Under the Auspices of His Excellency President Mahmoud Abbas: Launching the National Financial Inclusion Strategy in Palestine
December 2, 2018
Under the Auspices of His Excellency President Mahmoud Abbas and participation of His Excellency Dr. Mohammad Mustafa – representing His Excellency the President – the Chairmanship of the National Financial Inclusion Strategy Committee in Palestine, represented by His Excellency Mr. Azzam Shawwa, the Governor of Palestine Monetary Authority, and His Excellency Dr. Nabeel Kassis, the Chairman of the Board of Directors of Palestine Capital Market Authority, the National Financial Inclusion Strategy (NFIS) in Palestine was launched today at the Culture Palace in Ramallah. The Representative of the German Government in Palestine Mrs. Hanna Ilge also participated in the event, which was held in cooperation with the Alliance for Financial Inclusion represented by the CEO of the Foundation His Excellency Dr. Alfred Hanning and the German Development Agency (GIZ) and attended by world and arab financial delegations, representatives of the financial sector - banking and non-banking, authorized lending institutions, diplomats, chambers of commerce, economists, scholars, and representatives of international organizations.
NFIS in Palestine aims to increase the rates of financial inclusion in the Palestinian state and achieve the Palestinian vision of a developed financial sector that meets the financial needs to enhance living conditions and social welfare of individuals and to increase financial inclusion rates for adult individuals from 36.4% to at least 50% by the end of 2025. NFIS also aims to promote access of all members of the society to financial services and to use them. The access shall be through appropriate official channels in accordance with the nature of the services and needs of the society at reasonable cost and time, and to enhance the society’s financial knowledge to take the right financial decision.
Dr. Mohammad Mustafa, representative of His Excellency the President in NFIS launching ceremony, and the President’s Economic Advisor, greeted the participants on behalf of the President of the State of Palestine Mahmoud Abbas. He said the launching of NFIS was among the national comprehensive efforts to create strong national economy that is capable of supporting the inevitable independent state. He added that higher national strategy would always be to struggle to obtain liberty and independence and building independent national economy as part of the national strategy.
Dr. Mohammad Mustafa said the Central Council of the Palestine Liberation Organization had taken a number of decisions including decision to economically disengage from the economy of the occupying state. We have always looked at the obstacles that face the implementation of the decision as challenges that must not stand in the way of our work and that we must face them as part of the national struggle for liberty and independence, according to Dr. Mustafa. He also asserted that there was consensus about the necessity to launch national program of economic transformation to ensure self-sufficiency. The achievement of the objectives of NFIS will largely contribute to realizing the key components of a national program of economic transformation. The components include promoting development process especially at targeted places including Jerusalem, Gaza Strip, and the Jordan Valley. And to maximize the benefits of public financial resources, that are limited in the first place, through real partnership program with the private sector in order to bridge the large investment gaps in the crucial sectors. Additionally, seek to develop the key infrastructure, financial technological system, and human resources for competitive national economy that is based on knowhow, innovation, and benefits from the energy of the young people. Dr. Mustafa said the most important objective of economic transformation is to ensure appropriate level of economic growth and provide jobs and improve living conditions of people and reduce unemployment and poverty rates. Though the financial system in Palestine has come a long way, we need to continue to work in order to realize what NFIS aspires for such as better indicators of financial inclusion and better use of the financial system to achieve the economic transformation that we seek, which is an ambitions but achievable objective when effort come together, said Dr. Mustafa.
His Excellency Mr. Azzam Shawwa welcomed in his opening remarks the representative of the President and the dignitaries and speakers and guests from Palestine and abroad. Mr. Shawwa especially thanked the partners in NFIS preparation and in the organizing of the event. Mr. Shawwa said launching NFIS was important since it was economically and socially significant and crucial project. Efforts of Palestine Monetary Authority and Palestine Capital Market Authority and partner organizations from the public and private sectors and civic society organizations came together throughout previous years to prepare NFIS. Despite the difficulties that we faced during the preparation of NFIS, the project would not have succeeded without the determination, willpower, consolidation of efforts, and the official support of the President of the State of Palestine and the Prime Minister. The efforts were crowned by the preparation of NFIS and its executive work plan. The preparation was in accordance with relevant international basis and standards; hence, NFIS was officially approved by the Council of Ministers at 2018, according to the Governor of Palestine Monetary Authority.
Mr. Shawwa said that the infrastructure of the financial system was modern and developed in line with international standards. The widespread and diversity of banking services registered good rates as well as the use of bank accounts by adults, which exceeded 63%. The legal environment and consumer rights protection are available. The efficiency and adequacy of banking services providers are very high, according to the Governor of Palestine Monetary Authority.
Mr. Shawwa also said that despite the fluctuation of the political and economic situations that Palestine went through, Palestine Monetary Authority managed in the past ten years to secure several achievements in favor of financial inclusion. The achievements include enhancing the efficiency and solvency of the banking system and its employees, launching several developed and competitive information systems such as BORAQ, National Switch System, IBAN code, credit classification, and returned checks. Measures and work procedures and legal environment were developed to meet the requirements of development in banking industry. Amidst developments, Palestine Monetary Authority launched several initiatives aiming to contribute to economic development including enabling small and medium and micro business, which constitute at least 95% of businesses in Palestine, to access credit providers. Palestine Monetary Authority also developed financial capacities and has organized the Children and Youth Money Week since 2011 and won two international awards for this activity in 2013 and 2017, And recently the launch of the Arab Day for Financial Inclusion under the umbrella of the Arab Monetary Fund, and very soon will achieve another new achievement of the Palestine Monetary Authority which is the launch of the electronic clearing system.
His Excellency Dr. Nabeel Kassis said that the launching of NFIS in Palestine was a starting point toward achieving the specific strategic objectives of NFIS through beginning actual implementation of the detailed work plan of NFIS in cooperation with all partners in accordance with the specified 8-year timeframe of the implementation of NFIS. Dr. Kassis also said that NFIS aimed to realize larger extent of social justice through the opportunities it provided to the disadvantaged members of the society to access financial services and utilize such services to improve their work and living conditions. Dr. Kassis added that the National Financial Inclusion Strategy Committee believed that promoting financial inclusion in Palestine would directly contribute to enhancing economic development, reduce unemployment, reduce poverty rates, and increase social welfare. These are the objectives of financial inclusion in Palestine that are in line with the National Policy Agenda.
His Excellency the Chairman of the Board of Directors of Palestine Capital Market Authority said that NFIS in Palestine is distinguished by covering the financial sector including its banking and non-banking components. The Palestine Capital Market Authority; in addition to joint leadership with Palestine Monetary Authority in implementing NFIS, and as a party in charge of monitoring and supervision the non-banking financial sector, would go ahead with its strategy that aimed to increase sectors’ activities to meet the needs of the target community groups in accordance with the requirement of enhancing financial inclusion, according to the Chairman of the Board of Directors of Palestine Capital Market Authority. Moreover, Palestine Capital Market Authority, in cooperation with partners, would increase confidence and awareness of the services and products delivered by the Palestinian insurance sector, develop insurance products that meet the needs of the business entrepreneurs and small and micro businesses, make policies and procedures that contribute to realizing the role of the insurance sector in economic development and social protection. Work would also continue with enhancing the role of the financial leasing sector to provide alternative financing to owners of small and medium businesses where such financing would be in line with their needs to start their productive businesses and with the type of financial leasing that would be based on benefiting from the assets through economic ownership as an alternative to legal ownership, which facilitates ensuring productive instruments and tools for the businesspeople.
The Representative of the German Government in Palestine Mrs Hanna Ilgesaid that financial inclusion was not an end per se; however, it was prerequisite to ensure achieving stability, growth, jobs, and income. Financial exclusion; on the other hand, leads to deprivation of the society and prevents benefiting from the socio-economic capabilities. It also puts families and businesses in difficult financial situations and makes the economy incapable and inefficient, which threaten economic stability. Mrs Hanna Ilge added that Palestine had decided to go ahead with financial inclusion in the Middle East and North Africa region for the benefit of the entire Palestinian society. Palestine’s efforts are strong that deserve congratulations. She pointed out that the German Government had worked throughout previous years with Palestinian institutions mainly Palestine Monetary Authority and Palestine Capital Market Authority because Germany considered financial inclusion powerful instrument to achieve stability, growth, and integrity while building institutions on strong foundations. Financial inclusion facilitates innovation. The Representative of the German Government said the challenges were huge and could not be solved through new laws and instructions. Mrs Ilge praised the work of Palestine Monetary Authority and Palestine Capital Market Authority for the preparation of the strategy and rigorous monitoring. Mrs Ilge wished Palestine Monetary Authority and Palestine Capital Market Authority success and affirmed continuation of German support in traditional ways or information technology and digitalization.
Executive Director of the Alliance for Financial Inclusion Dr. Alfred Hannig congratulated Palestine on launching National Financial Inclusion Strategy
aimed at inclusive economic growth and sustainable development.
Dr. Alfred Hannig said A:lliance for Financial Inclusion (AFI) is proud to have journeyed with Palestinian Monetary Authority in the development of its National Financial Inclusion Strategy (NFIS). AFI members from several countries provided a peer review when Palestine developed its first NFIS draft in 2017.
Dr. Alfred Hannig added After Jordan, Palestine is second to have launched the NFIS, since the ‘Financial Inclusion for the Arab Region Initiative’ (FIARI) was established by the Arab Monetary Fund (AMF), the GIZ, and the Alliance for Financial Inclusion (AFI) at the Global Policy Forum in Sharm el Sheikh in September 2017.
Dr. Hannig also said Two areas of key thematic focus areas in Palestine’s NFIS are Forcibly Displaced Persons (FDPs) and Women’s Financial Inclusion.
For Dr. Alfred Hannig, National strategies must consider the plight of internally displaced persons and refugees, who are predominantly financially excluded and forced to rely on unsecure and costly informal financial services. Not only will this contribute to inclusive economic growth and the preservation of human dignity, it also guards financial stability and integrity by mitigating the risks associated with an otherwise invisible economy.
NFIS launching event included two sessions; the first was about women and financial inclusion in Palestine. The session was chaired by Henriette Kolb, the Head of the Gender Secretariat at the International Finance Corporation (IFC). The second session was about the future steps and priorities of empowering micro and small businesses. The session was chaired by Mr. Hayder Al-Bagdadi, Policy and Grant Manager, Alliance for Financial Inclusion. Experts and banking and economic leaders attended the sessions and provided observations.
The event included playing the Financial Inclusion in Palestine documentary, launching the logo of NFIS, the website of the Financial Inclusion in Palestine, and an artistic show. The event was the focus of economic and media outlets.