Web Chat: Financial Inclusion in MENA

January 16, 2013 3:30 PM to 4:00 PM EST

The end of 2011 was undeniably a momentous time across the Arab World with uprisings first emerging in Tunisia and Egypt and then spreading to Libya, Yemen, and Syria. Expectations of 2012 were high as old regimes were discarded and new governments brought with them hopes of more equitable societies and opportunities for all, including in particular the region’s large numbers of young people. New governments have been scrambling to enact reforms that will appease the hopes of the now vocal and restless street, while trying to create democracies in a region with limited experience in democratic processes. So to say the least, it has been a tumultuous year. But little by little there is progress across many fronts – political, economic and judicial. At the forefront of these reforms is the need for inclusive processes and outcomes, and financial inclusion is increasingly seen as part of the solution toward that end.

In a recent blog post, the CGAP regional team assessed financial inclusion progress made in 2012 in the Middle East and North Africa (MENA) and outlined their expectations for 2013. Michael Tarazi and Nadine Chehade continued the conversation around financial inclusion in the Arab World by taking your questions during a live web chat on January 16, 2013. The transcript of this chat follows.


Submitted by ines ben abdelkader on

how financial inclusion could be a part of the solution in MENA region and what are the challenges?

Submitted by Dhawal Pandey on

How can we approach to people in remote areas and how can we make aware them abt financial inclusion?

Submitted by Graziosi Ascanio on

Going through the report I noticed that it hasn’t been highlighted the following:
1. - The regulatory frameworks worked out by the central banks, not only in MENA Countries, have been inspired by the proposals on the matter worked out by a Consultative Group established within Basel III and tasked to prepare guidelines for regulating the microfinance industry: “Microfinance activities and the Core Principles for Effective Banking Supervision”, the ultimate goal of this document being the country financial inclusion. In my this should be mentioned.

1. - Saying that “financial inclusion is increasingly seen as part of the solution” toward political and economic progress without mentioning the damages produced by the explosive mixture politics & microfinance produced in the past is a big GAP. Sometime in 2005 I published on Microfinance and Politics, which then has been re-proposed by Zunia in 2010: http://zunia.org/node/187123

* What has produced the MFI failure in poverty alleviation? Two very dangerous results:

* (a) The escalating influence of Politics,

* (b) The devaluation of the concept of credit. 

* The effects of Politics are under everybody’s eyes: corruption, wrong use of resources, bad management, borrowers bad repayment behavior, etc.

* The result on above (b) is perhaps riskier on the grounds that it distorted credit’s major significance, namely confidence:

* if a lender assumes that everybody deserves a credit there is no more credit sanctioning but distribution of resources.

* the confusion, worse the mystification, because it has been confused the right of every citizen to have equal opportunity in his own community, which doesn’t mean an equal access to credit. The first task belongs to the government bodies, the latter to the lender who can’t be charged to do something that isn’t in his job descriptions. 

We do think that anytime we use the term “credit” and “finance” we have to respect the roots of the term; on the contrary, it will mean something else, if and when we want to call things by name. For more on this subject: “The rise and failure of microfinance”: http://www.microdinero.com
Ascanio Graziosi

Submitted by Dr.V.Rengarajan on

Financial inclusion be it in MENA or elsewhere some basic concerns ?
Does mere inclusion as an output enough for solving the poverty issue?After inclusion No body knows or wants to know the outcome and long term impact of hasty inclusion by whatever means and (tech )modes at household level. Who is accountable for drop outs mortality of groups and defunct accounts in SHG -MFI system after inclusion, ?
When micro credit alone could not do anything for the bottom -penurious class in poverty segment except over indebtedness , how could we reduce or eliminate poverty ? If inclusion helps for the poor in top layer in poverty pyramid, will it not lead to widening the inequality gap even in poverty sector? How to sequence the MF services ( credit plus) in inclusion process so that the penurious class also effectively included?
Dr Rengarajan

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