Q&A with Katia Mehanneche, Regional Manager, Arab Region, Alliance for Financial Inclusion
Can you give us an overview of the current state of financial inclusion in AFI’s Arab region?
AFI has 12 Arab region members in eight countries: central banks and financial regulators from Mauritania, Morocco, Tunisia, Egypt, Jordan, Palestine, Iraq, and Sudan. Across the region, we see a high commitment to reduce inequalities, and to financially include disadvantaged groups, in particular women, and youth aged 15- 30, who respectively account for 50% and 60% of the population, forcibly displaced people, persons with disabilities, and small businesses. That commitment is reflected in the fact that almost all countries have developed a National Financial Inclusion Strategy (NFIS): seven countries have developed and begun implementing a NFIS, and four have already initiated the second phase of their strategy or are developing a second NFIS.
Many have dedicated strategies and roadmaps on specific areas such as Financial Education, Fintech, Digital Payments, Sustainable Finance, or Gender Inclusive Finance. And these efforts are bearing fruit: financial inclusion rates have risen by between 30% and 200% across the region since 2016.
Where do current National Financial Inclusion Strategies focus, and what challenges do regulators typically face?
Building an NFIS is a national process that considers economic, cultural and institutional contexts and involves local public and private stakeholders. All countries in the AFI Arab region have defined their own vision and objectives, aiming to solve national challenges which tend to be repeated across the region. Common challenges also indicate huge opportunities for economic growth and financial stability, mainly the financial inclusion of women and youth: the gap between men and women stands between 5 to 40 points across AFI member countries. NFIS priorities mirror the challenges faced by disadvantaged populations, which include:
- financial inclusion of women and youth, particularly in rural areas
- economic empowerment
- access to finance for MSMEs
- impact of climate change
To support their objectives, regulators have identified enablers – databases, regulatory frameworks, financial education programs, digital infrastructure platforms and services, consumer protection, awareness campaigns – which have also become priorities.
Knowing where you want to get to is vital, but you also need to know where you are. That’s why building a strong, accurate, relevant mechanism of data collection and monitoring is a top priority across the region. Most countries have undertaken demand-side surveys combined with supply side surveys, to compensate the risk of bias, but a lot remains to be achieved, especially on gender disaggregated data. Ensuring good collaboration and coordination between stakeholders is a necessity, and most countries have implemented national councils for financial inclusion, and created financial inclusion units and secretariats, for that purpose.
How is AFI supporting national and cross-border efforts to advance financial inclusion?
AFI is a member-driven leadership alliance, made up of 90 members who are working to develop and implement financial inclusion policies which leave no one behind. AFI helps through a platform of services, including capacity building, technical assistance, knowledge development and dissemination, peer exchanges, and partnerships with academia and development partners. AFI’s Arab region members also benefit from the Arab Region Financial Inclusion Policy Initiative (ARFIPI) launched in 2024, which provides a space for countries to discuss common financial inclusion challenges, and learn from each others’ experiences. As well as organizing regular events and knowledge exchange, ARFIPI is currently working to develop a regional data platform.