> Posted by Center Staff
As the Arab Spring revealed, financial exclusion (in this case unemployment and a widespread lack of economic opportunity etc.) can have widespread effects on a country’s political and social stability. The Arab Policy Forum, co-sponsored by CGAP, GIZ, and Sanabel, was recently held to address this lack of financial access and its consequences. Check out a recent post on the CGAP Microfinance Blog to find out more about the forum and some of the opportunities and challenges for financial inclusion in the MENA region.
The post begins:
The Arab Spring leaves no doubt: financial exclusion costs. Arab policy makers, who long regarded microfinance as charity for the poor, are realizing that a financial system that serves only 20 percent of the population is a key ingredient in the recipe for political instability. For too long, positive aggregate growth figures were hiding the underlying causes of the unrest: unemployment, high inflation, authoritarian rule and a lack of economic opportunities for the majority of the population, especially younger generations. It is within this context that CGAP, GIZ and Sanabel co-sponsored the Arab Policy Forum on Financial Inclusion in Cairo in mid-May. In her keynote address at this Forum, Ms. Lobna Helal, Deputy Governor of the Central Bank of Egypt, stated that the Arab Spring was above all an expression of discontent with economic conditions and inequalities.
Indeed, economic and financial inclusion in the Middle East and North Africa (MENA) region lags behind other parts of the world. According to the global financial inclusion survey (Findex), MENA ranks last in regional comparison on financial inclusion. On average, only 18 percent of adults have an account with a formal financial institution compared to a global average of 50 percent (41 percent in developing countries). Only 5 percent of adults in the Arab World have received a loan in the past year. At the same time, working age youth comprise one third of the Arab World, and one quarter is unemployed. Given demographic prospects, that means that countries in the MENA region need to create 80 million jobs in 15 years.
To continue reading this post on the CGAP Microfinance Blog, please click here.
Image credit: middleeasthub.com
Have you read?
Financial Exclusion or Social Exclusion?
Practitioners and the Global Findex Data
Sowing Sustainable Finance: Making Rural Inclusion a Priority