Financial Inclusion in Iraq: A Comparative Analysis with Other Arab Countries

Introduction

Financial inclusion is a critical aspect of economic development, enabling individuals to access basic financial services and participate in the economy. However, many countries struggle to achieve high levels of financial inclusion, including Iraq. This article presents an analysis of financial account ownership, borrowing from official financial institutions, and bill payments through official financial institution accounts in Iraq compared to other Arab countries.

Financial Account Ownership

The data from the Global Findex Database 2017 reveals that only 20% of adults in Iraq have an account with a financial institution. This percentage is significantly lower than many other Arab countries:

UAE: 87%
Bahrain: 83%
Kuwait: 80%
Saudi Arabia: 72%
Libya: 66%
Lebanon: 45%
Algeria: 43%
Tunisia: 37%
Egypt: 32%
Morocco: 28%
Palestine: 25%

Borrowing from Official Financial Institutions

The data also shows that only 3% of adults in Iraq have borrowed from official financial institutions, a significantly lower percentage than many other Arab countries:

UAE: 19%
Jordan: 17%
Kuwait: 16%
Saudi Arabia: 11%
Morocco: 9%
Tunisia: 5%
Palestine: 2%

Bill Payments through Official Financial Institution Accounts

In Iraq, only 5% of adults pay bills using an official financial institution account. This percentage is significantly lower than many other Arab countries:

Saudi Arabia: 32%
Bahrain: 22%
UAE: 28%

Conclusion

The data highlights the low levels of financial inclusion in Iraq, particularly in terms of financial account ownership, borrowing from official financial institutions, and bill payments. The disparities between Iraq and other Arab countries are significant, indicating challenges in accessing formal financial channels and increasing the likelihood of financial exclusion. Addressing these issues is crucial for promoting economic development and reducing poverty in Iraq.