THE ARAB MONETARY FUND RELEASES THE ANNUAL REPORT FOR 2020 ON "ACHIEVEMENTS OF THE FINANCIAL INCLUSION INITIATIVE FOR THE ARAB REGION UNTIL THE END OF 2019"

Well !! i am going to share with you 2 articles on financial inclusion, and the importance it also means for iraq.

I am simply giving my opinion on this subject, and I am not inclined to comment on every post that I am going to publish to you on the forum !!!

So before making changes on the currencies, Iraq must finish voting the reforms requested by the UN, and even by the people, and also finish training on the human side, and financial inclusion in banks, as added. ATMs for example in the country.

Or act like the rest of us with our payment cards, and let's not forget that they are 40 years behind us !!!

Have a lovely day everybody !!!


Claud (Moose)



THE ARAB MONETARY FUND RELEASES THE ANNUAL REPORT FOR 2020 ON "ACHIEVEMENTS OF THE FINANCIAL INCLUSION INITIATIVE FOR THE ARAB REGION UNTIL THE END OF 2019"
2020-08-25




















 

 

 

 

 

 

 

 

 

 

 

THE ARAB MONETARY FUND ISSUES A GLOSSARY OF PAYMENT AND SETTLEMENT SYSTEMS TERMS IN COOPERATION WITH THE ARAB COMMITTEE FOR PAYMENT AND SETTLEMENT SYSTEMS




2020-08-26


















 

[size=40]Financial inclusion[/size]
Financial inclusion is a key factor in reducing poverty and promoting prosperity.








Financial inclusion defines the possibility for individuals and businesses to access at lower cost a whole range of useful financial products and services adapted to their needs (transactions, payments, savings, credit and insurance) offered by providers reliable and responsible.
Accessing a current account is the first step towards full financial inclusion, paving the way for depositing money, as well as sending and receiving payments. As a current account can also serve as a springboard to other financial services, the World Bank Group is working to ensure that every adult has access to it, everywhere in the world, through its initiative for universal access to financial services at home. horizon 2020.
Access to financial products and services makes everyday life easier and helps households and businesses to anticipate the financing of long-term objectives or to deal with unforeseen events. An individual with a current account will be more inclined to use other financial services, such as credit or insurance, to start a business or develop his activity, to invest in education or health, to manage risks and overcome financial shocks, all of which will improve their standard of living overall.

• Financial inclusion is now a priority for policymakers, regulatory bodies and development organizations around the world.
  
  
• Access to financial services is considered a factor of progress for seven of the 17  Sustainable Development Goals .
  
  
• The G20 is committed to fostering financial inclusion worldwide (a) and reaffirmed its commitment to implement the High Level Principles on Digital Financial Inclusion .
  
  

Since 2010, more than 55 countries have made commitments to financial inclusion and more than 30 have already launched a national strategy to this effect or are in the design phase. World Bank Group research shows that the pace of reform accelerates and its impact increases when a country adopts a national strategy for financial inclusion.
The most advanced countries in this area have put in place a favorable regulatory and political environment and have fostered competition, leaving banking and non-banking organizations the possibility of innovating and developing access to financial services. But creating such a space for innovation and competition must go hand in hand with the adoption of appropriate measures and regulations to protect consumers and ensure responsible provision of financial services.
Financial technology, or “fintech”, and in particular the commoditization of mobile telephony around the world, has made it easier to expand access to financial services for hard-to-reach populations and businesses, at a lower cost and for one. minimal risk:

• with digital IDs it has never been easier to open an account;
  
  
• thanks to electronic payments, the number of people with a checking account is growing;
  
  
• mobile telephony offers practical solutions for accessing financial services, even in isolated areas;
  
  
• the increased collection of customer information allows suppliers to design dematerialized financial products better suited to unbanked people.
  
  

All countries that strive to accelerate financial inclusion face similar obstacles that hamper their progress. This is particularly the case for:

• ensure that hard-to-reach populations, such as women and the rural poor, have access to financial services;
  
  
• strengthen the knowledge of the financial sector among citizens so that they are able to understand the offer;
  
  
• check that each individual has valid identification documents and a cheap and accessible means to have them authenticated;
  
  
• design useful and relevant financial products, tailored to consumers' needs;
  
  
• introduce solid consumer protection frameworks and adapt regulatory and supervisory authorities, in particular by exploiting new technologies (“regtech”);
  
  
• generalize the possession of an identity document, a precious sesame, but still insufficiently widespread in the world, to open a bank account and access capital and credits.
  
  

https://www.banquemondiale.org/fr/topic/financialinclusion/overview

[size=40]Microfinance, more necessary than ever in Iraq[/size]


JANUARY 21, 2016













How to promote economic development in areas of the Arab world that are fragile and in conflict? The Consultative Group to Help the Poor (CGAP) presents different solutions in a recent series of posts on financial inclusion in crisis (a). These insights underscore that despite the conflict, violence and uncertainty that hamper development, a solid financial infrastructure can help small borrowers weather a crisis - that is, improve their economic resilience.
 
This is particularly the case today in Iraq, where the government is trying to implement important political reforms while continuing to fight against the Islamic State (IS) group. Microfinance, in its broadest sense (credit, savings, payments and insurance intended for low-income households and small businesses), thus becomes the form of intervention that can support local economic activity and allow the population to face the economic setbacks (shocks) it is undergoing due to the country's difficult situation.
 
In 2014, according to a Findex study, only 11% of adult Iraqis had an account at a formal financial institution . Iraq thus ranks second among the least financialized countries in the Middle East, and significantly below the average of 70% of adults with incomes in the upper middle bracket and at least one of whom part of the financial assets is placed in accounts.
 
In addition, this study highlights a considerable gap between Iraqis who have access to formal loans (4%) and those who have to resort to informal borrowing mechanisms (65%). The demand for credit is therefore probably much more substantial than that which the country's formal financial sector can meet. In its 2011 analysis of the financial sector (a),the World Bank also describes a markedly underdeveloped financial system  : In Iraq, domestic credit to the private sector totals 6.2% of GDP, lower than in all other countries in the region except Yemen.
 
In Iraq, even before the conflict with ISIS began in mid-2014, microfinance was emerging as a credible source of funding for nearly 100,000 low-income local entrepreneurs. This branch admittedly held a tiny percentage (0.25%) of the assets of the Iraqi banking sector, with an outstanding amount of 175 billion Iraqi dinars (about 150 million dollars), but it already had 12 microfinance institutions (MFIs) operating in the 18 provinces of the country.
 
Recently, however, four of the MFIs in Iraqi territory controlled by ISIS have stopped granting loans. This resulted in a 15% contraction of the local microfinance market, which represented more than 20,000 active clients, $ 22 million in outstanding loans and 42,000 job opportunities. This is what emerges from the assessment of the economic and social impact of the Syrian conflict and the Islamic State in Iraq and Syria in Iraqi Kurdistan (a), carried out by the World Bank.
 
Nonetheless, MFIs still operational in Iraq indicate that the demand for credit and financial services remains strong there, especially as clients seek strategies that allow them to meet their needs, generate income and continue to consume as a result. even as economic activity declines and investors face an uncertain environment. Liquidity problems and shortcomings in bank lending make this situation even worse.
 
Historical development of microfinance



Microfinance could play a larger role in addressing Iraq's current funding gap, but several operational and regulatory factors are hampering its growth and expansion. A recent World Bank / CGAP (a) report which analyzes this branch sets out the main legal and regulatory obstacles.
 
All Iraqi MFIs are non-governmental organizations (NGOs), that is, they operate on the basis of donations which, since September 2012, have virtually dried up. In addition, their NGO status prevents them from raising capital or accepting deposits and, given the difficulty of finding local or international donors at an affordable cost, credit is drying up, threatening the sustainability of the economy. some MFIs.
 
More broadly, the crisis in Iraq exacerbates the institutional shortcomings of some of the MFIs , which also report an increase in the number of default and fraud cases, reflecting governance and risk management issues. The proportion of non-performing loans for more than 30 days is on the rise: according to estimates, it now reaches 6-7% in this branch, even if it remains below 2% in the best performing MFIs. This is a remarkable achievement in view of the extremely worrying Iraqi context echoed by the international press.
 
In order to overcome this impasse and allow the recovery of MFIs, immediate technical assistance is necessary. It will help MFIs establish internal controls, as well as a lending methodology, and access their clients in conflict zones. And for microfinance to reach its full potential in Iraq, a regulatory and legal framework is also needed that will ensure its long-term growth and sustainability.
 
To achieve this, we must rethink the public management of MFIs:
 

• Currently, MFIs come under the administration services responsible for NGOs, which do not have sufficient technical knowledge to properly supervise this branch. This monitoring and supervision could be entrusted to the Iraqi central bank, which has the requisite expertise in financial services.
  
  

 

• It needs to be more clearly defined how an NGO could transfer its assets to become a finance company, which would enable it to attract capital and offer a wider range of products.
  
  

 

• Finally, there is a need to establish a level playing field for all, so that MFIs such as small business finance companies and microenterprises can provide small loans. Despite a 2010 ordinance authorizing non-bank financial institutions to provide commercial loans, no such institution has been established to date.
  
  

                        
It is more important than ever to strengthen support for microfinance in Iraq . In this regard, the recent interest of the country's central bank in financial inclusion and small businesses is to be welcomed. It could be the start of a long-awaited change, not only for microfinance actors, but also for the vast number of Iraqis who still do not have full access to formal financial services.









https://blogs.worldbank.org/fr/arabvoices/microfinance-needed-iraq-more-urgently-now-ever