THE ARAB MONETARY FUND ISSUES A STUDY ON “BANKING COMPETITION AND FINANCIAL INCLUSION”

THE ARAB MONETARY FUND ISSUES A STUDY ON “BANKING COMPETITION AND FINANCIAL INCLUSION”



2020-06-08

• Banking markets in the countries included in the questionnaire are considered monopolistic competition markets, as is usual in the banking market, whether based on market structure indicators or market behavior indicators, which means that there are a few banks competing with each other to win a larger market share.
  
  
  
  
• The reforms adopted in the Arab countries contributed to the further opening of the banking sector and its attraction to many local and foreign investors, and the presence of Shariah-compliant banks alongside traditional banks, which helped to increase levels of diversification of the structure of the banking sector.
  
  
  
  
• Arab countries with the most diversification levels in the structure of the banking sector, measured by the proportion of the largest representation of private and foreign banks, and Shariah-compliant banks, recorded greater levels of individuals and projects' access to financing, led by Bahrain, Saudi Arabia and Kuwait.
  
  
  
  
• Arab countries with lower levels of banking concentration (higher levels of banking competition) recorded greater levels of financial inclusion, led by Bahrain, which recorded the highest level of banking competition and the highest level of financial inclusion for individuals and projects, reaching 82.6% and 25.2%, respectively, according to data Arab Monetary Fund Questionnaire.
  
  
  
  
• The relationship between banking competition and financial inclusion depends on a number of determinants, where both the evolution of banking infrastructure and the availability and depth of credit information systems have played, and business environments play a role in strengthening the relationship between banking competition and financial inclusion in Bahrain, Saudi Arabia, Kuwait and Lebanon.
  
  
  
  

• The supervisory authorities in the Arab countries focus on adopting policies to increase levels of banking competition, so that these policies are one of the main pillars included in financial inclusion strategies.
  
  
  
  
• Eliminate restrictions on the practice of banking business by foreign investors and the private sector, and privatize losing public banks to reduce levels of banking dominance and expand the provision of more financial services more efficiently.
  
  
  
  
• Adopting regulatory and supervisory requirements aimed at urging banks to increase levels of diversification of banking services, and ensuring fair pricing for banking services to reduce the negative effects of reduced banking competition on financial inclusion.
  
  
  
  
• Providing a nurturing environment to encourage modern financial technology companies, which is one of the most important current trends to increase levels of banking competition and financial inclusion.
  
  
  
  
• Strengthening efforts in the Arab countries to support banking competition and financial inclusion by developing payment systems, credit inquiries, secured lending, movable asset records and bankruptcy systems.
  
  
  
  
• Requiring financial service providers to adopt measures to ensure the interoperability of the systems, whether at the level of the banking sector or at the level of financial services providers from outside the sector to deepen the banking contribution and increase levels of financial inclusion, especially digital financial inclusion.
  
  

 

GOALS AND MEANS













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[*]Correcting the imbalance in the Member States' balance of payments
[*]Work to remove restrictions on current payments between member states
[*]Establishing policies and methods for Arab monetary cooperation
[*]Provide advice, upon request, in relation to foreign investment policies
[*]Development of Arab financial markets
[*]Work to create conditions conducive to creating a unified Arab currency
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[*]Providing short and medium term facilities to member states to help finance the total deficit in their balance of payments
[*]Coordination of monetary policies of member states and the development of cooperation between the monetary authorities in these countries
[*]Liberalization and development of trade exchanges and current and related payments, and encouraging the movement of capital between member states
[*]The Fund allocates enough of its resources paid in the currencies of the member states to provide the necessary credit facilities to settle the current payments between member states in accordance with the rules and regulations approved by the Board of Governors and within the framework of a special account opened by the fund for this purpose.
[*]Managing any funds pledged to it by a Member State or Member States for the benefit of other parties
[*]Holding periodic consultations with member states on their economic conditions and the policies that they pursue in a manner that helps achieve the goals of the fund and the countries concerned
[*]Carrying out the necessary studies to achieve the fund's goals
[*]Providing technical assistance to the monetary and banking systems in the member countries
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[*]Reducing restrictions on current payments between member states, as well as restrictions on the movement of capital and its returns between them, with the aim of eliminating the restrictions mentioned altogether
[*]Working to achieve the necessary amount of coordination between the policies, especially the financial and monetary ones, in a way that serves Arab economic integration and helps create conditions for the creation of a unified Arab currency.
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 Agreement establishing the Arab Monetary Fund









https://www.amf.org.ae/ar/aboutamf