Aug. 18 the State Bank rewrote its housing finance rules and told banks to assess informal income using approved proxy models, with a standard form for people whose earnings come without a salary slip. The principle is conceded: repayment capacity can be established without conventional documentation. It is simply confined to a product secured by a house. Extending it to lending secured by nothing is a smaller step than it sounds, and a trial in the State Bank’s own sandbox would settle whether the signal holds.

By every official measure Nadeem’s wife is already financially included. She has an account, and money arrives in it every month through a regulated bank. She still cannot borrow against a shop she has run for years. He has been making his case for 11 years, 132 times over, through a channel the system can see. None of it is written down anywhere he can use.

-Mehreen Durrani is a strategy and transformation independent professional operating at the intersection of policy and technology, driving digital transformation and strategic partnerships to deliver institutional and economic impact.