The Committee System In Pakistan

In Pakistan, the committee system, also known as BC (ballot committee), has gained popularity among women as an informal method of interest-free savings and pooling money.

While the committee system offers certain advantages, it also presents challenges and risks. This article aims to provide a concise overview of the pros and cons of the committee system for women in Pakistan.

Pros of the Committee System

Financial Inclusion

• Committees provide an opportunity for women, particularly those facing barriers to formal financial services, to participate in saving and investment activities.
• By joining committees, women can access funds for various purposes such as starting a small business, meeting financial emergencies, or investing in education.

Social Support and Networking

• Committees foster a sense of community and support among participants. Women often form strong social networks within their committees, offering mutual assistance and guidance.
• Participation in committees can enhance social bonding, build trust, and create opportunities for collaboration and knowledge sharing.

Disciplined Saving

• The committee system encourages disciplined saving habits among participants. Regular contributions to the committee ensure consistent savings, helping women achieve their financial goals over time.
• The fixed monthly payment structure promotes a culture of saving and financial responsibility.

Cons of the Committee System

Risk of Fraud and Mismanagement

• The committee system is susceptible to fraud, mismanagement, and defaulters. Instances of individuals disappearing with the pooled funds have been reported, causing significant financial losses for participants.
• The lack of proper documentation and transparency within committees makes it challenging to hold individuals accountable for their actions.

Limited Formal Protections

• The committee system operates outside formal financial regulations and legal frameworks. Participants may not have legal recourse in case of disputes or fraudulent activities.
• The absence of regulatory oversight exposes participants to financial risks and leaves them with limited protection.

Dependency on Trust and Reputation

• The success of the committee system relies heavily on trust and reputation among participants. Any breach of trust or negative experiences can erode confidence in the system.
• Participants need to be cautious and discerning when selecting committees and ensure the credibility and reliability of the organizers and fellow members.

While the committee system in Pakistan offers certain benefits, it also poses risks and challenges for women. To mitigate these risks and provide women with safer financial options, it is crucial to emphasize the importance of financial knowledge and literacy. Empowering women with financial education can help them explore alternative avenues, such as formal banking services, where their money can be safeguarded. By promoting financial inclusion and enhancing financial literacy, women can make informed decisions and navigate the financial landscape more effectively, securing a better future for themselves and their families.