Only 18% of the residents in the Arab region have accounts in financial institutions, compared to 43% in developing countries generally, and 24% in the sub-Sahara African countries, said Mohamed Barakat, Chairman of the Union of Arab Banks (UAB).
Barakat said international attention to financial inclusion stared on 29 December 2003, when the then-Secretary General of the United Nations Kofi Annan, announced that most poor people are still missing basic and sustainable financial services; whether savings, credit, or insurance. The largest challenge facing us is to address the obstacles that prevent people from active participation in the financial sector.
Barakat made his comments in a speech during the Arab Banking Forum held Thursday in Sharm El-Sheikh under the slogan “ financial inclusion, strategic direction towards financial and social stability”.
World Bank research showed that about 38% of the total adult residents in the world do not enjoy the ability to get formal financial services, Barakat said. This is despite the progress achieved in strengthening banking services provided to individuals, in addition to insurance, stock markets, micro-finance and informal financial services.
He added that studies show that in 2014 about 50% of adults, which is almost 2 billion people, are still outside banking systems, and most of them are in the countries of South Asia, Middle East, and North Africa.
Spreading financial services and increasing communal financial literacy will help create consumers who are more responsible, aware, and financially committed, which will make them able to lead the change in economy and activating innovation, according to Barakat.
He said it is necessary to start financial education in schools, and stressed the necessity of ensuring suitable financial services for small investors and owners of small and medium enterprises in the current difficult economic conditions are available.
The main goal of the financial inclusion, set by the United Nations, is that all families and companies get, at a reasonable cost, a number of financial services. These services include savings, short term and long term loans, financial leasing, mortgage, insurance, salaries, and domestic and international financial transfers.
