The Capital Market Authority and the Palestine Monetary Authority announced today the results of the financial inclusion reassessment in Palestine during a ceremony held in the Ramallah and Al-Bireh Governorate. The event was attended by Dr. Feras Milhem, the Governor of the Palestine Monetary Authority, Dr. Nabil Kassis, the Chairman of the Board of Directors of the Capital Market Authority, Mr. Eliki Boletawa, a representative from the Alliance for Financial Inclusion (AFI), as well as leaders from the banking, financial, and economic sectors, along with representatives from various civil society organizations.
The Governor of the Palestine Monetary Authority extended his heartfelt thanks to the partners and attendees, with special gratitude to the strategic partners at the Alliance for Financial Inclusion (AFI) for their continuous support and funding for the implementation of the reassessment study. He also expressed gratitude to the German Agency for International Cooperation (GIZ) for funding this event and various financial awareness and education activities. Furthermore, he recognized the Palestine Economic Policy Research Institute (MAS) and the Palestinian Central Bureau of Statistics for their substantial efforts in conducting the comprehensive survey of both supply and demand aspects, as well as studying the financial inclusion ecosystem and enabling environment.
The Governor of the Palestine Monetary Authority stated that today marks significant progress in the journey to enhance financial inclusion in Palestine as part of the implementation of the National Financial Inclusion Strategy (2018-2025). This progress has been achieved through joint leadership between the Palestine Monetary Authority and the Capital Market Authority, in collaboration with key stakeholders from both the public and private sectors, as well as civil society institutions.
He further noted that in 2022, a field survey was conducted to reassess the levels of financial inclusion in Palestine. The objective of this survey was to measure the developments and the impact resulting from the implementation of the National Financial Inclusion Strategy. It aimed to identify any necessary adjustments that should be made based on the assessment results for the remaining period until 2025.
Dr. Feras Milhem discussed the results of the study, which showed that despite the challenging circumstances during the implementation of the National Financial Inclusion Strategy (2018-2022), there has been significant progress in the three pillars of financial inclusion: access, usage, and quality. The study also demonstrated that previous efforts were not in vain; they not only met the previously set objectives but also exceeded them.
In terms of access and usage of financial services, there has been remarkable improvement compared to the assessment conducted in 2016. The results indicated that the financial inclusion rate has now reached 50.9%, compared to 36.4% in 2016. When considering the ownership of electronic wallets, which were not present previously, the rate rises to 54.2%. It is worth noting that the target set in the strategy and the access plan was a minimum of 50% by the end of 2025.
Additionally, the results revealed tangible progress in the financial literacy level of Palestinian citizens compared to 2016. The percentage of citizens with at least a medium level of financial literacy increased from 41.3% in 2016 to 53.3% in 2022.
Dr. Feras Milhem highlighted the significant and rapid developments taking place worldwide in the context of rapid technological advancement, an unprecedented revolution in financial technologies and innovations, which have substantially altered traditional banking patterns and methods. These changes have brought about profound transformations in the landscape of financial services and economic activities in general. They have also posed fundamental challenges to economic policy-makers.
He emphasized that the Palestine Monetary Authority is committed to monitoring the developments in financial technology, harnessing its potential, and enabling it at the national level while maintaining a balance between risks and protecting consumer rights. The focus is on gaining a deeper understanding of individuals’ financial behavior, enhancing the quality of financial services, and providing new services that meet citizens’ needs, all contributing to strengthening financial stability and economic growth despite the various challenges and obstacles.
In his statement, His Excellency Dr. Nabil Qassis, Chairman of the Board of the Capital Market Authority, pointed to the progress made in financial inclusion in terms of access and usage of various financial services compared to what it was when the National Financial Inclusion Strategy was launched. He added that due to the developments in financial inclusion, the multiple practical experiences at both regional and international levels, the accumulated local expertise, and the repercussions of the COVID-19 pandemic, there is now a deeper understanding of the reality of financial inclusion and the evolution of its measurement tools. This coincides with the development and use of financial technology in the financial sector, which has brought about changes in financial inclusion data. Therefore, relying on a single measure of financial inclusion is no longer sufficient; there is a need to introduce other measures that cover all related aspects. This has been done in Palestine since 2019, where additional metrics for financial inclusion were developed and adopted based on supply-side data, covering the three main dimensions of financial inclusion: access, usage, and quality. These metrics have been calculated annually since 2019. It is important to note that the results of these indicators support the findings of the financial inclusion reassessment conducted in 2022, particularly in terms of access and usage.
Dr. Kassis emphasized that one of the most important objectives of the reassessment project is to identify the key determinants that hinder the promotion of financial inclusion in Palestine. The assessment data indicated that the economic factor was among the prominent determinants in Palestine, which is expected given the economic challenges faced by the Palestinian economy and its impact on individuals’ financial situations. He stressed that this aspect should be taken into consideration when adjusting policies and necessary interventions in the near future. Financial inclusion is not a goal in itself but rather an important and essential factor contributing to stability, economic growth, and the enhancement of social and economic well-being for individuals and households.
He also confirmed that the National Committee has worked on outlining the broad policy directions to be taken in the upcoming period, and specialized teams are working on modifying and developing the action plan for imminent approval, taking into account the results of the financial inclusion assessment.
As for the representative of the Alliance for Financial Inclusion (AFI), Mr. Eliki Boletawa, he commended Palestine’s efforts in promoting financial inclusion, particularly in enhancing financial inclusion for women and youth. He also highlighted the achievement of the Palestine Monetary Authority in receiving the award -The Global Youth Financial Award 2022- among the member countries of the Alliance for Financial Inclusion.
The event included a presentation of the key survey results, a session to discuss the main recommendations and findings of the survey and studies, and an opportunity to address inquiries.
