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A national strategy for financial inclusion

Nov 12,2015 - Last updated at Nov 12,2015

Financial inclusion is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those services are not available or affordable.

The term “financial inclusion” has gained importance since the early 2000s, a result of findings about financial exclusion and its direct correlation to unemployment and poverty.

An estimated 2.5 billion working-age adults globally have no access to the types of formal financial services delivered by regulated financial institutions.

For example, 57 per cent of adult citizens in the Middle East and North Africa (Arab countries) or up to 180 million Arab citizens do not have access to formal financial services or do not have bank accounts or credit accounts.

The United Nations defines the goals of financial inclusion as follows: access at a reasonable cost for all households to a full range of financial services, including savings or deposit services, payment and transfer services, credit and insurance; sound and safe institutions governed by clear regulation and industry performance standards; financial and institutional sustainability, to ensure continuity and certainty of investment; and competition to ensure choice and affordability for clients.

In Jordan, data indicates that about 74 per cent of citizens do not have bank accounts.

If one takes into account those who have more than a bank account, on the one hand, and if data is limited on those who are 15 years and more, the proportion of those who have no bank accounts in Jordan will be reduced to an average close to that of the MENA region, of 57 per cent, which is high in comparison to that in the advanced world.

As a result, the Central Bank of Jordan launched on November 10, during a conference organised in cooperation with the Arab Monetary Fund and the German Foundation for International Cooperation, the outline of a strategy that will cover five main themes: deployment of financial literacy among school students and the various segments of society, especially in poor and remote areas; improvement of the access of small- and medium-size, and micro enterprises to the different financial tools and services; the development of electronic payment systems; women’s access to various means of financing; the protection of consumers of financial services.

It should be noted that financial inclusion has become a fundamental pillar and a pressing need in view of its role in improving the standard of living, empowering women, in the promotion of equal opportunities, poverty reduction and securing the well-being, thus achieving sustainable economic growth, and reducing unemployment and poverty rates.

World Bank data indicates that countries that have national strategies for financial inclusion were able to increase the financial inclusion of the various segments of society significantly.

It also suggests that the increase in the access of adult segments of society to loans for business purposes was associated with a decline in the unemployment rate.

Many governments and regulators in the region began to adopt financial inclusion strategies, and Jordan is at the forefront of the countries that adopted a national strategy for financial inclusion through an initiative adopted by the Central Bank of Jordan with the participation of leading strategic partners, including the Association of Banks, the Ministry of Finance and the Ministry of Labour.


The author is the director general of the Association of Banks in Jordan. He contributed this article to The Jordan Times.

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