It's time to give the MENA's youth enough credit
Every now and then, a cultural or intellectual event pops up in Amman that reminds you that the endearingly chaotic city is not just about the food, the people, or even that breath-taking history surrounding it. It’s probably one of those few cities left in the Middle East where you can witness, or take part, in a discussion on (well, almost) anything you want from religion to politics to fashion and, as the past two days have shown––on women and banking.
For the past two days, Amman has been host to a Women's World Banking conference entitled “Building Women-Focused Finance: The Global-Local Experience”, which brought together more than 250 microfinance practitioners, commercial banks, investors, donors, and regulators from more than 40 countries. The conference was held under the patronage of Her Majesty Queen Rania Al-Abdullah who even made the effort to be part of the audience at some point!
And as you can probably tell from the title of the conference, women’s financial inclusion was the main headline on the agenda and everyone’s minds. But perhaps one of the most valuable lessons to be taken from the conference on feminist aspirations in the banking sector, especially in the context of our region, is that there are no neat lines to be drawn between “women’s issues” and all the issues surrounding them. Maha Bahou from the Jordanian Central Bank cheerfully captured this lesson when she proclaimed, “Who needs a women bank when we have the planet? Don’t get me wrong, I’m a feminist and I love women, but I also love men”. What is to be taken from this light-hearted statement, and the conference in general, is that we can’t really have a genuine conversation about women’s prospects in the region without talking about the region’s economic challenges as a whole, ones that females, along with their male counterparts, face on a regular basis.
And, ironically, amidst all the talk on the disadvantages women face in the world and the Middle East in particular, a breakout session on youth financial inclusion brought an un-gendered challenge to the floor. The session, purposely or not, went on an important tangent that addresses the Middle East’s biggest threat and potential–– it’s youth bulge. The numbers as quoted by Ryan Newton, a Women's World Banking specialist, are as follows: only 12% of the MENA’s youth (aged 18-24) have accounts at formal financial institution, and only a dismal 2% actually have savings.
So why are the youth so uninterested in banks? One might say it’s because they have very little funds to deposit, let alone save. But, I would argue, that it’s because banks are not interested in them. Student loans have emerged as the norm to finance one’s education in Europe and the US, but Middle East’s banks have not developed financial products that bank on the region’s future exemplified in its youth.
The Middle East’s youth, despite stereotypes of being nothing but shisha inhaling Ferrari drivers, have proven themselves as one of the most important, if not the only force, capable of changing the the Middle East’s economic and social landscape. This makes their exclusion from the financial system detrimental to any genuine reform Middle Eastern governments wish to take in the face of the unemployment that has given them the free time and energy to facebook plot protests, revolutions, or riots (whatever rocks your boat). Healthy access to credit can potentially shield the youth from the very same economic frustrations that brought down them to the streets. Social inequality and an unequal playing field can translate into a generation’s worth of lost dreams, and sometimes a lack of finances is the only thing standing between the youth and their dreams.
And don’t get me wrong, not every dream is worth financing. When I say credit, I don’t mean the consumptions loans or credit cards that have been overly used in the GCC economies to bolster Eid vacations’ spending or buy new cars.The last time I checked, a UAE bank was willing to offer those willing to take out loans a free vacation. Given the ease at which credit is accessed and spent in those ‘highly liquid’ economies, it is a shame that banks are more willing to finance vacations instead of loans that are likely to generate value-added activity to the economy. Hence, by ‘healthy’ credit, I mean loans that finance true social mobility and allow ambitions to materialize, be they educational or entrepreneurial, white collar or blue collar.
In any case, there’s a huge regulatory role to be played by Central Banks to ensure that customers, regardless of the age group they belong to, don’t get sucked into debts they can’t repay. If anything, this an ideal chance for the region’s ever-growing Islamic banking sector to take interest in non-traditionally commercial opportunities and truly distinguish themselves from their ‘non-Islamic’ counterparts. It is a genuine opportunity for banks to play a role that governments in the MENA region have desperately been trying to play- creating job opportunities and equipping their youth for competitive private sector jobs. It's about time banks get on board.
All in all, credit or loans put in the right place, is exactly what fosters healthy financial behaviour. Evidence presented at the conference argues that credit given at a young age increases one’s ability to manage money, fosters confidence (especially in young girls), and promotes sound financial behaviour in the long run. Intuitively, borrowed money instils a higher sense of responsibility and motivation for success than any other free hand-out in the form of a parental or governmental transfer can foster.
As Lydiah Kiburu from Kenya Equity put it in one of the conference’s sessions, “the youth is a constituency that no player can afford to ignore if they are looking at sustainability going forward…yet, the youth have been largely unbanked in emerging markets”. And if the Arab Spring, or what is left of the Arab Spring, has taught us anything, it is that the youth is a constituency that no one can afford to ignore, banks and governments alike.
By: Mays Abdel Aziz
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