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In recent years, many developing countries, including Pakistan, have made efforts to increase financial inclusion so that their population can easily avail a range of services provided by financial institutions. Debt provision can play an important role in increasing financial inclusion. This study identified social and economic factors which affect entry of households into the debt market. This will also help to derive a borrower profile to target debt provision and financial inclusion. Older people have a higher likelihood of taking debt than younger ones while those who are employed in the agricultural sector have a higher likelihood of taking debt. Inheritance is important to explain life cycle of savings, but it does not affect entry of households into the debt market in Pakistan. This research will help to channel efforts by focusing on the factors affecting debt decisions and demand of debt of households in order to increase financial inclusion through debt. [ABSTRACT FROM AUTHOR]