digital innovation: catalyst for financial inclusion · digital innovation: catalyst for financial...
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Digital Innovation: Catalyst for Financial
Inclusion The case of Lebanon
Delivered by Mr. Mohamed Jabri Executive Director, Head of Training and Development Department
Banque du Liban
EuroMed Workshop 2019 |Non-bank finance and financial intermediation Naples, 18-19 June 2019
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Outline 1. Digital inclusion in Lebanon 2. Financial inclusion in Lebanon 3. Promises of Digital Financial Inclusion
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1. Digital inclusion in Lebanon
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Demographic Characteristics Enabling factors for digital financial inclusion
Population
Including around 2 M refugees and displaced
18-35 years old
Millennials Tech-savvy consumers
Willing to experiment and
use digital financial products
and services
World Bank (2018), Hootsuite (2018)
Median age: 31.3 years old
Annual change in size: +0.2%
Literacy
Female: 92% Male: 96%
6 M
32%
94%
Highly Skilled Cost Competitive Labor
Force
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Use of digital infrastructure Enabling broader outreach for digital innovation
Internet Users
5.54 M
Penetration: 91%
4.56 M
Mobile Connections
Penetration: 75%
Hootsuite (2018)
Annual growth: +22% since January 2017
or +995,000
Annual growth: +2% since January 2017
or +79,000
4.99 M
Mobile Internet Users
Penetration: 82%
Consumer Readiness
62.54
Out of a maximum of possible score of 100 as per GSMA Intelligence’s
Assessment of Mobile Connectivity
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Comparison with other MENA countries
61%
90% 95% 95%
43%
99%
31%
42%
77% 85%
31%
89%
Egyp
t
Leba
non
Qat
ar
Saud
i Ara
bia
Tuni
sia UAE
Mobile penetration (2015)
Smartphone penetration
Mobile broadbank subscriptions
2014 2015 2016Egypt 36% 45% 59%Lebanon 62% 79% 84%Qatar 78% 94% 93%Saudi Arabia 85% 89% 93%Tunisia 45% 44% 49%UAE 96% 97% 100%
Internet penetration
The Economist (2016)
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ICT and Knowledge Economy Role of Banque du Liban as a catalyst for digital innovation
Hootsuite (2018), Banque du Liban (2018)
USD 260 M
to support the Funding of Digital Innovations
invested in
start-ups
Banque du Liban’s Circular 331
through
Venture Capital firms and
Commercial Banks
in the sectors of
ICT and
Knowledge Economy
800 new companies created
9,000 new jobs created FinTechs including
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2. Financial inclusion in Lebanon
destinationlebanon.gov.lb
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Account Penetration Percentage of individuals with a current account at a formal institution
59% 41%
Adults (18+)
Included
Excluded
67% 49%
Gender
Male
Female
Account Penetration by Region
33%
63% 50%
Age
Young (18-24)
Adult (25-64)
Elderly (64+)
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Bank Savings Account Percentage of individuals with a savings account at a formal institution
26%
74%
Adults (18+)
Saved
No
30% 21%
Gender
Male
Female
Bank Saving Account by Region
13%
26% 32%
Age
Young (18-24)
Adult (25-64)
Elderly (64+)
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Borrowing Account Percentage of individuals that have borrowed at least one type of credit product Percentage of individuals with a Consumer loan at a formal institution
37%
Adults (18+)
Borrowed
No
39%
34%
Gender
Male
Female
Consumer Loan by Region
29%
41%
17%
Age Young (18-24) Adult (25-64) Elderly (64+)
14%
86%
ConsumerLoan
No
14%
14% Male
Female
7%
17%
5%
Young (18-24) Adult (25-64) Elderly (64+)
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Debit Card Ownership Percentage of individuals with a Debit card
35%
65%
Adults (18+)
Owned adebit card
No
43%
27%
Gender
Male
Female
Debit Card Ownership by Region
22%
39%
19%
Age Young (18-24) Adult (25-64)
Elderly (64+)
24%
55% Education
Primaryeducation orless
Secondaryeducation ormore
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Credit Card Ownership Percentage of individuals with a Credit card
23%
77%
Adults (18+)
Owned acredit card
No
27% 19%
Gender
Male
Female
Credit Card Ownership by Region
16%
25%
12%
Age Young (18-24) Adult (25-64)
Elderly (64+)
15%
36%
Education
Primaryeducation orless
Secondaryeducation ormore
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Online Transactions Percentage of individuals that make online transactions (e.g. purchases, bill payments)
9%
91%
Adults (18+)
Mobilebanking
No
11% 8%
Gender
Male
Female
Internet transactions by Region
9% 10%
5%
Age Young (18-24) Adult (25-64)
Elderly (64+)
5%
17%
Education
Primaryeducation orless
Secondaryeducation ormore
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Mobile Services Percentage of individuals that use a mobile for financial transactions (e.g. make or receive a payment)
7%
93%
Adults (18+)
Mobilebanking
No
8%
5%
Gender
Male
Female
Mobile banking by Region
9% 7%
3%
Age Young (18-24) Adult (25-64)
Elderly (64+)
4%
12%
Education
Primaryeducation orless
Secondaryeducation ormore
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3. Promises of Digital Financial Inclusion
destinationlebanon.gov.lb
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Digital Innovations
Atos (2018)
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FinTech Space in Lebanon Technology-based companies disrupting/complementing the financial services market
FinTechs
40+ Local companies
Payments
Lending
Portfolio management
Digital banking
Treasury management
Money transfers
Personal finance
Insurance
Benefited from BDL Circular 331
Support
1/4
supplying various Financial Services
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Fostering Financial Inclusion through FinTech Impact of digital financial innovations* on the customer and the market
1. Better customer experience: easier use, higher trust and customer engagement 2. Enhanced consumer protection: interactive complaint solving, fraud control 3. Improved products: new digital features, higher operational efficiencies,
greater affordability 4. New value propositions: customized services, higher flexibility 5. Sound financial infrastructures: catalyst for other financial services (digital
identity verification, collaborative customer due diligence, data sharing, easier payments)
6. Greater competition and use cases: greater choice and competition in the market, more use cases for digital accounts
CGAP (2019)
Create value and ease age-old pain points in delivering financial services to the under-served low income customers
*introduced by FinTechs or incumbent banks or Tech companies