On 28 April, more than 100 high level participants were on hand at the German Federal Ministry of Finance (BMF) Headquarters in Berlin to witness the birth of the ‘Deauville Partnership Action Plan for Financial Inclusion’. The plan represents the first step of a coordinated financial inclusion effort across the Middle East and North Africa (MENA) region.

The action plan was the end result of a day long conference hosted by BMF and the German Federal Ministry for Economic Cooperation and Development (BMZ), with strong support and collaboration from AFI. The conference was part of the G7 Deauville Partnership and focused on the unique challenges and opportunities for financial inclusion in MENA.

The ‘Deauville Partnership Action Plan for Financial Inclusion’ proposed an objective of supporting Egypt, Jordan, Libya, Morocco, Tunisia and Yemen in their comprehensive reform agenda of pursuing sustainable and inclusive economic growth. This objective received overwhelming support from the conference participants, high level policymakers and practitioners. The plan is also in-line with the German G7 Presidency priority of fostering sustainable and inclusive growth and job creation in the region through financial inclusion, financial literacy and responsible finance.

The opening session ‘Leveraging Digital Technology for Financial Inclusion’, moderated by AFI’s Senior Policy Advisor Mr. John Owens, featured policymakers from Egypt, Jordan and Yemen along with senior MENA regional representatives from Mastercard and Vodafone. The importance of engaging banks and non-bank institutions, promoting public-private dialogue, encouraging the development of interoperable platforms while enhancing the distribution channels, ensuring secured transactions and protecting customers’ privacy were highlighted as essential to the future of sustainable and successful financial inclusion.

Maintaining and broadening communication among and between all actors in the field was considered essential as Aymen Hussein, Head of Payment Systems & Business Technology Sector, Central Bank of Egypt was quick to highlight, “Communication with banks, telcos and the telco regulators is necessary to achieve the ultimate objective which is more inclusive financial services.”

During the ‘Strengthening the Ground for Responsible Finance’ panel participants heard from Governor Abdellatif Jouahri from Bank Al-Maghrib, Deputy Governor Muhammad Bin Ibrahim from Bank Negara Malaysia and Governor Jihad Al-Wazir from the Palestine Monetary Authority on their experiences with financial education, promoting consumer protection, setting up Credit Bureaus, collaborating with key stakeholders, promoting transparency and competition among market players as well as enforcing regulations. The crucial importance of having appropriate policy aiming at involving women was also highlighted.

The fight for financial inclusion must be accompanied by measures to ensure proper consumer protection and to promote the development of sound and balanced financial institutions-clients relationship. As stated by Governor Abdellatif Jouahri, “we have worked to bring about a culture of transparency and customer information including the display of banking conditions and their control, the production of understandable bank statements, the disclosure of annual commissions charged. Bank Al-Maghrib is also working to set up a banking mobility mechanism, under which banks commit to facilitate the transfer of accounts and related services from one bank to another”.

The session on ‘Advancing financial inclusion for SME in the MENA region’ provided insights from the Microfinance Regulatory Authority of Tunisia, the Arab Gulf Program for Development (AGFUND), OECD, IFC, the Kreditanstalt fur Wiederaufbau (KfW) and the Islamic Development Bank Group. The importance of considering hybrid products (compared to traditional bank and asset-based lending), moveable asset registry and sharia compliance products with appropriate regulations for the various needs of the SMEs was seen as a key to success in these areas.

‘Moving towards a collaboration framework’, was the closing session of the event and provided a space to reflect on the conference theme while consolidating previous discussion ideas. Moderated by AFI’s Executive Director, Mr. Alfred Hannig, the panel included representatives from the Islamic Financial Services Board (IFSB), the Republic of Turkey’s Undersecretary of Treasury, BMZ, the Central Bank of Jordan and the US Treasury. All the panelists agreed that smart financial inclusion can have a wide ranging positive impact across all sectors of society.

As noted by Ali Arslan, Director General at the Undersecretariat of the Treasury of Turkey, “We are talking not just about Financial Inclusion but Responsible Financial Inclusion for Social Inclusion. We need those for a peaceful country.”

The proposed Action Plan was discussed and enriched with inputs from all the participants as they looked towards the future of financial inclusion in the region. Conference participants suggested ways to strengthen the focus on inclusive growth in the Action Plan, explored how Islamic Finance can drive financial inclusion, and discussed the importance of non-financial support for SMEs. The role of AFI in assisting to take the process forward was also acknowledged. “It is inspiring to see so many dedicated policymakers and partners gathered here today with a common vision and strong focus” said Mr. Hannig. “The Deauville Partnership Action Plan for Financial Inclusion can make a world of difference for all the people of MENA.”

Ms. Christiane Bögemann-Hagedorn, Director for North Africa, Middle East, Southern Eastern Europe, and Latin America at BMZ encouraged policymakers in the region to nurture the Deauville Action Plan for Financial Inclusion and develop it further with appropriate implementation plans as a full part of their poverty reduction strategies.