A new report by the UN Economic and Social Commission for Western Asia (UNESCWA) reveals a troubling reality. In the Arab region, 64% of adults remain unbanked. This is the highest rate of financial exclusion in the world. It far surpasses the 24% global average.
The report warns that such widespread exclusion from the formal financial system poses a threat to the Arab region’s ability to reduce poverty. It also affects the region’s capacity to support entrepreneurship. Furthermore, this exclusion hinders efforts to meet Sustainable Development Goals (SDGs) by 2030.
“The Arab region cannot afford to treat financial services as a luxury,” said Mario Jales, lead author of the report. “Without inclusive finance, we cannot hope to lift people out of poverty, support small businesses, or achieve equitable growth.”
EGYPT’S BANKING BOOM: A REGIONAL MODEL
Despite regional struggles, Egypt stands out as a rare success story. Between 2016 and 2024, the number of Egyptians with a bank account tripled from 17.1 million to over 51 million.
- The number of Egyptian women with accounts increased by 260%, though gender gaps remain.
- 22% of Egypt’s ATMs now feature accessibility enhancements like Braille keyboards and brighter lighting, broadening reach to the disabled community.
This growth was largely driven by a comprehensive national financial inclusion strategy. The strategy actively targeted underserved communities. It also supported infrastructure upgrades.
DEEP DISPARITIES PERSIST ACROSS THE ARAB REGION
UNESCWA’s report outlines stark inequalities:
- Women: Only 29% have an account.
- Persons with disabilities: A mere 21% are financially included.
- Rural residents, youth, and the elderly also report significantly lower inclusion rates.
The report refers to this as “a digital divide within the divide,” highlighting how marginalized groups are disproportionately excluded from financial services.
ACCESS TO CREDIT: A BARRIER TO ECONOMIC ACTIVITY
The report emphasizes that low access to loans for small and medium-sized enterprises (SMEs) is stifling innovation and entrepreneurship across the region. Without adequate financing, the potential for job creation and income generation is severely limited.
LESSONS FROM REGIONAL INITIATIVES
While Egypt leads the way, other Arab countries have implemented promising models:
- Jordan launched a Microfund for Women, which now operates 60 branches and serves 133,000 borrowers, 95% of whom are women.
- Private banks across the region have begun to:
- Lower minimum deposit thresholds
- Offer financial literacy classes
- Tailor services for low-income and underserved populations
INCOME-LEVEL DIVIDE: A REGIONAL BREAKDOWN
- Low-income Arab countries: 81% of adults unbanked
- Middle-income countries: 67% unbanked
- High-income countries: 23% unbanked
This variation points to resource gaps, but also policy and infrastructure challenges that must be addressed at a regional level.
PATH FORWARD: POLITICAL WILL AND HOLISTIC POLICY ACTION
The UNESCWA report calls for:
- National policymaking focused on underserved communities
- Private sector initiatives to reduce barriers to access
- Expansion of financial literacy programs
- Whole-of-society approaches that include rural, disabled, and gender-marginalized populations
“The path forward exists,” the report states, “but it requires political will, targeted investment, and a whole-of-society approach.”
KEY FIGURES:
- 51 million Egyptians now hold bank accounts (up from 17.1 million in 2016)
- 64% of adults in the Arab region are unbanked
- 29% of women in the Arab world are financially included
- Jordan’s Microfund serves 133,000 women borrowers
- 81% of adults in low-income Arab countries lack accounts