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Financial inclusion in the Middle East and North Africa : analysis and roadmap recommendations

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  • Pearce, Douglas

Abstract

The paper provides an assessment of the state of financial inclusion in the MENA region, and identifies constraints, opportunities, and priorities for significantly improving access to finance. Practical recommendations for improving financial inclusion are outlined. Firstly, governments could agree a Financial Inclusion Strategy that is underpinned by improved data, that has both public and private sector commitment, and that scales up financial access on a large scale, principally through bank accounts. Secondly, the regulators should provide a legal and supervisory framework that enables access to finance to be expanded primarily through banks, but with regulatory space for the use of agents, mobile phone technology, and for a finance company model for microcredit and leasing. Interest rate caps on microloans should be removed, and instead consumer protection and supervisory capacity for microfinance should be strengthened, while prudent competition between financial service providers should be promoted. Thirdly, financial infrastructure needs to continue to be a focus area, and in particular credit information and secured transactions. Finally, barriers to the growth of Islamic financial services should be removed so that they can better meet market demand.

Suggested Citation

  • Pearce, Douglas, 2011. "Financial inclusion in the Middle East and North Africa : analysis and roadmap recommendations," Policy Research Working Paper Series 5610, The World Bank.
    • Handle: RePEc:wbk:wbrwps:5610
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    References listed on IDEAS

    as
    1. Shamshad Akhtar & Douglas Pearce, 2010. "Microfinance in the Arab World : The Challenge of Financial Inclusion," World Bank Publications - Reports 10923, The World Bank Group.
    2. World Bank, 2008. "Finance for All? Policies and Pitfalls in Expanding Access," World Bank Publications - Books, The World Bank Group, number 6905, December.
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    Cited by:

    1. Novat Pugo Sambodo & Riswanti Budi Sekaringsih & Meikha Azzani & Esa Assyahid, 2016. "Indonesian Muslim Household Financial Inclusion Profile: Evidence from IFLS4 and IFLS5 Panel Data," Universitas Gadjah Mada Working Papers on Islamic Economics and Finance 2017007, Universitas Gadjah Mada, Faculty of Economics and Business.
    2. Tarna Silue, 2021. "Financial Inclusion and Economic Growth : Evidence in the Digital Environment of Developing Countries," Working Papers hal-03281843, HAL.
    3. Ajide Folorunsho M., 2021. "Financial Inclusion and Labour Market Participation of Women in Selected Countries in Africa," Economics and Culture, Sciendo, vol. 18(1), pages 15-31, June.
    4. Masoud Mohammed Albiman & Hamad Omar Bakar, 2022. "The Role of Financial Inclusion on Economic Growth in Sub Saharan African (SSA) Region," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 8(4), pages 363-384, October.
    5. Tii N. Nchofoung & Simplice A. Asongu & Vanessa S. Tchamyou, 2022. "Gender political inclusion and inclusive finance in Africa," Working Papers of the African Governance and Development Institute. 22/063, African Governance and Development Institute..
    6. Aman Pushp & Rahul Singh Gautam & Vikas Tripathi & Jagjeevan Kanoujiya & Shailesh Rastogi & Venkata Mrudula Bhimavarapu & Neha Parashar, 2023. "Impact of Financial Inclusion on India’s Economic Development under the Moderating Effect of Internet Subscribers," JRFM, MDPI, vol. 16(5), pages 1-15, May.
    7. Xuluo Yin & Xuan Xu & Qi Chen & Jiangang Peng, 2019. "The Sustainable Development of Financial Inclusion: How Can Monetary Policy and Economic Fundamental Interact with It Effectively?," Sustainability, MDPI, vol. 11(9), pages 1-14, May.
    8. Marrouch, Walid & Turk-Ariss, Rima, 2014. "Joint market power in banking: Evidence from developing countries," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 31(C), pages 253-267.
    9. Ekin Ayşe Özşuca, 2019. "Gender gap in financial inclusion: Evidence from MENA," Economics and Business Letters, Oviedo University Press, vol. 8(4), pages 199-208.
    10. Shahid Manzoor Shah & Amjad Ali, 2022. "A Survey on Financial Inclusion: Theoretical and Empirical Literature Review," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 310-330, December.
    11. Neaime, Simon & Gaysset, Isabelle, 2018. "Financial inclusion and stability in MENA: Evidence from poverty and inequality," Finance Research Letters, Elsevier, vol. 24(C), pages 230-237.
    12. Ichraf Ouechtati, 2020. "The Contribution of Financial Inclusion in Reducing Poverty and Income Inequality in Developing Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(9), pages 1051-1061, September.
    13. Tarna Silue, 2021. "Financial Inclusion and Economic Growth : Evidence in the Digital Environment of Developing Countries," CERDI Working papers hal-03281843, HAL.
    14. Fadi Hassan Shihadeh & Azzam (M T) Hannon & Xiu Hua Wang, 2017. "The Financial Inclusion Development in Palestine," Business and Economic Research, Macrothink Institute, vol. 7(1), pages 189-198, June.
    15. repec:wbk:wbpubs:12550 is not listed on IDEAS
    16. Malak Reda, 2013. "The Effect of Mergers and Acquisitions on Bank Efficiency: Evidence from Bank Consolidation in Egypt," Working Papers 770, Economic Research Forum, revised Sep 2013.
    17. World Bank, 2013. "Opening Doors : Gender Equality and Development in the Middle East and North Africa," World Bank Publications - Books, The World Bank Group, number 12552, December.
    18. Ozili, Peterson K, 2020. "Theories of financial inclusion," MPRA Paper 101810, University Library of Munich, Germany.
    19. Ozili, Peterson K, 2020. "Financial inclusion research around the world: a review," MPRA Paper 101809, University Library of Munich, Germany.
    20. Kim, Dai-Won & Yu, Jung-Suk & Hassan, M. Kabir, 2018. "Financial inclusion and economic growth in OIC countries," Research in International Business and Finance, Elsevier, vol. 43(C), pages 1-14.
    21. Wang, Yong & Duan, Yubin & Dou, Jiali, 2023. "Does resource-richness cause resources curse in financial market? A sustainable development overview for RCEP economies," Resources Policy, Elsevier, vol. 80(C).
    22. Mary A. Caplan & Julie Birkenmaier & Junghee Bae, 2021. "Financial exclusion in OECD countries: A scoping review," International Journal of Social Welfare, John Wiley & Sons, vol. 30(1), pages 58-71, January.

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    More about this item

    Keywords

    Access to Finance; Financial Literacy; Banks&Banking Reform; Debt Markets; Emerging Markets;
    All these keywords.

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