Client Name

Akseer Research

Faculty Advisor

Dr. Aitzaz Ahsan Alias Sarang

SBS Thought Leadership Areas

Investment Decision Making

SBS Thought Leadership Area Justification

The project, "Understanding Investor Profiles in Pakistan's Equity Market: Barriers & Opportunities," aligns profoundly with the thought leadership area of Investment Decision Making by dissecting the multifaceted factors influencing individuals' choices regarding equity market participation. The research explicitly identifies core determinants, behavioral biases, and potential policy levers that collectively shape these crucial financial decisions. For instance, the survey outcomes highlight that a significant majority of respondents perceive the stock market as moderately to highly risky, a perception directly serving as a primary barrier for over a third of non-investors. This fear of risk, coupled with a pervasive "Lack of Knowledge" (cited by nearly two-thirds of non-investors), fundamentally impedes informed investment decisions. The project further reveals that practical barriers, such as complex registration processes and a lack of user-friendly digital access, significantly deter potential investors; a substantial portion of non-investors indicated they would be 'Very Likely' or 'Likely' to invest if the market were easier to access and understand, and a strong interest was shown in 'one-click' investing via banking apps. Moreover, the study uncovers the influence of trust, with only a third of existing investors confident in the market's regulation and transparency, suggesting that perceptions of an unreliable environment can hinder participation. Beyond rational considerations, the project delves into behavioral aspects: the widespread phenomenon of investors and non-investors knowing someone who actively invests points to the strong role of social influence and peer networks in shaping investment choices. Interview findings also hinted at behavioral biases like loss aversion, where individuals prioritize the safety of traditional assets like gold and real estate over potentially higher-return, but unfamiliar, equity investments, even with large sums of money. Finally, the project offers actionable insights for influencing these decisions; for example, the overwhelming demand for financial literacy programs underscores the potential for education to empower individuals, while the strong positive response to tax incentives among non-investors demonstrates how policy can directly encourage investment. Furthermore, the interest in simplified digital onboarding processes and 'one-click' solutions highlights how technological advancements can remove friction from the decision-making process, mirroring successes seen in countries like India. In essence, this project provides a robust, evidence-based understanding of the intricate landscape of investment decision-making in Pakistan, offering vital insights for stakeholders aiming to foster a more inclusive and active investor base.

Aligned SDGs

GOAL 8: Decent Work and Economic Growth

Aligned SDGs Justification

The United Nations Sustainable Development Goal: 8 emphasizes sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all. This ELP contributes to this goal in the following ways:

  • Wealth Building: By encouraging equity investments, individuals gain access to regulated, long-term wealth generation tools.
  • Financial Inclusion: Digitally enabled investment options can bring women, youth, and underserved segments into formal financial markets.
  • Capital Formation: Broader investor base increases the liquidity and enable companies to raise funds for growth and employment.
  • Economic Diversification: Moving savings from gold and real estate to equities promotes entrepreneurial financing and innovation.

NDA

No

Abstract

Undertaken in partnership with Akseer Research, this Experiential Learning Project addresses the critical issue of Pakistan’s low equity market penetration, which stands at just 0.14%—substantially lower than regional peers like India (20%) and Egypt (0.62%). Despite Pakistan’s well-developed capital market infrastructure, with over 523 listed companies and 200 brokerage firms, retail participation remains minimal. The objective of this study was to understand the barriers limiting equity penetration, profile both active and potential investors, and propose practical strategies to boost participation inclusively and sustainably.

The project adopted a mixed-methods approach, combining qualitative insights from seven interviews with quantitative data from 152 survey responses. The research explored investor demographics, financial literacy, behavioral biases, risk perceptions, and attitudes towards Shariah-compliant investing. Secondary research included comparative analysis of India and Egypt’s markets alongside industry reports and regulatory reviews.

Key findings revealed that while over 65% of non-investors have considered entering the market, they are held back by lack of knowledge (64.5%), trust issues, onboarding difficulties, and religious concerns (20.6% unsure of halal compliance). The majority of respondents were urban, young (78.3% aged 18–27), and digitally literate, highlighting opportunities for targeted educational and digital strategies. The report recommends embedding equity access into banking apps, promoting certified Shariah-compliant bundles, enhancing transparency, and expanding financial literacy initiatives. The study aligns with SDG 8, advocating for greater financial inclusion and capital formation. Through technology, education, and regulatory reform, Pakistan can unlock its retail investor potential and build a more inclusive market.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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