12 October 2017
Only 33 percent of adults in Jordan, 27 percent of women, have an account with a financial institution, while 38 percent is completely excluded from the formal financial system, according to a new study mandated by the Central Bank of Jordan (CBJ), in cooperation with the Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ).
Overall access to finance in Jordan has improved in recent years, yet inequalities remain, particularly for vulnerable groups such as the women, forcibly displaced persons (FDP) and youth, according to a CBJ-GIZ joint announcement from 9 October 2017.
The gender gap is still persistent as women (27.2%) are much less likely than men (37.6%) to have an account with a financial institution. Similarly, young people (aged 18-24; 23.6%) are less likely to have an account than older people (aged 25+; 38.6%). Members of the low-income group have far fewer accounts than those with high-paying jobs (bottom 40% vs. top 60% in terms of income; 19.3% and 43.7%, respectively). Non-Jordanians (9.5%) own accounts to a substantially lesser degree than their Jordanian fellow citizens (43.6%).
The 2017 study of financial inclusion in Jordan was commissioned by the German Agency for International Cooperation (GIZ) in support of the Government of Jordan for the Promotion of Financial Inclusion in Jordan, a program that is carried out with funding from the European Union and the German Federal Ministry for Economic Cooperation and Development (BMZ).
Arab countries have recognized financial inclusion as a key policy objective that stimulates growth and employment, reduces poverty, promotes social well-being, reduces socio-economic inequalities and contributes to financial stability. Financial inclusion empowers the unbanked and financially under-served segments to contribute to and benefit from achievements in sustainable development.
CBJ is part of the Financial Inclusion for the Arab Region Initiative (FIARI), jointly launched by the Arab Monetary Fund (AMF), GIZ and the Alliance for Financial Inclusion (AFI) on 14 September 2017 during the AFI Global Policy Forum in Sharm El Sheikh, Egypt, under the auspices of the Council of Arab Central Banks and Monetary Agencies’ Governors.
FIARI aims to help accelerate conducive policies and actions for enhancing Arab societies access to financial services through an effective coordination mechanism by supporting the implementation of national financial inclusion policies. The regional initiative is using financial inclusion as a driving force for sustainable economic and social development, aligned with the range of the United Nations Sustainable Development Goals (SDGs).
FIARI’s main beneficiaries include Central Banks in the Arab region, Ministries of Finance, other ministries in the Arab region in charge of SMEs, women and employment, among others, as well as relevant market players.
Six AFI members from the Arab Region are currently part of FIARI, with more expected to join during its implementation. Besides CBJ, these include Central Bank of Egypt, Central Bank of Mauritania, Banque Al-Maghrib, Palestine Monetary Authority, Central Bank of Sudan, Central Bank of Syria, Ministère des Finances de la République Tunisienne, Central Bank of Yemen
For more details about the study, please visit the Microfinance in the Middle East and North Africa (MENA) Region Financial Inclusion Empowerment Programme.