Financial Inclusion, Financial Literacy and Economically Vulnerable Populations in the Middle East and North Africa

Using microdata from the 2014 Global Findex, along with macroeconomic indicators, we investigate financial inclusion for the MENA region. We find that economically vulnerable populations are significantly less likely to be financially included. Households living in MENA countries with higher levels of financial literacy are more likely to be engaged in positive savings behaviors and less likely to be borrowing, especially from informal sources. Financial literacy and other macro characteristics, however, do not relate to all individuals equally, especially for those most vulnerable. The findings have important implications for policies in the MENA region, where prolonged conflicts make financial inclusion an even more urgent, yet challenging, goal.