Thursday 07 July 2022 - 8:43:36 pm

Financial inclusion covers 85% of adults in UAE: CBUAE survey

ABU DHABI, 10th June, 2020 (WAM) -- To achieve higher financial inclusion and as part of its strategic objectives, the Central Bank of the UAE, CBUAE, has conducted a survey of 5,134 resident individuals, aged 15 years and above across the seven Emirates in the UAE, including students and low and mid-income individuals.

The survey reveals that 85 percent of adults, aged 15 years and above, are users of at least one formal financial service, while 15 percent have no access to formal financial services, or in other words "financially excluded".

The survey aimed to gather inputs to enable the CBUAE to design and implement a comprehensive strategy to increase the degree of financial inclusion in the UAE.

The survey collected information from individuals on their access to formal financial services that are deemed essential enablers to improve their livelihood, such as access to bank account, access to formal credit, access to insurance services, and access and use of money transfer services (remittances).

Notwithstanding the relatively high degree of users of financial services (85 percent), the survey reveals important information regarding individuals’ access/usage, or lack, of formal financial services offered by financial institutions in the UAE.

Around 61 percent of the surveyed adults have bank account, which is less than the world average of 69 percent, according to the World Bank’s 2017 Global Findex Report. Among the 39 percent of the adults who responded to the survey and do not have bank account, 20 percent said they did not apply for a bank account, while 19 percent wanted to apply for a bank account but they did not meet the requirements, either because they are unemployed or have insufficient income.

When asked about access and usage of other formal financial services, the survey reveals that 29 percent of respondents had credit or borrowed money from formal financial institutions, 57 percent of respondents had insurance, and 69 percent made or received external transfers (remittances) to/from the UAE.

It is worth highlighting that 39 percent of unbanked adult respondents are users of remittances services offered by providers in the UAE. This is the reason why even though the percentage of banked adults are merely around 61 percent, the degree of financial inclusion in the UAE is still relatively high at 85 percent.

Policymakers around the world, including the Central Bank of the UAE, adopt financial inclusion as a means to improve the living standards of citizens, reduce poverty, and achieve progress in economic development.

WAM/MOHD AAMIR/Tariq alfaham