Key messages

Introduction

Financial inclusion is a critical enabler of inclusive economic growth and social development. Access to and use of financial services – including savings, credit,paymentsand insurance – empowers vulnerable populations, fosters entrepreneurship, alleviates poverty and inequality, and promotes sustainable development. The transformative role of financial inclusion is strongly anchored in the 2030 Agenda for Sustainable Development, where it underpins several Sustainable Development Goals (SDGs), and the Addis Ababa Action Agendaof the Third International Conference on Financing for Development, whereit is a catalyst for equitable and sustainable growth. This global commitment is further reinforced by multipleUnited Nations General Assembly resolutions that underscore the critical role of financial inclusionin achieving sustainable development.^[1]

The Arab region continues to face significant challenges in advancing financial inclusion, remaining well below the global average in terms of accessibility to financial services with 197 million people still financially excluded. Policymakers, regulators^[2] and financial institutions^[3] in the region have been advocating for enhanced financial inclusion through policiesand practical solutions aimed at addressing key challenges, such as weak regulatory frameworks, limited financial literacy, high costs of financial services, cumbersome procedures, and geographic remoteness. Vulnerable groups – including women, persons with disabilities, low-income individuals, young people, older adults,rural populations, unemployed individuals, migrantworkers, refugees and micro,small and medium-sized enterprises (MSMEs) – face additional barriers. These include restrictive legislation, inadequate infrastructure and financial products that do not meet their specific needs.For example, the region exhibits the lowest financial inclusion of women globally, with only 29 per cent of women having a bank account or using mobile money services, compared to 74 per cent globally. Tackling barriers to the financial inclusion of women and other underserved groups is crucial to unlocking the region’s full economic potential and ensuring equitable growth for all.

Digital finance holds significant potential as a driver of financial inclusion. Itcan facilitate access to financial services, reduce expenses, and improve security and transparency. It also encourages innovation and experimentation with new financial services and products. While Gulf Cooperation Council (GCC) countries are emerging as leaders in this type of technology, much of the broader Arab region has yet to fully leverageits transformative power. For example, in 2021, only 36 per centof adults made or received a digital payment, significantly below the global average of 67 per cent and lower than any other region.

The Annual SDG Review 2025, the fourth in the series, provides a comprehensive analysis of financial inclusion in the Arab region by integrating statistical insights with an examination of policy frameworks and the contributions of financial institutions. It is guided by the 2030 Agenda promise to leave no one behind and its whole-of-society approach. Chapter 1 of the report assesses the levels and patterns of financial inclusion across the region, drawing on the United Nations Economic and Social Commission for Western Asia (ESCWA) Financial Inclusiveness Index and other data sources, and exploring the unique challenges faced by three underserved segments: women, persons with disabilities, and MSMEs. Chapter 2 examines policies and regulations, focusing on national financial inclusion strategies,central bank circularsand other regulatory tools, while highlighting the pivotal roles of digital finance and financial literacy as enablers of financial inclusion. Chapter 3 evaluates the contributions of financial institutionsthrough a review of reports from the largest banks in the region, highlighting efforts to enhance access to digital and traditional financial services, design inclusive financial products, and promote financial literacy. By addressing these dimensions, the report provides input to the regional dialogue on financial inclusionto be held at the Arab Forum for Sustainable Development 2025, setting the stage for the ongoing workstream at ESCWA on financial inclusion in the Arab region.

The Arab region faces significant challenges in financial inclusion, remaining underserved by formal financial institutions compared to other regions globally. In 2021, 197 million people – 64 per cent of adults across the 22 Arab countries – were financially excluded, far exceeding the global average of 24 per cent (figure 1A).This exclusion disproportionately affects vulnerable populations, such as women and persons with disabilities, while also presenting substantial challenges to MSMEs. Limited access to and utilization of formal financial services constrain economic opportunities, hinder poverty reduction efforts, restrict access to essential services, and stifle entrepreneurship, inclusivity and gender empowerment. Recent progress in some countries, including Egypt (box 2),offers hope for the future, but significant challenges remain.

Digital finance is emerging as a key driver of financial inclusion, particularly in high-income countries in the Arab region. However, the broader region has yet to fully leverage the transformative potential of technology. In 2021, nearly 30 per cent of adults in the GCC countries used a mobile phone or the Internet to access a financial account, compared to less than 3 per cent in Arab middle-income countries.^[7] To address the region’s persistent financial exclusion, it is essential to unlock the potential of digital solutions to expand access to and usage of financial services.

Figure 1. Proportion of adults who did not have an account at a financial institution nor used a mobile money service in the past year, by region and Arab region country group, 2021 (Percentage)

Sources:Global Findex Database and ESCWA calculations.
Notes: Includes accounts in banks and other types of financial institutions. Averages are weighted by adult population.

A. ESCWA Financial Inclusiveness Index

According to the ESCWA Financial Inclusiveness Index^[8] – a composite measure based on 3 subindices encompassing 49 indicators related to financial inclusion – the Arab region ranks second to last globally, outperforming only sub-Saharan Africa (figure 2). With a score of 0.37 in 2023, it underperformed other regions with comparable per capita gross domestic product (GDP) levels, such as East Asia and the Pacific (0.55) and Latin America and the Caribbean (0.42).^[9] It also lagged behind South Asia (0.38), a region with less than half the Arab region’s per capita GDP. Notably, six Arab countries – including five least-developed countries (LDCs) and one affected by conflict – are not included in the index. Their inclusion would likely have lowered the Arab region’s overall score further, highlighting the realities of even greater disparities in financial inclusion.

Figure 2. ESCWA Financial Inclusiveness Index, by region, weighted by population, 2023

Sources: ESCWA Financial Inclusiveness Index and ESCWA calculations.
Notes:Averages are weighted by adult population.
Data for the Comoros, Djibouti, Somalia, the Sudan, the Syrian Arab Republic and Yemen were not available.

The ESCWA Financial Inclusiveness Index shows a positive correlation with per capita GDP at the regional and Arab region country group levels (figure 3). However, the Arab region underperforms in financial inclusiveness relative to expectations based on its per capita GDP level. This pattern is evident in both high- and mediumincome countries in the region.^[10]

The relationship between financial inclusion and per capita GDP is complex. While economic growth is an important factor, it alone is insufficient to foster financial inclusion. Other critical factors – including regulatory frameworks, quality of institutions, infrastructure, financial and digital literacy, inequality, social norms, conflict, instability, and women’s low participation rates in the labour force – play a significant role in shaping progress toward inclusive financial systems. Moreover, the relationship between financial inclusion and economic growth is not unidirectional; greater financial inclusion can also stimulate growth.

Figure 3. ESCWA Financial Inclusiveness Index and per capita GDP, by region and Arab region country group, 2023

Sources: ESCWA Financial Inclusiveness Index, World Economic Outlook Database and ESCWA calculations.
Note:Data for the Comoros, Djibouti, Somalia, the Sudan, the Syrian Arab Republic and Yemen were not available.

The relationship between financial inclusion and per capita GDP is complex. While economic growth is an important factor, it alone is insufficient to foster financial inclusion. Other critical factors – including regulatory frameworks, quality of institutions, infrastructure, financial and digital literacy, inequality, social norms, conflict, instability, and women’s low participation rates in the labour force – play a significant role in shaping progress toward inclusive financial systems. Moreover, the relationship between financial inclusion and economic growth is not unidirectional; greater financial inclusion can also stimulate growth.

Among the three subindices of the ESCWA Financial Inclusiveness Index, the Arab region scores moderately on enabling factors^[11] (0.63) but lags significantly on access^[12] (0.27) and usage^[13] (0.19) (figure 4). The pronounced gap between enabling factors and the other subindices suggests that countries in the Arab region are not fully capitalizing on existing conditions to enhance financial inclusion. Furthermore, the disparity between access and usage highlights that increased transaction account ownership does not necessarily lead to increased utilization. This pattern is also observed in many developing countries, including Brazil, China and India. In contrast, some developed countries, like Germany, the United Kingdom and the United States, exhibit a more balanced relationship between access and usage, effectively translating broader availability of financial services into higher levels of utilization.

Figure 4. ESCWA Financial Inclusiveness Index, by subindex, Arab region and selected countries, 2023

Sources: ESCWA Financial Inclusiveness Index and ESCWA calculations.
Notes: Arab region averages are weighted by adult population.
Data for the Comoros, Djibouti, Somalia, the Sudan, the Syrian Arab Republic and Yemen were not available.

The Arab region’s performance on access and usage varies considerably between the traditional and digital dimensions (figure 5). In the access subindex, the infrastructure and organizational framework supporting traditional financial services score a low 0.08, whereas the technological foundations enabling the expansion of digital financial services achieve a moderate 0.55. However, this dynamic shifts in the usage subindex: the utilization of financial services through traditional outlets scores higher at 0.27, compared to a notably lower 0.10 for digital platforms. This contrast underscores the region’s uneven progress in leveraging digital solutions to enhance financial inclusion.

Financial inclusion varies significantly across country income groups in the region (figure 6A). Arab high-income countries, with an overall index of 0.54, perform substantially better than other countries in the region and align more closely with East Asia and the Pacific and Europe and Central Asia. In contrast, Arab middle-income countries^[14] score much lower, with an overall index of 0.33, below the global average of 0.42 and well below middle-income countries in South Asia and Latin America and the Caribbean. Financial inclusion is particularly poor in the four middle-income countries in fragile or conflictaffected situations,^[15] which exhibit a score of only 0.24. Data for Arab low-income countries^[16] were not available, limiting further analysis.

Figure 5. ESCWA Financial Inclusiveness Index, traditional and digital dimensions, Arab region, 2023

Sources: ESCWA Financial Inclusiveness Index and ESCWA calculations.
Notes: Arab region averages are weighted by adult population.
Data for the Comoros, Djibouti, Somalia, the Sudan, the Syrian Arab Republic and Yemen were not available.

Figure 6. ESCWA Financial Inclusiveness Index, by Arab region country group and country, 2023

Sources: ESCWA Financial Inclusiveness Index and ESCWA calculations.
Notes: Country group averages are weighted by adult population.
A star (*) denotes countries in fragile or conflict-affected situations.
Data for the Comoros, Djibouti, Somalia, the Sudan, the Syrian Arab Republic and Yemen were not available.

Within the Arab region, Saudi Arabia stands out as the only country with relatively high scores for both access (0.42) and usage (0.46), indicating an effective conversion of access to active financial engagement. In sharp contrast, Lebanon exhibits the largest gap between access and usage: despite achieving a moderate access score of 0.31 – the highest outside the GCC subgroup – its usage score is alarmingly low at 0.10, ranking as the second lowest in the region. This highlights significant barriers that prevent access to financial services from translating into effective utilization, including weak governance and low trust in financial institutions in the context of the ongoing liquidity crisis (box 3).

B. Underserved segments

Specific groups within the Arab region face significant barriers to accessing and using formal financial services. This chapter delves into the state of financial inclusion for three groups: women, persons with disabilities and MSMEs. Despite their potential to contribute to economic development, these groups often remain marginalized and underserved by the formal financial sector. Other vulnerable groups, such as rural populations, lowincome individuals, young people, older adults, unemployed individuals, migrant workers and refugees, also face significant financial exclusion. Addressing challenges to financial inclusion for all groups is crucial to reducing poverty and inequality and promoting sustainable development.

The Arab region not only struggles with low overall levels of financial inclusion for both women and men but also exhibits the widest gender gap in financial inclusion globally. There is an urgent need for targeted interventions to address the unique obstacles faced by women. This need is explicitly acknowledged in the 2030 Agenda in SDG targets 1.4, 2.3 and 5.a.

Only 29 per cent of women in the Arab region reported owning an account at a financial institution or using a mobile money service in 2021, compared to 74 per cent globally (figure 7). The region not only lags behind regions with similar per capita GDP, such as East Asia and the Pacific (81 per cent) and Latin America and the Caribbean (70 per cent), but also behind those with lower per capita GDP, including South Asia (66 per cent) and sub-Saharan Africa (49 per cent).

The gender gap in account ownership – defined as the difference between the percentage of women and men who hold a transaction account or use mobile money services – stands at 13 percentage points in the Arab region. This gap is significantly wider than in East Asia and the Pacific (3 percentage points), South Asia (4 percentage points), and Latin America and the Caribbean (7 percentage points), while aligning closely with sub-Saharan Africa (12 percentage points). This disparity reflects entrenched systemic barriers in the Arab region, including discriminatory legislation, restrictive social norms, limited financial literacy, and unequal access to digital technologies, which disproportionately hinder women’s participation in formal financial systems.

Figure 7. Percentage of respondents who report having an account at a financial institution or report personally using a mobile money service in the past year, by gender and region, 2021

Source: Global Findex Database.
Note: Averages are weighted by adult population.

Within the Arab region, financial inclusion is markedly higher in high-income countries, where advanced financial and digital infrastructure facilitates greater access to services for both women and men. As illustrated in figure 8, 69 per cent of adult women in high-income countries in the Arab region reported owning an account at a financial institution or using a mobile payment service in 2021, compared to 26 per cent in middle-income countries and 13 per cent in low-income countries.

While financial inclusion is higher in high-income countries, gender disparities remain a concern. The 13-percentage-point gap between women and men in high-income countries is comparable to the regional average and only slightly lower than the average for middle-income countries (14 percentage points). This suggests that even in countries with advanced financial systems, persistent gender disparities hinder women’s access to financial services. A notable exception is the United Arab Emirates, where women have a higher account ownership rate (87 per cent) than men (85 per cent) – the only country in the Arab region in which this is the case.

Among middle-income countries, significant disparities exist in account ownership rates across the Maghreb and Mashreq subregions. While women in the Maghreb have higher overall account ownership (33 per cent) compared to the Mashreq (22 per cent), the Maghreb also experiences the largest gender gap in the Arab region (22 percentage points). This is particularly pronounced in Algeria (26 percentage points) and Morocco (23 percentage points).

By contrast, Mashreq countries exhibit the smallest gender gap in account ownership in the region (8 percentage points) but face substantial overall access challenges, indicative of deeper structural barriers affecting both men and women.^[17] The gender gap is particularly low in countries in fragile and conflict situations, including Iraq and the Syrian Arab Republic (7 percentage points in both) and Lebanon (8 percentage points). This is primarily due to the low levels of financial inclusion for both men and women in these countries. Jordan is an outlier in the Mashreq, exhibiting the second-widest gender gap in account ownership in the Arab region (25 percentage points).

This intra-regional variation underscores the need for tailored approaches that address subregional and country-specific contexts. Highincome countries are well positioned to leverage technological advancements and foster women’s entrepreneurship as pathways to close the gender gap in financial inclusion. By contrast, middle- and low-income countries require targeted investments in infrastructure, digital connectivity, literacy and microfinance solutions to expand women’s access to financial services.

Figure 8. Percentage of respondents who report having an account at a financial institution or report personally using a mobile money service in the past year, by gender and Arab region country group, 2021

Sources: Global Findex Database and ESCWA calculations.
Note: Averages are weighted by adult population.

The regional gender gap in these indicators consistently exceeds global levels. For example, the gender gap in digital payment usage is 12 percentage points in the Arab region, and 7 percentage points globally. These findings highlight systemic barriers that disproportionately limit women’s access to finance in the Arab region and hinder their broader economic empowerment.

Figure 9. Selected financial inclusion indicators, Arab region and world, by gender, 2021 (Percentage of respondents)

Sources: Global Findex Database and ESCWA calculations.
Notes: Averages are weighted by adult population.
For “made or received a digital payment”, data for Djibouti, Oman, Qatar and the Syrian Arab Republic were not available.

Globally, persons with disabilities face additional barriers to financial inclusion. These barriers stem from physical and digital inaccessibility, limited financial literacy, discriminatory practices, and regulatory frameworks that do not adequately address their needs. While the 2030 Agenda explicitly recognizes persons with disabilities in several goals (including SDG 10), there are no SDGs that directly address financial inclusion for persons with disabilities. However, broader inclusive targets, such as 1.4 and 5.a, inherently include persons with disabilities. Despite a lack of comprehensive data on the financial inclusion of persons with disabilities, studies and national-level data from a few countries provide insights into the challenges faced by this marginalized group.

National-level data on the financial inclusion of persons with disabilities in the Arab region remain sparse. Available figures from two countries suggest moderate disparities in access to financial services between persons with disabilities and persons without disabilities. In Somalia, 8 per cent of adults with disabilities held a bank account in 2022, compared to 10 per cent of those without disabilities.^[18] In Jordan, a study indicated that 40.5 per cent of adults with disabilities had a bank account in 2022, compared to 43.2 per cent for adults without disabilities. However, these findings should be interpreted with caution due to the small sample size of persons with disabilities in the Jordanian study.^[19] By contrast, data from outside the region reveal wider disparities between individuals with disabilities and those without disabilities. For instance, in the United States of America, 11.2 per cent of individuals (aged 25 to 64 years) with disabilities were unbanked in 2023, compared to 3.4 per cent of individuals without disabilities in the same age group.^[20]

It is important to note that available statistics may not fully capture the complexities of financial inclusion for persons with disabilities. Enhancing data collection and analysis efforts is crucial to gaining a deeper understanding of the challenges and opportunities within this population group. Comprehensive data are fundamental to inform the development of targeted policies that promote equitable access to financial services for all individuals, regardless of disability status.

Barriers to financial inclusion for persons with disabilities are multifaceted. Physical barriers, such as inaccessible automated teller machines (ATMs) and bank branches lacking ramps, elevators and signage, are a significant deterrent. Similarly, digital financial services often fail to support assistive technologies, such as screen readers or voice commands, limiting usability for persons with disabilities (example in box 4). Some financial institutions hold the perception that people with disabilities are riskier customers, which exacerbates these challenges. Social and cultural stigmas discourage financial institutions from targeting persons with disabilities as customers, resulting in a lack of tailored products and services. Moreover, financial institution staff often lack training in serving persons with disabilities. These challenges are compounded by the high costs associated with opening accounts, maintaining minimum balances, or obtaining credit, which disproportionately affect this already marginalized group.

Available data from countries outside the Arab region indicate significant barriers to traditional and digital financial services for persons with disabilities. In five sub-Saharan African countries, between 8 and 64 per cent of individuals with disabilities reported that banks were inaccessible in 2011.^[21] Crowd-sourced data primarily from developed countries revealed that 28 per cent of banks and 12 per cent of ATMs were not wheelchair-accessible in 2017.^[22] There is an urgent need for physical and digital accessibility in financial institutions to ensure inclusive financial services for persons with disabilities.

Globally, studies have shown that persons with disabilities are more likely to experience poverty compared to their peers without disabilities. This pattern is associated with limited access to education, employment and healthcare, as well as discriminatory attitudes and practices.^[23] The intersection of poverty and disability exacerbates barriers to financial inclusion. This cycle of poverty and disability can further hinder access to and utilization of financial services, as individuals may lack the necessary skills, knowledge and resources.

Financial inclusion for persons with disabilities is further complicated by intersecting vulnerabilities. Individuals belonging to multiple marginalized groups – such as women with disabilities, persons with disabilities residing in rural areas, or those living in countries in situations of conflict – face compounded barriers to financial inclusion. These individuals often experience higher rates of poverty and intersecting forms of discrimination and exclusion, in addition to the challenges they face due to their disability. For instance, in Somalia, only 6.1 per cent of women with disabilities had a bank account in 2022, compared to 10.3 per cent of men with disabilities. Only 5 per cent of individuals with disabilities residing in rural areas held a bank account in the same year, compared to 9.3 per cent of those living in urban areas.^[24] Addressing these intersecting vulnerabilities requires a nuanced and inclusive approach that considers the unique needs and experiences of diverse groups.

Enhanced data collection at the national and regional levels will be essential to designing evidence-based policies and tracking progress in bridging the financial inclusion gap for persons with disabilities.

Despite persistent challenges, some promising initiatives are emerging in the region. Some Arab States have taken policy action mandating financial institutions to improve accessibility for persons with disabilities (chapter 2 for details). Financial institutions are increasingly delivering on inclusivity targets established in national policies. For example, by December 2023, banks in Egypt had equipped 22 per cent of ATMs with features to enhance usability for persons with disabilities – such as improved lighting, Braille keypads, widerspaced numbers and headphone compatibility for visually impaired customers – surpassing the ratio of 10 per cent mandated by the Central Bank of Egypt.^[26] Egyptian banks are also increasingly issuing account opening forms in Braille and accepting signature stamps and fingerprints as an alternative to signatures across banking procedures.^[27]

Digital technologies have the potential to be a powerful tool for financial inclusion, providing accessible and convenient financial services. However, it is crucial to address the digital divide affecting persons with disabilities and ensure that financial services are accessible to persons with all types of disabilities. While digital financial services offer numerous benefits, they can also exacerbate existing inequalities if not designed and implemented inclusively.^[28] To maximize the potential of digital finance, it is imperative to prioritize accessibility and inclusivity in the design and delivery of financial services. The financial inclusion of persons with disabilities is aligned with the principle of leaving no one behind and a driver of economic growth and resilience. By addressing physical, digital and attitudinal barriers, countries in the Arab region can unlock the economic contributions of this underserved group.

Access to financial services for MSMEs is critical for sustainable development, as recognized in SDG target 9.3. However, the Arab region faces a significant financing gap for this market segment. With only 14 per cent of small-scale enterprises having a loan or line of credit, the region’s rate is less than half of the global average (29 per cent) and the lowest of any region globally (figure 10). This is particularly striking when the Arab region is compared to Latin America and the Caribbean (42 per cent), despite the regions having comparable income levels per capita. The Arab region also lags behind developing regions with considerably lower income levels, such as South Asia (26 per cent) and sub-Saharan Africa (17 per cent).

Figure 10. Proportion of small-scale enterprises with a loan or line of credit, by region, 2023 (Percentage)

Source: ESCWA calculations based on data from the World Bank Enterprise Surveys.
Notes: Simple averages.
Data for North America were not available.

The financial exclusion of MSMEs in the Arab region stems from challenges on both the supply and demand sides. On the supply side, financial institutions often prioritize lending to large corporations or Governments, viewing MSMEs as higher-risk borrowers due to their smaller size and perceived instability. The cost of borrowing is often prohibitively high for MSMEs. In addition, many MSMEs, particularly in rural areas, lack access to bank branches or other financial service providers.

On the demand side, limited financial literacy among MSME owners reduces their ability to navigate the financial system and utilize available services. Digital illiteracy and inadequate infrastructure also impede the adoption of digital financial solutions, which are increasingly integral to formal financial systems. The prevalence of informal operations among MSMEs – many of which are unregistered and lack proper regulatory recognition – further exacerbates their financial exclusion. Without credit histories, formal financial records or collateral, MSMEs struggle to meet the requirements of traditional lenders. Many MSMEs rely on informal financing sources, such as personal savings, family or community networks. This reliance often stems from distrust in formal institutions, cultural norms, or the perception that formal credit processes are overly complex, costly or inaccessible.

Socio-cultural barriers disproportionately affect women-led MSMEs, compounding their exclusion. Restrictive norms around women’s economic participation limit their access to networks, mentors and formal financial resources. Women entrepreneurs often face additional hurdles, including fewer assets to use as collateral and reduced visibility within financial ecosystems.

Addressing the financial exclusion of MSMEs in the Arab region requires a multifaceted approach, targeting both the supply and demand sides to foster a more inclusive financial environment for MSMEs. Microfinance solutions have been particularly successful in enhancing the financial inclusion of MSMEs in South and Southeast Asia, with initiatives often focusing on women entrepreneurs.

For formal micro, small and mediumsized enterprises, similar proportions of each subgroup reported having a mobile wallet (13– 15 per cent). However, informal microenterprises’ mobile wallet ownership was significantly lower (2 per cent).^[30]

The banking sector, primarily driven by profit, often lacks the incentive to proactively promote greater inclusion of underserved groups. Governments and regulators thus play a crucial role in formulating and implementing policies that ensure these groups are not left behind. A national financial inclusion strategy is an effective approach to building an inclusive financial system, fostering greater access to and utilization of financial services for all. It is typically developed through a multi-stakeholder consultation process and may follow one of two main approaches: a standalone strategy or a plan integrated within a broader national development strategy or financial sector strategy.^[31]

In the remaining two countries, the ministry of finance leads or co-leads alongside the central bank. This aligns with the global trend, where central banks lead financial inclusion efforts in 73 per cent of countries worldwide, ministries of finance in 10 per cent and other financial supervisory bodies in the rest.

At least five other countries (the Comoros, Iraq, Somalia, the Sudan and Yemen)^[32] have taken steps to develop similar strategies. While GCC countries, with the exception of Qatar, have not developed national financial inclusion strategies per se, they have included elements of financial inclusion in national financial sector development strategies, central banks’ strategic plans, fintech strategies or periodic financial sector reports.

The implementation and monitoring of financial inclusion strategies in the countries of the Arab region are governed by a multi-tiered institutional structure. In most countries, a high-level steering committee or council typically includes representatives from the central bank, various ministries and financial service providers, such as bank federations or associations and microfinance networks. This governance structure is primarily supply-driven, often lacking adequate representation from civil society to voice the needs of underserved groups. In some countries, the needs of these groups are identified through surveys or limited dialogue. Research into the success of financial strategies has shown that consultation by the leading entity, often the central bank, with other stakeholders, such as the private sector, is a crucial component of high-quality strategies (box 6).^[33] Countries have received policy advice, capacitybuilding and other forms of technical support for their financial inclusion endeavours through regional and global initiatives (box 7).

It is integrated into countries’ national financial inclusion strategies with plans for stronger regulation, although a few countries still have separate microfinance strategies. According to the World Bank, 6 out of 12 countries in the Arab region covered by a 2022 survey reported having a microfinance strategy. However, the global trend of developing separate microfinance strategies has been declining.^[35]

A. Underserved segments

A key purpose of a national financial inclusion strategy is to address the unique financial needs and barriers faced by underserved segments of society. It is thus part of a strategy’s framework or objective to specify target groups, which usually vary. Countries in the Arab region with a national financial inclusion strategy have listed women and MSMEs as target groups. Other target groups identified within national financial inclusion strategies vary depending on a country’s context and may include persons with disabilities, young people, those living in poverty, older persons, migrants, rural populations, the unemployed and the informal sector. This section examines how policies in the Arab region have addressed three groups: women, persons with disabilities and MSMEs.

Women have been listed as a key target group in financial inclusion policies in the Arab region. While such policies identify women as beneficiaries in the overall objective or vision, gender is not consistently mainstreamed in all pillars and actions. Attention to women is more prominent in data classification and literacy initiatives.

• The commitment of Egypt to the financial inclusion of women is evident in its national financial inclusion strategy as well as other policies, such as its Vision 2030 and the National Strategy for the Empowerment of Egyptian Women 2030, which calls for gender equality in financial services and improved access to funds for women-led SMEs.
• Jordan formulated specific key performance indicators to track the financial inclusion of women through the increased size of loans, credit, savings and account ownership. According to ESCWA in 2023, only 8 per cent of loans in the 2015–2020 period were given to women. During the same period, only 7.5 per cent of SMEs that received a loan were women-led.^[36] Strategic measures to achieve set targets include the diversification of lending products targeting women (example in box 8).
• The State of Palestine developed a gender roadmap to enhance financial inclusion for women. This roadmap analyses the barriers contributing to the financial exclusion of women, including specific challenges faced by highly educated women. It also identifies focus areas and action points for product and service design, capacity-building, training and legal reforms. Notably, it recommends involving community researchers in the National Financial Inclusion Committee to provide insights and ensure that the needs of marginalized groups are addressed.
• Morocco capitalized on its national financial inclusion strategy as an entry point to devise an initiative for the economic empowerment of rural women. The Central Bank conducted a diagnostic study in collaboration with local actors to identify the barriers faced by rural women in Morocco and corresponding action points. Examples of action points include improving access to affordable financial services that are adapted to the needs and living conditions of rural women and leveraging technology to bring financial services closer to home.

To reflect the needs of persons with disabilities, national financial inclusion strategies should focus on access, usage and quality of service based on type of disability and should push for the collection of data by type of disability.^[37] In the Arab region, most national financial inclusion strategies do not explicitly focus on persons with disabilities. Instead, they address financial inclusivity in general, which is assumed to indirectly improve accessibility for persons with disabilities (box 9). Egypt , Mauritania and Morocco have specifically included persons with disabilities in their strategies’ target groups. Mauritania, for example, emphasizes promoting equitable access to financial services for persons with disabilities. It encourages financial institutions to adapt services to accommodate the specific needs of persons with disabilities, aligning with recent government efforts to improve disability rights.

To attend to the specific needs of persons with disabilities, Egypt, Jordan, Morocco and the State of Palestine issued standalone guidelines describing actions and processes to be implemented by banks to facilitate access to products and services:

• The Central Bank of Egypt issued a circular on facilitating access to banking services for persons with disabilities.
• The Central Bank of Jordan published instructions on financial consumer protection for customers with disabilities.
• Bank Al Maghrib issued the Banking Sector’s Charter for persons with disabilities developed jointly with the Moroccan Banks Association.
• The Palestinian Monetary Authority published instructions on the appropriateness of banks buildings and services to meet the needs of persons with disabilities.

These guidelines include articles on identifying clients with disabilities, delivering fair, equal and transparent services, simplifying processes, providing information in different formats such as Braille and audio recordings, accepting different types of customer certification methods (other than a written signature), offering exemptions or reductions to some fees, and implementing assistive technologies to improve access and service delivery. They also include recommendations for improving physical accessibility at bank branches according to different types of disability, such as accessibility screens and counters and ATMs of lower heights. The guidelines also emphasize capacity-building of personnel at financial institutions, including in sign language. Training of staff should address the unique needs of persons with disabilities, focusing on empathy and technical skills.

The impacts of implementing these guidelines in financial institutions and whether they have helped improve financial inclusion are yet to be assessed. Engaging national and regional organizations that represent persons with disabilities is crucial in ensuring effective implementation and assessing impact. Assessment also depends on the availability of disability-disaggregated data; improvements in the availability of disability statistics are crucial for measuring impact and developing evidencebased policymaking.

All countries in the Arab region with a national financial inclusion strategy have identified MSMEs as a key target group,^[38] recognizing their important role in contributing to employment and economic growth. Research suggests that improving the access of SMEs to formal financing leads to an increase of 1.3 percentage points in their annual employment growth and 2.3 percentage points in labour productivity growth.^[39] To improve access, a holistic approach is needed that builds on overarching economic development and includes regulatory reform, improved business environment (which would also address informality), improved competition, access to credit information, and leveraging technology. Such an approach should also consider the diverse sources of financing available to MSMEs, including banks, microfinance institutions, capital markets and private equity, as well as funding sources resulting from technological advancements, such as crowdfunding and lending platforms. In practical terms, financial institutions are formulating strategies for improved MSME lending that cover financial and non-financial services (examples in chapter 3).

Financial inclusion strategies in the Arab region acknowledge that review or reform of regulatory frameworks is required to enhance financial inclusion for MSMEs. Common policy trends across Egypt, Jordan, Mauritania, Morocco, the State of Palestine and Tunisia include plans for specialized credit lines for rural MSMEs or those in high-growth sectors (such as tourism and technology), simplified bank account opening procedures, loans at reduced rates, setting a threshold for the percentage of credit awarded to MSMEs,^[40] de-risking or risk sharing (for example through government-backed guarantees), introducing flexibility in payment of loans, and expanding the reach of microfinance. Such measures must be coupled with financial literacy programmes, which are emphasized by all countries in the Arab region with a national financial inclusion strategy. Financial literacy programmes are tailored to different groups, including MSMEs, with some delivered specifically to women-led MSMEs.

In countries where informality in MSMEs is high, the scope of the national financial inclusion strategy covers both informal and formal businesses and is considered a vehicle to encourage transformation from the former to the latter. Research has shown that improved access to finance can help in the formalization of informal MSMEs.^[41] To tap into the potential of financial inclusion in reducing informality, Jordan is measuring the gap in account ownership between informal micro enterprises (13.5 per cent have current accounts) and formal ones (43.7 per cent), which is a significant 30.2 percentage points. Mauritania includes the informal sector in its national financial inclusion strategy as one of the stakeholders in building a financial inclusion environment.

Jordan, Morocco and the State of Palestine are establishing or improving credit bureaus to provide scoring and risk assessments, which is expected to enhance the financial inclusion of SMEs, especially in cases with high collateral requirements.^[42]

B. Levers for financial inclusion

Financial inclusion levers include tools and mechanisms that improve access to financial products and services, including financial literacy, financial technology, partnerships and coordination, and distribution networks. The section below analyses selected trends in financial literacy and financial technology as the most instrumental levers.

Financial literacy programmes are primarily driven by governments, particularly central banks, in collaboration with public entities, donors, training institutes and banks. Low financial literacy has been identified as a significant barrier to financial inclusion, hindering the use of financial products and services and increasing the risk of irresponsible use.^[43] While not explicitly mentioned in the 2030 Agenda, financial literacy aligns closely with SDG 4 as a key component of skill development, lifelong learning and economic empowerment. The ESCWA Financial Inclusiveness Index also highlights the importance of financial literacy programmes for improving financial inclusion.^[44] Research targeting individuals in the region without an account at a financial institution revealed that, should they open an account, less than 40 per cent would be able to use it without help. The share varies notably among countries in the region, ranging from 58 per cent in Morocco to 27 per cent in Yemen, signalling the financial literacy gaps that need to be addressed (figure 11).

Countries in the Arab region that have developed national financial inclusion strategies emphasize financial literacy as a cross-cutting lever for improving overall financial inclusion, particularly for women, through tailored educational programmes on financial products and financial management, which serve to encourage saving and budgeting. Financial literacy programmes are delivered in person as well as through online courses.^[45] In Morocco, the Moroccan Foundation for Financial Education, which includes private and public members, was established by the Central Bank. Its training programmes target young people, women, SMEs and rural populations. In 2022, more than 27,000 individuals directly benefited from training activities aimed at entrepreneurs, artisans and farmers.^[46] Most countries in the region measure the outcomes of financial literacy programmes through participation rates and local assessments, which may not necessarily reflect their impact. Jordan, however, uses the Toolkit for Measuring Financial Literacy and Financial Inclusion (developed by the Organisation for Economic Co-operation and Development International Network on Financial Education) to assess knowledge on topics such as interest, inflation, savings diversification and insurance. The national financial inclusion strategy of Jordan aims to increase the financial literacy score from 58 to 62 per cent by 2028.

Tracking financial inclusion data by gender is a common trend. Sex disaggregated data are essential for understanding the barriers specific to women and refining action to bridge the gender gap in financial inclusion. Egypt and Morocco, for example, have implemented genderdisaggregated financial databases to monitor progress in women’s financial inclusion over time.

Figure 11. Individuals who can use a financial account without help if opened, age 15+ years, by country and region, 2021 or most recent year with data (Percentage)

Source: World Bank Databank, 2024. Global Financial Inclusion. Accessed on 25 November 2024.
Notes: An asterisk (*) denotes data from 2022. The regional groupings in the figure exclude high-income countries.

Digital technologies can play an important role in accelerating the achievement of the SDGs. In addition to the explicit mention of technology in several SDGs, including SDG 17, technology is recognized as key to implementing the 2030 Agenda. Financial technologies, or fintech, are a lever for advancing the financial sector in general, and particularly for promoting financial inclusion (box 11). The growth of fintech is fuelled by benefits that go beyond mere convenience, with its implications affecting users, financial institutions and service providers. A notable advantage to users is accessibility, particularly allowing those in remote or rural areas to access services that otherwise require travelling to the nearest financial institution branch. Eliminating travel to collect cash implies cutting transportation expenses and improving safety by avoiding travelling with cash. Other benefits include improved security, better control of personal funds and privacy of transactions, particularly for women.^[47]

In measuring global financial inclusion, the World Bank identified different types of digital payments, paid or received, through mobile phones, the Internet or at merchants, to measure the growth of fintech. In the Arab region, the percentage of adults making or receiving a digital payment in 2021 stood at 36 per cent, lower than the 67 per cent global average and lower than all other regions. This proportion, however, grew from 24 per cent in 2014, at a rate of 12.2 percentage points, which is faster than the rate of account ownership growth (10.9 percentage points). Jordan and Saudi Arabia saw the largest jump in digital payments between 2014 and 2021 at 23 percentage points. The trend of digital payment growth outpacing account ownership growth is similar globally and in all other regions (figure 12).

In addition to emphasizing the importance of fintech in financial inclusion strategies, Governments are leading by example, as demonstrated by Egypt. The Central Bank of Egypt enacted legislation to facilitate government-to-person and person-to-government payments, especially through mobile applications.^[48] To receive payments, such as salaries or pensions, recipients must open a bank account. Once a payment is received, the recipient is encouraged to conduct further transactions digitally, rather than withdrawing the amount in cash, thus paving the way for broader adoption of financial services. This type of intervention has shifted payments from cash to digital methods, significantly enhancing financial inclusion, particularly for women. Thirty one per cent of mobile wallet owners were women by the end of 2023.^[49]

Fintech surpasses all other technology sectors in the Arab region in terms of venture capital received, which exceeded $1.2 billion in 2023, followed by e-commerce ($502 million) and healthcare ($87 million). It is a sector that has garnered the support of Governments through legislation and support mechanisms. Bahrain, Egypt, Jordan, Qatar, Saudi Arabia, Tunisia and the United Arab Emirates have established fintech bays or hubs offering incubation services, mentorship, training and funding.^[50] Fintech regulatory sandboxes, established in Bahrain, Egypt, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, Tunisia and the United Arab Emirates^[51],^[52] allow experimentation with technology and business models, foster collaboration among stakeholders, and support the entrepreneurship ecosystem to keep up with technological development.^[53]

Figure 12. Adult account ownership and digital payments made or received between 2014 and 2021 (Percentage)

Source: World Bank DataBank, 2024. Global Financial Inclusion. Accessed on 30 November 2024.

While government policies and regulations provide the essential framework for financial inclusion, financial institutions play a pivotal role in its implementation. This chapter examines the contributions of financial institutions in the Arab region to promoting financial inclusion, particularly for women, persons with disabilities and MSMEs.

By analysing publicly available reports issued by the 30 largest banks in the region,^[54] primarily from high-income countries and a few middle-income economies, this chapter highlights the specific initiatives and impacts of these institutions in expanding access to financial services, developing targeted innovative products, adopting inclusive practices, and promoting financial literacy.

A. Enhancing access to digital and traditional financial services

Of the 30 largest banks in the region that issued a publicly available report addressing sustainability issues between 2021 and 2024, two thirds highlighted efforts to promote financial inclusion through digital solutions, such as mobile banking apps, online accounts and digital wallets, expanding access beyond traditional banking networks. For example:

• In Jordan, the Arab Bank launched ArabiNext, a mobile application designed to empower SMEs with digital financial tools. This platform offers instant payment solutions for local transfers, bills and salaries, facilitating financial transactions and boosting SME growth.^[55]
• In Qatar, the Qatar Islamic Bank launched the Lite App, a simplified mobile banking application designed to break down language barriers and cater to low-income earners. Available in eight languages, the Lite App empowers users with instant payments, simplified transfers and competitive pricing, fostering financial inclusion for diverse communities.^[56]
• In the United Arab Emirates, the Abu Dhabi Commercial Bank’s Hayyak digital onboarding application has expanded access to financial services for low-income individuals. The number of no-cost retail checking accounts provided to previously unbanked or underbanked customers through this app grew from 75,020 in 2020 to 280,000 in 2023.^[57]

B. Expanding traditional financial services

Half of the banks highlighted efforts to increase access to traditional banking networks, such as establishing branches or ATMs in underserved areas, deploying mobile banking units, or establishing dedicated branches for specific underserved groups. For instance:

• In Saudi Arabia, the Saudi National Bank establishes branches and ATMs not only in densely populated and affluent areas but also in underserved communities. In 2023, the bank operated 43 branches and 101 ATMs in low-populated and economically disadvantaged areas.^[58]
• Also in Saudi Arabia, Riyadh Bank operates 45 branches dedicated to MSMEs, providing specialized financial services and support for this segment. In 2023, the bank launched the Riyad Bank Centre for SMEs and a new standalone centre in Al Khobar.^[59]
• In Egypt, the National Bank of Kuwait – Egypt, a subsidiary of the National Bank of Kuwait, is updating its ATMs to be accessible to persons with disabilities. Following requirements established by the Central Bank of Egypt, customers can sign by stamp or fingerprint.^[60]

C. Developing inclusive financial products

While the majority of banks report making efforts to increase access to financial services, fewer banks highlight efforts to develop inclusive financial products. This involves tailoring credit, savings plans and insurance offerings to the specific needs of underserved segments, such as by reducing fees, lowering minimum balance requirements, and creating innovative products specifically designed for women, persons with disabilities and MSMEs. The following examples illustrate how some banks in the region are adapting their product offerings to better serve the needs of diverse customer segments and promote financial inclusion.

• In Morocco, Attijariwafa Bank has launched products and services adapted to SMEs, including microcredit solutions for microentrepreneurs and small farmers, dedicated advisory services for very small and mediumsized enterprises, and a new credit scoring model for SMEs. In 2023, the bank granted more than 42,000 loans to very small and medium-sized enterprises.^[61]
• In Oman, Bank Muscat promotes inclusivity by offering special considerations for customers with disabilities, including reduced interest rates on loans, discounted processing fees and waived prepayment charges.^[62]
• In Egypt, the Hayat programme developed by QNB offers a comprehensive suite of financial products and services tailored to women’s needs, including the Laky Package, free insurance coverage against breast cancer, flexible loan repayment options during maternity leave, safe deposit box rental, and access to personal and professional development opportunities.^[63]

D. Fostering financial literacy

Several banks in the region are actively promoting financial literacy through various initiatives, often in collaboration with Governments and non-profit organizations. These efforts target diverse segments, including young people, women and MSMEs. Examples include:

• In Kuwait, Ahli United Bank is a leading contributor to the Deraya Campaign, a joint financial literacy initiative led by the Central Bank of Kuwait, the Kuwait Bank Association and other stakeholders. The campaign aims to enhance financial awareness, protect customers’ rights, and combat financial fraud.^[64],^[65]
• In Qatar, QNB emphasizes financial education for young people. Initiatives like the Future Assets programme, conducted in partnership with the Qatar Finance and Business Academy, aim to broaden high school students’ and graduates’ understanding of the financial sector. In addition, QNB delivered financial literacy sessions to over 59,000 unbanked and underbanked individuals in 2023.^[66]
• In the United Arab Emirates, Emirates NBD provides comprehensive financial literacy training to underserved groups, including young people, low-income individuals and migrant workers. The bank also organizes campaigns and training workshops to enhance financial awareness among customers and the wider public, providing guidance on saving, spending, borrowing, and investing.^[67]

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Endnotes

[1] The most recent General Assembly resolution on financial inclusion for sustainable development is A/RES/78/139.
[2] Regulators include central banks and financial regulatory authorities.
[3] Financial institutions include banks, microfinance institutions and other formal financial service providers, such as post offices.
[4] The World Bank categorizes countries based on their gross national income (GNI) per capita, calculated using the World Bank Atlas method. For the 2025 fiscal year, low-income countries are those with a GNI per capita of \$1,145 or less in 2023; middle-income countries are those with a GNI per capita between \$1,146 and \$14,005; and high-income countries are those with a GNI per capita exceeding \$14,005. In the Arab region, 6 countries are classified as high-income for the 2025 fiscal year (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates); 12 as middle-income (Algeria, the Comoros, Djibouti, Egypt, Iraq, Jordan, Lebanon, Libya, Mauritania, Morocco, the State of Palestine and Tunisia); and 4 as low-income (Somalia, the Sudan, the Syrian Arab Republic and Yemen).
[5] Iraq, Lebanon, Libya, the State of Palestine, Somalia, the Sudan, the Syrian Arab Republic and Yemen.
[6] UN Women, 2016.
[7] ESCWA calculations based on the Global Index Database and the United Nations Population Data Portal.
[8] The ESCWA Financial Inclusiveness Index is composed of three subindixes (access, usage and enabling factors) across two dimensions (traditional and digital finance). The index covers 49 indicators, including supply-side data collected from financial service providers, demand-side data from financial service users, and data on digital inclusion and technology. For more information on the index, please consult the ESCWA Index Simulator for Policymakers.
[9] The average per capita GDP (purchasing power parity, 2017 international dollars) of the 16 Arab region countries in the sample, weighted by population, was $21,964 in 2023, compared to $23,309 in East Asia and the Pacific, $18,870 in Latin America and the Caribbean, $8,909 in South Asia and $4,667 in sub-Saharan Africa. Source: ESCWA calculations based on the IMF World Economic Outlook Database and the United Nations Population Data Portal.
[10] Data for low-income countries were not available.
[11] The enabling factors subindex measures the conditions that facilitate access to and usage of financial services by individuals and businesses, such as disposable income, affordability, trust, access to required documentation, electricity access, digital literacy, cybersecurity and regulatory quality.
[12] The access subindex measures the availability and accessibility of both traditional and digital financial services, as well as the ease of access to these services.
[13] The usage subindex evaluates how extensively the population utilizes financial services.
[14] Data for the Comoros and Djibouti were not available.
[15] Iraq, Lebanon, Libya and the State of Palestine.
[16] Somalia, the Sudan, the Syrian Arab Republic and Yemen.
[17] These figures do not reflect the significant progress in account ownership recorded in Egypt from 2020 to 2024.
[18] Somalia National Bureau of Statistics, 2024.
[19] Central Bank of Jordan, 2023.
[20] Federal Deposit Insurance Corporation, 2023.
[21] United Nations Department of Economic and Social Affairs, 2018.
[22] Ibid.
[23] United Nations, 2021.
[24] Somalia National Bureau of Statistics, 2024.
[25] ESCWA, 2018.
[26] Central Bank of Egypt, 2024.
[27] Hassan, 2024.
[28] United Nations Department of Economic and Social Affairs, 2018.
[29] Deutsche Gesellschaft für Internationale Zusammenarbeit, 2023.
[30] Ibid.
[31] Alliance for Financial Inclusion, 2022.
[32] Central Bank of Iraq, 2024; Alliance for Financial Inclusion, 2018, 2023a, 2023b.
[33] Melecky and Podpiera, 2020.
[34] International Finance Corporation, 2014.
[35] World Bank, 2023.
[36] ESCWA, 2023.
[37] Alliance for Financial Inclusion, 2023d.
[38] Some strategies include microenterprises, thus MSMEs.
[39] International Monetary Fund, 2019.
[40] The Central Bank of Egypt instructed banks to allocate 25 per cent of their credit facilities portfolio to SMEs by the end of 2024. GCC countries have taken similar measures within their strategic plans specifying a target threshold for the percentage of loans allocated to SMEs, such as Bahrain (20 per cent by 2025), Oman (5.5 per cent by 2025) and Saudi Arabia (11 per cent by 2025).
[41] International Labour Organization, 2016.
[42] Ndoye and Barajas, 2022.
[43] Alliance for Financial Inclusion, 2022.
[44] For more recommendations from the ESCWA Financial Inclusiveness Index, please visit the Index Simulator for Policymakers.
[45] For more information, visit online financial literacy pages for Egypt, Jordan, Morocco, the State of Palestine and Tunisia.
[46] Bank Al Maghrib, 2022.
[47] Demirgüç-Kunt and others, 2022.
[48] Alliance for Financial Inclusion, 2023e.
[49] Central Bank of Egypt, 2023.
[50] Strategy&, 2022.
[51] The Fintech Times, 2021.
[52] World Bank, 2020a.
[53] ESCWA, 2024.
[54] Measured by tier 1 capital in 2024, as compiled by The Banker (2024).
[55] Arab Bank, 2023.
[56] Qatar Islamic Bank, 2023.
[57] Abu Dhabi Commercial Bank, 2023.
[58] Saudi National Bank, 2023.
[59] Riyadh Bank, 2023.
[60] National Bank of Kuwait, 2023.
[61] Attijariwafa Bank, 2023.
[62] Bank Muscat, 2023.
[63] QNB, 2023.
[64] Ahli United Bank, 2022.
[65] Central Bank of Kuwait, 2024.
[66] QNB, 2023.
[67] Emirates NBD, 2023.