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Abstract
The purpose of this paper is to understand the determinants of financial inclusion and the reasons that impedes financial inclusion in Pakistan. Moreover, the preferences of individuals regarding formal and informal sector are also analyzed. For this, data have been taken from the Global Findex database 2021. Various measures of financial inclusion representing ownership, usage, and fintech are used. The independent variables used are: gender, age, education, and income. Due to the binary nature of dependent variable, we used Probit model technique for estimation. The results show that being female reduces the likelihood of financial inclusion while age and higher income increases it. Moreover, expensive financial services, financial constraint, and someone else having account are significant hurdles. Individuals prefer informal sector over formal for their savings and borrowing. The results of the study are useful for policy makers to focus on the determinants and hurdles proposed in this study
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