Arab central banks, monetary authorities champion financial inclusion

Marion Steward

The issue of enhancing access to finance and financial services in the Arab countries is receiving growing attention from the Council of Arab Central Banks and Monetary Authorities’ Governors, in recognition of the potential and significant opportunities that can be achieved by increasing financial inclusion to support inclusive and sustainable economic development, address unemployment challenges and achieve equality.

There is no doubt that the repercussions and challenges for the financial and banking sector during the recovery phase from Covid-19 crisis clearly highlight the pressing need to enhance sustainable finance and the social responsibility of financial and banking institutions to serve sustainable development.

In this context, the application of environmental, social and governance standards issued by the United Nations is receiving increasing attention from the international community and regional and international financial institutions.

Arab central banks realise the importance of promoting social and environmental responsibilities, as they seek to develop frameworks that help in adopting and implementing these standards by financial and banking institutions operating in their respective jurisdictions.

The Arab Monetary Fund is also intensifying its efforts in publishing several studies, reports and guidelines to contribute to addressing priority issues, especially in terms of boosting sustainable finance and social responsibility in the Arab region.

Considering this, the Council of Arab Central Banks and Monetary Authorities’ Governors observed the ‘Arab Day for Financial Inclusion’, which is held on April 27 of each year. For the events of 2022, it was held under the overarching theme of: “Importance of the Social Responsibility of Financial and Banking Institutions in Increasing Financial Inclusion”.

In this context, it is worth emphasising the importance of adopting a strategy of social responsibility that aims at pursuing additional development and empowerment of community members in the Arab region, and supporting the financial and banking sector to strengthen the impact of social responsibility on financial inclusion, in addition to using appropriate tools and mechanisms to verify the inclusion of social and environmental responsibility in the strategies and policies of financial institutions, and verifying the progress of indicators in this regard and highlight them in the periodic reports drawn up by these institutions.

Arab central banks and monetary authorities are keen to support the efforts of the international community in increasing sustainable finance and financial inclusion. In the foreground comes the support for the implementation of the sustainable development goals issued by the United Nations and their close relationship to the issues of social and environmental responsibility, and the support for the efforts of the Group of Twenty (G20), which has adopted the pillar of financial inclusion as one of the main pillars to support the sustainable development goals and enhance financial stability. The G20 pays special attention to supporting the access of youth, women, and micro, small and medium enterprises (MSMEs) to financial services, and to grow awareness and community financial literacy that enhance the success of efforts and policies in this regard.

Given the increasing importance of the issues of promoting social and environmental responsibility in financial services, the Council appreciates the activities included in the “Financial Inclusion for the Arab Region Initiative” (FIARI), that focus on the social responsibility of financial and banking institutions in increasing financial inclusion in 2022, and the attention that the partner institutions in the FIARI pay to enhance the awareness of social responsibility of financial and banking institutions and apply the fundamentals of sustainable finance, and build consumer confidence in the social responsibility of financial and banking institutions.

The procedures and measures taken by the monetary and financial authorities in the Arab countries to advance the social and environmental responsibility of the financial and banking institutions should be commended to promote the transition towards sustainable finance, based on considering the environmental risks resulting from climate change when formulating financial and monetary objectives.

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https://www.zawya.com/en/business/banking-and-insurance/arab-central-banks-monetary-authorities-champion-financial-inclusion-xdrp8csm

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