To put the severity of the financial inclusion issue in wider context, an Arab is less likely to have a bank account than anyone else in the world, according to the Global Findex Data. Only 14 percent of adult Arabs have a bank account (24 percent male and 13 percent female). This compares to 24 percent of adult Sub-Saharan Africans and 32 percent of adult South Asians. Microfinance outreach – particularly relevant to low-income borrowers excluded from the formal economy – is the worst of any global region. Microfinance borrowers are estimated at between 2.5 to 3 million (within a region wide population of around 380 million). This compares with over 20 million micro finance borrowers in Bangladesh (with a population of 160 million).
Realizing the financial inclusion’s critical role in generating income, creating job opportunities, and helping vulnerable households manage economic shocks; the World Bank launched a project in September 2013 to Enhance Microfinance Amongst Women and Youth across Morocco, Tunisia, and Egypt (Watch project overview). The project, which was carried out in cooperation with the Center for Arab Women for Training and Research (CAWTAR), aimed at promoting inclusive finance in the MENA region, including enhancing microfinance access and usage amongst women and youth.
The $600,000 project was financed by MENA Multi-donor Trust Fund, which draws funds from Britain, Denmark, Finland, Norway and the World Bank Group. It worked across three main pillars, which includes producing high quality analytical tools, working directly with vulnerable women and youth, and promoting South-South learning on financial education and microfinance sector development. (Read Implementation Status & Results Report)
While today Tunisia has emerged from turmoil with a “democratic state”, it is still in transition and many of the “post-revolution” demands, including reducing unemployment, social and political inclusion, and the rising cost of living, have yet to be fulfilled.
As part of its efforts to produce high quality analytical tools, the MENA MDTF project helped produced (Tunisia financial inclusion snapshot , Tunisia Digital Finance Study and MENA financial education diagnostic in a bid to address knowledge gaps and to advance policy dialogue. The project brought together some 150 participants from Egypt, Morocco and Tunisia for a regional qualitative landscape study on financial behavior and constraints.
Over 1,000 women and youth in Tunisia, Morocco, and Egypt took part in three-day Financial Literacy Trainings, in which the participants learned debt management, financial negotiation, savings and budgeting. Some 80 of the participants were trained to become trainers, while E-learning modules, radio spots, and cartoons developed to ease the learning process and better serve the beneficiaries.
As a result of the financial literacy trainings, the financial inclusion (access to formal financial system) increased from 26 percent that was measured before the project to 32 percent. Some 25 percent of the beneficiaries already reported that they employing budgeting and financial negotiation to achieve objectives, while on average 25 percent of financial literacy participants reported increased volume and frequency of savings.
Finally, the project promoted South-South learning on financial education and microfinance sector development in an effort to mobilize high-level support amongst public authorities, such as Ministry of Finance and Central Bank, and to better coordinate amongst service providers, including NGOs, and foundations.