Financial inclusion is the process to include the people who lack formal financial services. The concept of financial inclusion emerged globally in the times of the millennium, defined as the availability and usage of formal financial services, it essentially measures economic growth. The financially included individuals can invest in business, education and entrepreneurship which can pave way to poverty alleviation and economic development Although it is not rational to assume that all individuals have a preference for using mainstream banking services compared to use of cash, it still is essential to provide them equal opportunity and access to banking services. Thus, the role of banking services, credit and debt in the modern times cannot be disregarded and all players, including market can benefit from the use of formal financial services properly. Despite the current focus of policies and regulations devoted to enhancing access to finance in Pakistan, there are number of underlying factors causing financial exclusion. The main goal of the study is to identify the factors that determine the level of financial inclusion in Pakistan and suggest policy measures to improve the level of inclusion. In connection to this purpose, this study adopts a holistic approach & investigates, for the very first time, the Financial Inclusion Process for Pakistan from two perspectives; Financial Inclusion from both demand & supply side & the Impact of Financial Inclusion on the Credit Risk of Banking Sector; All, seminal investigations for Pakistan. The first essay of this study investigates the predominantly neglected dimension of financial Inclusion; the Demand Side of Financial Inclusion; This study employs number of indicators of demand side for Pakistan; using the emerging Evidence based approach of combining theoretical insights with data & employing econometric technique of ARDL with the help of time series data (1973 – 2017) for financial Inclusion determinants, micro determinants of banking sector, comprising of four categories of Banks and macro determinants, we measure the dimensions of demand side, Usage and Barrier; from two perspectives; The Banked (Usage dimension) and The Unbanked (Barrier dimension) segments of society. The Unbanked side is further analyzed by bifurcating it in Voluntary Barrier to Financial Inclusion and Involuntary Barrier to Financial Inclusion. We further develop an index for demand side of financial Inclusion. The empirical findings suggest that voluntary barriers to Financial Inclusion have a more negative or deteriorating effect as compared to involuntary barriers in Pakistan. This is an important finding of the study as latest literature on Financial Inclusion also focusses on the phenomenon of self-exclusion. From the results it is evident that the Banking determinants stand out with greatest impact on Financial Inclusion which is positive and reinforcing in nature. Thus, the onus of Financial Inclusion lies on Banking Industry where the demand portfolios and micro determinants contribute to Financial Inclusion process. The second essay of this study gives the Supply Side of Financial Inclusion the due focus and investigates the financial inclusion process for Pakistan by supply side – the top down approach by employing number of indicators of supply side; measures the supply side dimension of Access, a first time secondary data measurement by using time series data (1973 – 2017) of all bank types of Pakistan. The results signify that improvement in soft consumer loans reinforces financial inclusion and increase in low sized, no frill advances contribute to the Financial Inclusion The third essay of the study performs a broad-based assessment of Credit Risk & financial inclusion nexus by using a panel of 48 banks of Banking sector of Pakistan and employing approx. 1,000 balance sheets over period of 2001 to 2017. Using logit discriminant analysis this study develops a multifactor model which presents the relationship between the NPL’s; a measure for credit risk of banks and bank’s sensitivity to financial Inclusion determinants of supply side. The process is such where changes in financial Inclusion factors and bank sensitivity to those changes affect the NPL’s, and NPL’s in turn impact the probability of bank’s higher credit risk. The multi factor model constructed in this study has the specification of the indirect test that uses estimated NPL to Gross advance ratio calculated from estimated changes in financial Inclusion determinants and banks sensitivities to those financial Inclusion variables as proxies of financial Inclusion factors We investigate for Pakistan the impact of financial inclusion upon credit risk; where 16 percent are financially included & 85 percent of these 16 percent are served by banking sector; whether credit risk of banking sector increases or decreases due to financial inclusion; determine whether financial Inclusion is less risky-sound investment or high risk-bad investment for banking sector of Pakistan. The exploration model of credit risk of the stylized Banking sector of Pakistan develops on the rationale that supply-side financial Inclusion conditions play a formidable role in determining the credit risk level. We believe that NPL’s (measure of credit risk) are highly affected by financial Inclusion factors, bank specific variables and the micro determinants of risk; Capital, Asset, Management, Equity and Liability (CAMEL) category characteristics. In this context, we also evaluate the “Volume of Financial Inclusion” & “Quantitative frequency of financial Inclusion” for Pakistan. The exploration model results depict that NPL are highly affected by financial inclusion determinants of supply side and micro characteristics. The study put forth a strong evidence that Pakistan’s banking sector displays considerable credit risk due to greater probability where relationship of financial inclusion with credit risk is negative in nature. The risk assessment depicts a very stylized banking sector which experiences substantial levels of credit risk due to piling up of NPL’s overtime. The fourth essay of this study offers an Evidence-Based-Way-Forward Approach for digital financial inclusion in Pakistan by providing an extensive overview of digital lending & Fin-tech eco-system of Pakistan; performs a qualitative SWOT assessment of economic, demographic, branchless banking & technological landscape, conducive for the penetration and growth of fin- tech in Pakistan. We define the Digital Maturity Matrix for Pakistan inclusive of Tech & Touch Spectrum of existing Fin-Techs of Pakistan and also tap upon the environment that is required to be constructed for Pakistan to exploit the full potential. Supervisor:- Dr. Abdul Jalil Co-Supervisor: Dr. Shahid Mansoor Hashmi