Rural and Agribusiness Finance: improving the lives of the rural poor
Financial inclusion refers to a state where individuals, including low-income people, and companies, including the smallest ones, have access to and make use of a full range of formal quality financial services (payments, transfers, savings, credit, and insurance) offered in a responsible and sustainable way by a variety of providers operating in a suitable legal and regulatory environment.
The financial inclusion cause has been embraced globally by central banks and international standard-setting bodies for its impact on any country’s economy: supporting economic growth through the development of the financial sector, improving the financial sector’s stability, or decreasing Anti-Money Laundering/Combating the Financing of Terrorism risks through higher formalization of the economy, are a few of the many tangible virtues of high financial inclusion rates. Organizations such as the G20, the United Nations, and the World Bank have thus committed to advance financial inclusion globally.
In the race toward full financial inclusion, the Arab world lags behind other regions. Low levels of financial inclusion in the region are the result of unserved demand. Detailed and accurate data are necessary to identify priorities and measure progress. Data will reflect progress only when actual change happens in the Arab markets. Public policies aiming at fostering financial inclusion and appropriate legal frameworks play a key role, and central banks are well-positioned to drive such policies. Central banks usually have both the mandate and the skill set that allow them to champion and coordinate the process toward effective national financial inclusion strategies, though they are not always in charge of all aspects related to financial inclusion.