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Financial inclusion – A means of resilience for Southern mediterranean countries


Written by Frédéric Dubessy on Thursday, December 23rd 2021 à 14:55 | Read 490 times




Differences in economic status between men and women and in development between urban and rural areas, difficulty in accessing financial services for young people… Southern Mediterranean countries are lagging behind in terms of financial inclusion.
 
Yet, for years, international institutions such as central banks and political decision-makers have identified it as one of their priorities, extolling its positive impact on sustainable social and economic development.
 
Researchers at the Euro-Mediterranean Economists Association (EMEA) and Euro-Mediterranean Network for Economic Studies (EMNES) have looked into data, regulatory frameworks and policies put in place to promote financial inclusion in Egypt, Jordan, Lebanon, Morocco and Tunisia.
 
As highlighted in their study* published on 6 th December 2021, the Covid-19 health crisis demonstrated the importance of financial inclusion in the resilience shown in the Southern Mediterranean by lessening the economic and social fallout among the disadvantaged and micro, small and medium-sized businesses. AS pointed out in the study, "It played a vital role by facilitating access for these groups to digital financial services and, in particular, by mitigating the impact of travel restrictions, bank branch closures and a reduction of the dependence on cash”.

Wider adoption of digital technology

The states relied on digital technology to distribute social aid, particularly among workers in the informal economy, thus promoting its wider uptake today among the population. Consequently, digital wallets in Jordan increased from 360,000 in 2018 to 1.2 million at the end of 2020. In Egypt, the proportion of mobile and internet banking services has increased substantially. In Tunisia, the end to commissions on electronic transfers (of 100 Dinars or under) and cash withdrawals has boosted these types of operations.
 
The study also highlights the various obstacles to financial inclusion in the five countries, pointing to financial illiteracy, insufficient funds, the requirement for substantial guarantees, limited trust in financial institutions of a certain section of the population and a lack of access to, and cost of, financial services.
According to the EMEA and EMNES economists, "Financial education initiatives need to be encouraged, with classes on the subject included at secondary and higher education levels”. They also suggest better promotion of financing measures and seeding funding available to micro, small and middle-sized businesses and developing and boosting guarantee systems, while enhancing coordination between institutions to prevent over-indebtedness among their clients.

* "Financial inclusion in the southern and eastern mediterranean countries". The research team is led by Prof. Rym Ayadi, President, EMEA and Director, EMNES. It includes Sandra Challita, research fellow , EMEA and researcher, EMNES and Mais Shaban research fellow at EMEA and EMNES. Country contributions were provided from EMNES researchers: Alia El Mahdi, Taghreed Hassouba, Egypt, Nooh Alshyab, Serena Sandri, Dima Daradkeh, Jordan , Sandra Challita, Lebanon, Najat El Mekkaoui, Yeganeh Forouheshfar, Sara Loukili, Morocco, Olfa Benouda, Soumaya Ben Khelifa, Dorra Hmaied, Rania Makni, Tunisia.



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