Financial Inclusion in the Arab Region: A Growing Challenge
In recent years, a significant movement towards financial inclusion has taken root in the Arab region, underscored by a remarkable 260% increase in the number of Egyptian women with bank accounts. However, despite this positive trend, stark gender disparities remain, reflecting a broader issue of financial accessibility that the Arab region is grappling with.
The Stark Reality of Financial Exclusion
According to a recent report from the UN Economic and Social Commission for Western Asia (UNESCWA), nearly 64% of adults in the 22 Arab countries remain without a bank account—a startling statistic that exceeds the global average of 24%. This persistent financial exclusion carries profound implications for economic opportunities and hampers progress toward the Sustainable Development Goals (SDGs) set for 2030.
“The Arab region cannot afford to treat financial services as a luxury. Without inclusive finance, we cannot hope to lift people out of poverty, support small businesses, or achieve equitable growth,” emphasized Mario Jales, the lead author of the report.
Gender and Disability: Disparities in Financial Access
While the surge in account ownership among women in Egypt is promising, the report reveals troubling disparities in access to financial services. Only 29% of women and a mere 21% of disabled individuals in the region have a bank account. Additionally, rural communities and various age groups, including the youth and senior citizens, face additional barriers to inclusion. This "digital divide within the divide" further complicates efforts to promote equitable financial opportunities.
The Economic Impact of Low Financial Inclusion
Limited access to financial services significantly curtails entrepreneurial potential, particularly in small and medium-sized enterprises (SMEs). Low loan availability reduces income-producing opportunities and hampers economic growth. Notably, 81% of people in low-income countries lack access to accounts, compared to 67% in middle-income and 23% in high-income nations.
Models of Success: Learning from Egypt and Beyond
Despite these overarching challenges, some countries are paving the way for improved financial inclusion. Egypt stands out with its comprehensive national strategy to promote financial services actively targeting underserved communities. For instance, 22% of ATMs in Egypt now feature accessibility options, such as brighter lighting and Braille keyboards, enhancing access for diverse user groups.
Jordan, on the other hand, has introduced the Microfund for Women, offering loans specifically for income-generating activities. With 60 branches serving 133,000 borrowers—95% of whom are women—this initiative illustrates how targeted funding can shift the narrative on financial inclusion.
The Role of Financial Literacy
Beyond structural changes, some banks in the region are making strides by implementing financial literacy programs. By tailoring services to underserved populations and reducing minimum deposit requirements, they are working to dismantle barriers that have historically obstructed access to banking.
The Path Forward
The UNESCWA report advocates for a multi-faceted approach to improve financial inclusion, emphasizing the need for targeted national policymaking and private sector initiatives. With a call for enhanced political will and targeted investments, the report highlights the importance of a whole-of-society strategy.
While progress is being made in some areas, the road ahead remains fraught with challenges that demand collective action and innovative solutions to ensure that financial services are accessible to all.
