Advancing Crisis-Resilient Social Protection Through a Hybrid Social Protection Scheme in Pakistan

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - The Hybrid Social Protection Scheme (HSPS) aims to enhance crisis resilience among vulnerable households in Pakistan by promoting savings and financial inclusion through a contributory savings model with government matching incentives [15][35][36]. - The study highlights that financial literacy, digital inclusion, and family support are critical drivers of saving behavior, while loans and lack of self-control negatively impact savings [15][36]. - The pilot program targets 150,000 individuals from poor households, requiring a minimum contribution of PKR 1,500 every three months, with a government matching incentive of 40% [35][36]. Summary by Sections Introduction - Pakistan has invested in social protection initiatives for over a decade, including cash transfer programs managed by the Benazir Income Support Program (BISP) [21][22]. - The COVID-19 pandemic highlighted the need for enhanced resilience among vulnerable populations, particularly those in the informal sector [23][24]. Objectives and Design of the Savings Scheme - The HSPS aims to smooth consumption during economic hardships, promote saving behavior, and enhance financial inclusion through bank savings accounts [34][35]. - The scheme includes a two-year pilot with matching contributions to encourage savings among participants [35][36]. Quantitative Analysis - The analysis reveals that only 28% of respondents save money, with the majority saving approximately 8% of their income [61][62]. - Trust in formal financial institutions is a significant barrier to saving, with many respondents expressing a preference for informal saving methods [62]. Qualitative Analysis - Focus Group Discussions (FGDs) indicate that beneficiaries recognize the importance of saving but face challenges due to low disposable income and financial literacy [61][62]. - The qualitative insights support the need for training and awareness initiatives to improve financial and digital literacy among participants [58][62].