Financial Crime World

Mali’s Banking Sector Vulnerabilities Hinder Financial Inclusion Despite Progress

A recent report by the World Bank highlights the vulnerabilities in Mali’s banking sector, hindering financial inclusion efforts despite significant progress made in recent years.

Significant Progress in Mobile Phone Penetration and Digital Remittances

  • Mobile phone penetration has increased significantly in Mali, with 935 mobile money accounts per 1,000 adults in 2021.
  • Digital remittances have also boosted inclusion, with Malians formally receiving $987 million in international remittances in 2020.

Challenges Remain at Infrastructure, Regulatory, and Market Levels

Infrastructure Challenges

  • The government’s Public Treasury is yet to be connected to the regional switch, limiting public and private stakeholders’ ability to use the payment system.
  • Outdated regulations and a limited credit infrastructure also hinder financial inclusion efforts.

Regulatory Challenges

  • Gender gaps exist in financial services, with women accounting for only:
    • 18% of bank account owners
    • 4% of credit card holders
    • 14% of digital payment users
  • Only 22% of Malian Fintechs are woman-headed, highlighting the need for greater inclusivity.

Market Challenges

  • High costs of transactions and low literacy rates are additional barriers to digital financial services adoption.
  • Mali has no strategy to modernize revenue mobilization and government expenses, putting it behind its peers in the region.

Commitment to Increasing Access to Financial Inclusion

Mali is committed to increasing access to financial inclusion through the 2021-2026 National Financial Inclusion Strategy and supporting vulnerable groups with social payments delivered through digital accounts.

Recommendations for Improving Financial Inclusion

  • Improve financial and digital infrastructure
  • Update regulations to reflect technological changes
  • Adapt technology to local financial habits
  • Introduce digital financial services across sectors
  • Create a clear roadmap for digital payments to enhance financial inclusion and DFS adoption

Ongoing Projects and Initiatives

  • The World Bank’s PAFEEM project aims to accelerate access to transaction accounts for thousands of individuals and micro-small medium enterprises (MSMEs).
  • The Jigisemeyiri Project has already distributed cash transfers to 62,000 households suffering from food insecurity during the pandemic.