Financial Inclusion Measurement in the Arab World

In the race toward full financial inclusion, the Arab world lags behind other regions. Nearly 70% of adults (168 million) report no account ownership. This figure goes up to 80% in the developing countries of the region, constituting the largest area of exclusion from formal financial services. Similarly, access to formal credit is less than half the global average. Low levels of financial inclusion in the region are the result of unserved demand, in the absence of a suitable formal offer. This is notably evidenced by the massive use of informal credit by at least 92 million borrowers. Women, low-income people, and youth are the most excluded.

Detailed and accurate data are necessary to identify priorities and measure progress. While the general diagnosis is undeniable, better understanding financial inclusion patterns in each country will require market studies that analyze the demand for financial services.

Following the request of the central banks of the region, the Arab Monetary Fund’s (AMF) Financial Inclusion Task Force (FITF) was established in 2012 to identify ways to improve financial inclusion in the Arab world. Through this research, FITF has taken a preliminary step to improve the quality of data collected from financial services providers, and will continue to work to advance measurement of financial inclusion in the Arab world, thereby allowing member countries to accurately measure their progress to financial inclusion when they wish.