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Observer
16-05-2025
- Business
- Observer
60% of adults in Arab region still unbanked: ESCWA
MUSCAT: Nearly 60 per cent of adults in the Arab region remain excluded from formal financial systems, according to a new report by the United Nations Economic and Social Commission for Western Asia (ESCWA). The Annual SDG Review 2025 paints a sobering picture of persistent financial exclusion that is undermining the region's ability to meet the Sustainable Development Goals (SDGs) by the 2030 deadline. The report, which focuses on financial inclusion as a cross-cutting enabler of sustainable development, reveals those inequalities continue to lock millions out of economic opportunity. 'The Arab region cannot afford to treat financial services as a luxury,' said Economic Affairs Officer at ESCWA Mario Jales, the lead author of the report. 'Without inclusive finance, we cannot hope to lift people out of poverty, support small businesses, or achieve equitable growth.' Women remain among the most excluded, with only 29 per cent having access to bank accounts or mobile money — making the Arab region the worst-performing globally on women's financial inclusion. The gender gap stands at a staggering 13 percentage points. Persons with disabilities fare no better: just 21 per cent have access to financial services, often due to discriminatory practices, inaccessible infrastructure, or lack of supportive regulation. The data also show sharp rural-urban divides. In many countries, rural populations are up to twice as likely to be unbanked compared to urban residents. Youth, informal workers and refugees face additional barriers, compounding cycles of vulnerability. Mobile finance has seen rapid growth, with mobile money accounts doubling between 2020 and 2023. Yet, the report warns of a 'digital divide within the divide': poor connectivity, limited smartphone access and weak digital literacy prevent the most marginalised from benefitting. In conflict-affected countries, mobile services are often disrupted or unavailable. Access to credit also remains a major challenge. Fewer than one in five adults in the region have borrowed from a formal financial institution. For micro-, small- and medium-sized enterprises (MSMEs), this financing gap restricts innovation and job creation. ESCWA calls for urgent reforms. These include strengthening consumer protection, promoting financial literacy, integrating gender and disability perspectives into financial regulation; and improving digital infrastructure. It also advocates for interoperable digital ID systems to facilitate safe and inclusive access to services. The report places financial inclusion within the broader SDG context. With only 18 per cent of global targets on track — and stagnation or regression in several Arab countries — ESCWA emphasises that inclusive finance is essential for progress on poverty, education, gender equality and decent work.
Scoop
15-05-2025
- Business
- Scoop
Over 60 Per Cent Of The Arab World Still Outside The Banking System
15 May 2025 Even more impressively, the number of Egyptian women with an account increased by 260 per cent, though gender gaps do remain. But how you widen financial inclusion overall is a question the Arab region is currently grappling with. A new report from the UN Economic and Social Commission in Western Asia (UNESCWA) published on Thursday highlights the challenge. Nearly 64 per cent of adults in the 22 countries in the Arab region are still without an account – or 'unbanked' – a higher number than all other regions of the world and significantly higher than the 24 per cent global average. The report warns that this level of financial exclusion will negatively impact economic opportunities and the region's ability to meet Sustainable Development Goals (SDGs) by 2030. 'The Arab region cannot afford to treat financial services as a luxury. Without inclusive finance, we cannot hope to lift people out of poverty, support small businesses, or achieve equitable growth,' said ESCWA's Mario Jales, lead author of the report. 'The digital divide within the divide' The report finds that women and disabled people have even less access to financial services – only 29 per cent of women and 21 per cent of disabled people in the region have an account. Similarly, rural communities and younger and older people also experience lower rates of inclusion in the banking system. The report also highlighted that access to loans for small and medium-sized businesses is worryingly low, reducing entrepreneurial and other income-producing activities. In addition to gender disparities, there are variations within the Arab region – 81 per cent of people in low-income countries do not have access to an account in comparison to 67 per cent in middle-income countries and 23 per cent in the high-income bracket. Models of success Given that regional rates of financial inclusion remain so low, how do countries work to improve them? The basis of Egypt's success was the implementation of a comprehensive national strategy to promote financial inclusion, a strategy which actively worked to target underserved communities, ESCWA points out. For example, in Egypt, 22 per cent of ATMs in the country have now been equipped with accessibility features including brighter lighting and Braille keyboards. Other countries in the region have also implemented national strategies which include targeted initiatives. Jordan, which has the second widest gender gap in the region, implemented a Microfund for Women to provide loans for income-generating activities. There are now 60 branches across the country, serving 133,000 borrowers, 95 per cent of whom are women. Moreover, some banks in the region have worked to implement financial literacy classes and others have worked to tailor their services to underserved communities including by lowering minimum deposits. The report concludes that an expansion of all these activities – national policymaking which targets underserved communities and private bank activities which lower barriers to entry and support financial literacy – will be essential in improving financial inclusion. ' The path forward exists, but it requires political will, targeted investment and a whole-of-society approach,' the report concludes.
