Financial inclusion means that people and businesses have access to a broad set of adequate and affordable formal financial products and services provided in a responsible way. Financial inclusion has three dimensions: access to, usage of and quality of financial services.

The positive impact of financial inclusion on growth, employment, and social well-being is broadly acknowledged.Greater access to appropriate financial services and client empowerment enables individuals to grow their businesses, send money to friends and family at low cost, build assets, save for the future, and manage risks, which helps them to improve their financial and occupational perspectives.

Financially inclusive markets comprise an enabling ecosystem and an efficient infrastructure that facilitates a broad set of market actors to deliver financial products safely, affordably and efficiently to empowered, well informed clients.

Why do we care about Financial Inclusion?


What Can Governments Do?

In order to achieve responsible and sustainable financial inclusion, governments can set rules for responsible financial inclusion, balancing a wider access to financial services with financial system stability aspects and the protection of customers.

Second, governments can promote infrastructure, either financially or by incentivizing private sector investments, to support the expansion of financial service providers. Such infrastructure might include payment systems, point-of-sale networks, or credit registries, for example.

Third, governments can support financial inclusion by driving transaction volume via electronic deposits of government-to-people payments (e.g. social payments, wages, or pension payments) into basic accounts.

They can furthermore promote financial awareness or financial education measures for the unbanked or underserved segments of the population to strengthen trust, to empower customers, and to increase absorption capacity and demand for formal finance.


What is Microfinance?

Microfinance is the provision of financial services to low-income people. It plays an important role in achieving greater financial inclusion. Initially the term related to microcredit but has evolved to include savings, insurance, payments, and remittances.

Microcredits are small loans to unsalaried borrowers with little or no collateral. These loans increase over time to ensure successful repayment or are lend to a group of people.  Microcredits often have higher interest rates than conventional bank loans, because small loans are more expensive to process than large ones.

Emerging technology and new business models enable MFIs and other financial service providers to reduce costs, allowing them to reach more people and meet the diverse needs of low-income people. For example, banks and MFIs increasingly use mobile money and agent networks to disburse and collect loans instead of sending staff to remote areas.


What is this project about?

In the MENA* region, only around 14 percent of adults have an account at a formal financial institution while this share is even lower for women (Global Findex, 2014).

The microfinance market in the MENA region is relatively young and does not yet fully meet the demand of the population. MFIs in the region mainly concentrate on loans. Microfinance laws and regulations that facilitate growth and safeguard responsible finance are just being put in place. An enabling environment and a strong financial infrastructure are needed to enable demand-oriented responsible finance for vulnerable groups and outreach especially in remote areas.

The GIZ programme for the “Promotion of the Microfinance Sector in the MENA Region” (MFMR) therefore aims to improve the framework conditions for broader access to adequate financial services for the low-income population.

The programme assists policy makers, regulators and supervisors in Egypt, Jordan and the Palestinian Territories in financial inclusion policy making and in strengthening the legal and regulatory framework for the microfinance sector. It promotes regional dialogue and knowledge exchange among peers.

On a regional basis the programme supports Sanabel, the Microfinance Network of Arab Countries, in the delivery of services for MFIs. It works together with the Arab Monetary Fund (AMF) in the provision of capacity building measures to financial regulators and supervisors in member countries of the region.

The programme is implemented by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Union. Its offices are in Cairo, Amman and Ramallah. It is being implemented from May 2011 to December 2018.

MFMR MENA Factsheet

MFMR Jordan Factsheet