Financial

Inclusion
WELCOME

March 19, 2019

Elias Aad, Vice President
Country’s Challenges

High ‘unbanked’ Large size of

population shadow economy

Low levels of Cash dominancy

financial literacy (>90%)

Elevation of
Growing pop. vs.

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residents’
shrinking budgets
expectations

2
The magnitude of the challenge

71%
of people live on less
160Bn
From Donors go into
than $10/day development/ technology
investments

53% 17%

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Countries have increasing
growth of income Of people in the
inequality world are
underemployed

3
Financial Access

Account at a Formal Financial Institution (age 151), By Region Loans at a Formal Financial Institution (age 151), by Region

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4
Financial Usage

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Savings vs. Formal Account Ownership (age 151), by Region Loans vs. Formal Loans (age 151), by Region

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Country’s Opportunities

Young Public Private

population Partnerships

High digital High mobile

literacy & adoption penetration

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Multi-digital Access to
channels Data

6
Why financial Benefits of financial inclusion and adoption of
inclusion electronic payments accrue at multiple levels:

FRAUD AND CORRUPTION COST OF CASH

For LEAKAGE
governments
Macro and the SHADOW TAX EVASION ECONOMIC
economy ECONOMY GROWTH

Meso For REDUCE COST OF INCREASE IN EFFICIENCY AND

DISBURSEMENT PRODUCTIVITY TRANSPARENCY
businesses
and LONG TERM LIFT LOCAL INNOVATION
communities: WELFARE ECONOMIC AND INCREASED
UPLIFTMENT ACTIVITY EMPLOYMENT

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REDUCE INCREASED
Micro DIGNITY
EMBEZZELMENT ECONOMIC
For OPPORTUNITY
individuals: SAFETY AND CONTROL AND IMPROVE STANDARD
SECURITY CONVINIENCE OF LIVING

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The 3 Major Targets of Financial Inclusion

Individuals Businesses Governments

2Bn adults >200M businesses Most financial
globally do not in emerging inflows and
have bank markets do not outflows are in
accounts have bank cash (or other non-
accounts electronic form)

$$$ $$$ $$

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8
Financial Inclusion Equation

Digitize Spend by Consumers, SME & Govt

Convert Convert
Cash Unbanked

Access to Formal Financial Services

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Key Success Factors for Financial Inclusion

Development vs. Existing Cash

Consumerism 6 1 Ecosystem

Cross-Functional
Financial Solution vs.
5 2
Alignment
Inclusion Product

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Digital & Physical 4 3 Non-Traditional
Convergence Partners

10
Case Studies

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DECEMBER 13, 2018 MEA FINANCIAL INCLUSION WORKSHOP 11

UAE: ADVANCING FINANCIAL INCLUSION
with Mastercard Prepaid Payroll Solutions
CONTEXT:
• 7.3 Million immigrant workers out of a
total population of 9.3MM
• 90% of the labor force comes from India,
Pakistan and Bangladesh
• Minimal wage transparency led to the
centralized Wages Payment System
initiated by the Ministry of Labor
CASE STUDY PAYROLL UAE KEY RESULTS
OUTCOME:
• Over 1.8 MM cardholders on the program
SOLUTION:
• Streamlining payment issuance
• Mastercard with its partners National
processes for over 4000 companies in the
Bank of Abu Dhabi (NBAD),
UAE
UAEXchange & C3 Payroll launched a
target payroll offering targeted at • Since the launch of the program in 2011,
immigrant workers in the UAE financial inclusion (measured by the
world bank) in the UAE has risen from
• Solution features included one-time
60% in 2011 to 84% in 2014
free ATM access & connecting to the
HomeSend remittance gateway to
send money home
• Offered a safe and secure way for
consumers to save, transact and send
money to family
©2017 Mastercard. Proprietary and Confidential.
• Engagement with company mangers
and accounting teams to educate
workers about the features and
mechanism of using the card
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 CASE STUDY PAYROLL EGYPT KEY RESULTS
EGYPT: ADVANCING FINANCIAL INCLUSION
with Mastercard Prepaid Payroll Solutions
SOLUTION:
CHALLENGES: • Mastercard worked in partnership with
the Central Bank of Egypt to introduce
• To catalyze change, initiated a program to provide
a prepaid card program, which would
government employees with a safer and more
enable MoF to distribute funds in a
convenient method of receiving their wages.
timely manner.
• Payroll was distributed primarily in cash from the
• Additional key partners were the public
government, but some entities had private label
State banks: National Bank of Egypt,
cards issued by a state owned entity owned by the
Banque Misr, and Banque du Caire.
Ministry of Finance (MoF) for ATM cash
BACKGROUND: withdrawals.
• In 2008, the Central Bank of
OUTCOME:
• In many instances, Egyptian workers would not be
Egypt (CBE) and the Ministry paid immediately or on time, and usually had to wait • Today, more than 4.6 million cards
Of Finance (MoF) began in line for several hours before getting their cash have been issued to government
seeking ways to promote disbursement. employees in Egypt

©2017 Mastercard. Proprietary and Confidential.

financial inclusion in Egypt. • Enabled the CBE and the MOF to
• Managing disbursement of regular and recurring
• Only 10% of the population government payments to over six million deliver on their objectives of financial
of nearly 90 million had a government employees was very costly, time inclusion and reduction of cash
banking relationship. consuming, and posed a challenge to keep clear and payments and management costs
concise records. • Allowed customer banks to reach an
untapped consumer base
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