Middle East banks fail to offer access to finance

  • Share via facebook
  • Tweet this
  • Bookmark and Share
Robert Zoellick, president of the World Bank. MENA banks must do more to offer ordinary people access to financing

Robert Zoellick, president of the World Bank. MENA banks must do more to offer ordinary people access to financing

Middle East and North African banks must do more to offer ordinary people and smaller businesses in the region broad, reliable and equal access to financing, the World Bank said on Thursday.

"Financial systems across the Middle East and North Africa (MENA) proved resilient during the global financial crisis and subsequent political shocks," the report, titled "Financial Access and Stability: A Roadmap for the Middle East and North Africa", concludes.

But the report, compiled in consultation with member countries and Arab banks, says financial institutions fail to provide access to finance, contributing to relatively weak growth performance and inability to generate jobs.

"Large segments of the population and the enterprise sector - especially small and medium enterprises - remain deprived from finance due to the limited access to bank lending and other financial services, as well as the lack of suitable alternatives to bank finance," it says.

It says MENA financial sectors are dominated by large, well-capitalised banks, but they are undiversified and uncompetitive, lacking in many cases insurance companies, mutual and pension funds, leasing, and factoring.

"Equity markets are large in many countries, but mainly dominated by financial institutions and infrastructure companies. Private fixed-income instruments and markets remain negligible," it says.

The region includes Gulf Arab states whose oil and gas reserves and small populations, make them some of the wealthiest countries in the world.

But governments throughout the region, rich or poor, dynasties or republics, tend to dominate economic life, leaving large sectors of the population marginalised.

Access to loans for housing has been problematic for Arabs in poor Egypt and wealthy Saudi Arabia.

"We see large numbers of university graduates who don't have access to opportunities and jobs; we see young couples who can't get married because the housing finance market is almost non-existent," Loic Chiquier, Director of Finance at the World Bank, said in a statement.

"All this just increases the sense of economic exclusion and political discontent," he said.

A popular uprising that ousted Tunisian ruler Zine Abidine Ben Ali in January set off a chain of protest movements that have claimed so far Hosni Mubarak in Egypt and Muammar Gaddafi in Libya.

Protesters rose against political repression, corruption and narrow cliques who benefited from economic policies that failed to create jobs and backed up the rulers in return.

Yemeni President Ali Abdullah Saleh and Syrian leader Bashar al-Assad both face continuing unrest against them.

Egypt and Tunisia have been in talks with international financial institutions as well as Western and Gulf Arab governments on financing to help them get through post-uprising economic troubles.

Arab central bank governors meeting in Qatar on Thursday said they would tell upcoming World Bank and IMF meetings that countries hit by unrest need more support.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: Honest man

Banks are set up to suck the blood out of the society literally and they don't pretend to be anything other than what they are. The only way they would do anything is if they going to profit from it. So please World Bank and IMF stop pretending that you are the good guys and tell your employers, the US and Europe to stop accepting the black money that these leaders are exporting from Africa and other places. That alone can solve every single problem that the poor people that you pretend to care have. It is a fact look it up. Mr World Bank would you do that?

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Events that moved the markets

Events that moved the markets

What, if anything, have we learnt from past crises that have...

A country on hold: Oman's next step?

A country on hold: Oman's next step?

The Gulf state has been relatively stable under the rule of one...

Saudi king keeps close hand on oil in remodelling strategic team

Saudi king keeps close hand on oil in remodelling strategic team

King is clearly laying the ground for a generational shift in...

Most Discussed
  • 12
    Has Narendra Modi already lost the plot?

    Modi was quiet all along and did not utter a word regarding the attacks on minorities and their institutions. It took Obama's address to him to atleast... more

    Saturday, 28 March 2015 2:25 AM - Ali
  • 11
    Nakheel PR: The toughest job in Dubai?

    On service charges.

    We were overcharged for years by Nakheel so that those loans could be paid back.

    The dramatic cuts have come to nothing... more

    Friday, 27 March 2015 7:32 PM - Pondersome George
  • 6
    Drunk passenger who slapped air stewardess jailed in Dubai

    Its high time airlines ban alcoholic drinks on board or limit it to just one drink. There are many passengers who love the free alcohol and keep drinking... more

    Saturday, 28 March 2015 2:25 AM - Azk