COVID negative repercussions points at importance of financial inclusion: Arab central banks council

The negative repercussions of the COVID-19 pandemic have highlighted the great importance of deploying Fintech for the purposes of financial inclusion in the Arab region, the Secretariat of the Council of Arab Central Banks and Monetary Authorities’ Governors said in a statement.

Coronavirus pandemic has also led to increasing the demand for digital financial services and accelerating the need for digital transformation and improved digital financial services in economic policies in the region, it added in the statement.

This came on the occasion of celebrating the Arab day for financial inclusion scheduled on Tuesday.

The available statistics highlight the great opportunities inherent in the development of digital services, as nearly 85 percent of adults in the Arab region have a mobile phone, 48 percent have a mobile phone and can access the Internet at the same time, 7 percent own a mobile money account, and 33 percent made or received digital payments in the previous year, compared to nearly 44 percent globally, according to the statement.

“In this context, the Council of Arab Central Banks and Monetary Authorities’ Governors, considering the growing need to intensify awareness of the importance of financial inclusion among all community categories in Arab countries, endorsed in 27 of April 2016 as the “Arab Day for Financial Inclusion”, celebrated this year under the theme of ‘Role of Digital Transformation in Increasing Financial Inclusion’, said the statement.

The council added that it is keen to give great importance to the issues of financial inclusion in Arab countries, as it welcomed the launch of the ‘Financial Inclusion for the Arab Region Initiative’ (FIARI) by the Arab Monetary Fund, in cooperation with several regional and international organisations, to empower capabilities that aim to overcome the challenges of enhancing the financial inclusion indicators in Arab countries.

It called on the FIARI’s partner organisations to pay more attention to supporting the use of fintech in enhancing the access of young people; women; and micro, small, and medium enterprises (MSMEs) to financial services.

It also welcomed the ‘Digital Financial Transformation Framework’ in the Arab region, issued in the framework of the FIARI in September 2020, as a roadmap to help develop domestic policies and action plans to create an inclusive and secure fintech ecosystem.

In this regard, Arab countries can work on developing country action plans that contribute to digitally transforming financial systems and supporting economic development to achieve sustainable growth and poverty alleviation, according to the statement.

The Council also reaffirmed the need to integrate all community categories into the formal financial system, especially young people, women, entrepreneurs, and MSMEs, to benefit from fintech and follow-up efforts to raise the awareness of all these categories, protect their financial rights, and improve their knowledge of digital financial issues, so that they can make sound investment decisions.

The council also said it values the efforts made by Arab central banks, monetary authorities, commercial banks, and official financial institutions in past years to celebrate the Arab Day for Financial Inclusion and the related activities and events that contributed to spreading financial literacy among people.

Director-General Chairman of the Board of the Arab Monetary Fund Abdelrahman Al-Hamidy asserted the importance and the role of financial inclusion in addressing the economic challenges that affect economic growth.

He added that this goal can be achieved by mobilising resources to increase investments and create new job opportunities.

Al-Hamidy also praised the increasing attention being paid to issues related to enhancing financial inclusion by policymakers in Arab countries, which would help to address the challenges of poverty, unemployment, and social justice.

Al-Hamidy praised the ‘Buna’ Arab payments platform as well, which was launched recently by the Arab Monetary Fund, and its role in providing innovative services in accordance with international standards and the best practices and technologies.

He said that he is looking forward to the platform’s role in encouraging the development of digital financial services in the Arab region and linking Arab countries with their main global trading partners.