Financial Crime World

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Yemen’s Mobile Operators Suspend Services Amidst Civil Unrest

A report by BusinessWire (2020) and Smex (2020) reveals that Yemen’s mobile operators, including Yemen Mobile, Sabafon, MTN Yemen, Y Telecom, and Emergency Telecommunication Cluster, have suspended their services for around a month due to civil unrest. This suspension has limited access to banks, enterprises, and money exchange outlets, making it difficult for people to conduct daily transactions.

Financial Inclusion Challenges

Yemen’s banking sector faces numerous challenges, including:

  • A prolonged liquidity crisis
  • A deteriorating local currency exchange rate
  • Competition between the central bank branches in Sana’a and Aden

The country’s financial inclusion indicators are also low: + Only 6.4% of the population uses the internet + Only 0.7% have a mobile money account

DFS Market Overview

The DFS market in Yemen is growing, driven by increased adoption of mobile devices and online services. However, there are several challenges that need to be addressed to create an enabling environment for DFS growth:

  • Improving the regulatory environment
  • Increasing efforts to reach specific user groups (e.g., women and vulnerable members of society)
  • Investing in consumer education and financial literacy

Opportunities for Market Growth

The report highlights opportunities for market growth by focusing on:

  • Improving the regulatory environment
  • Increasing efforts to reach specific user groups
  • Investing in consumer education and financial literacy

Additionally, it recommends identifying, brokering, and nurturing DFS partners who commit to co-designing services specifically designed to meet the needs of women.

Regulatory Reforms

The report suggests that regulatory reforms can help encourage innovative applications by lowering barriers to access. The Central Banks of Egypt, Jordan, and Morocco have already updated their banking regulations to encourage such innovations.

Consumer Education

Financial literacy is a key challenge in Yemen’s DFS market. The report recommends investing in consumer education to improve financial literacy, which will create opportunities for DFS providers to commercialize their business models.

Conclusion

The suspension of mobile services in Yemen has highlighted the challenges facing the country’s DFS market. To address these challenges, it is essential to focus on improving the regulatory environment, increasing efforts to reach specific user groups, and investing in consumer education and financial literacy.