The Arab Monetary Fund (AMF) has said that Arab countries are counting on digital financial inclusion to facilitate access to financial services for 63% of the adult population, especially for females; youth; and micro, small and medium enterprises.
In a new study, the Fund explained that the governments of Arab countries focus on benefiting from the opportunities offered by modern technologies to increase financial inclusion by expanding the provision of banking and financial services via internet and mobile phones.
In the AMF’s 17th edition of its “Digital Financial Inclusion” series, the Fund indicates that the great development of means of communication via the Internet and modern technologies within the framework of the Fourth Industrial Revolution, such as artificial intelligence, big data, and cloud computing, helped to enable Financial institutions expanded the reach of their financial services to the financially excluded groups, whether individuals or micro, small and medium enterprises, which helped reduce the cost of providing financial services and improve their levels of efficiency.
In this brief, the AMF indicated that there are 1.7 billion adults around the world, according to international estimates, who do not have bank accounts, of whom 1.1 billion have mobile phones, which represents a special opportunity for developing countries to benefit from the expansion of the use of mobile phones in accessing financial services. Studies also indicate the positive impact of digital financial inclusion on economic performance, as digital financial inclusion can help boost global GDP by 6% and achieve total gains of $3.7trn by 2025.
Each 1% increase in the number of people who use mobile phones in their banking transactions leads, according to estimates, to improving per capita income by about 0.3%.
AMF added that at the level of geographical regions, both the continents of Africa and Asia are distinguished by playing a pioneering role in the field of digital financial inclusion, pointing out that the Indian experience is considered one of the most successful global experiences in terms of increasing levels of digital financial inclusion.
The success of the Indian experience is largely due to the government’s tendency in 2009 to adopt the biometric identity project known as (Aadhaar), which is the largest national identity project in the world, through biometric footprint, which provides secure and unique proof of identity that has been used to open bank accounts and access digital financial services for all segments of the population.
The fund recommended supporting the digital and financial infrastructure, integrating digital financial inclusion into national strategies and visions, adopting a regulatory and supervisory framework supportive of digital financial inclusion, adopting a supportive environment for digital financial services providers, focusing on increasing levels of financial literacy, and following up the progress in terms of digital financial inclusion.
