Sep. 8, 2019
Financial inclusion and literacy are the foundations on which great economies are built, and recent data shows Lebanon is catching up fast, thanks to its robust banking sector.
Against the backdrop of regional instability, a well-regulated and robust banking sector continues to remain the anchor of stability in Lebanon. Reports released by Fitch and Moody's in 2018 affirm a stable outlook for the sector. Remarkably, the banking sector has the backing of assets whose value exceeds 360% of the country's GDP.
A World Bank report shows that significant improvements were made between 2011 and 2017. The percentage of people owning a bank account improved from 37% in 2011 to 44.75% in 2017, with those living in rural areas posting the highest increase, from 29.76% to 44.4%. Even more impressive, within the same period, credit card ownership among women and the poorest 40% rose 266% and 235%, respectively.
This shows the Central Bank of Lebanon's “National Strategy on Financial Inclusion: Regulation, Empowerment and Protection" and the private banking sector's wide-ranging financial literacy and inclusion initiatives have had a profound effect. These programs range from a daily two-minute program on a leading television channel to a “Big Bank Challenge" designed to give financial knowledge to teenagers using real-life situations.
Moreover, banks have encouraged lending to priority sectors, including SMEs, as well as supporting micro-loans to small enterprises. Numerous banks have also boosted lending to entrepreneurs working in knowledge and innovation sectors and to youth for tuition fees.
Indeed, servicing the needs of the youth has been the top priority for banks across Lebanon. And as one of Lebanon's oldest banks, BSL Bank is making waves in the market with housing and car loans with almost 0% annual interest burden. BSL Bank's General Manager, Elias Alouf, explained to TBY that “while we are targeting this young generation, the base of our banking philosophy is to assist them in their basic banking needs without spoiling them… Given the tough economic times, it is important that banks fulfill their social role."
Another way BSL Bank is targeting financial inclusiveness among the youth is through e-banking and mobile penetration, which has stayed low in Lebanon. Alouf highlighted the bank's rewards program called “Moments." “Every transaction done through our bank earns our customers 'Moments,' which can be spent in a variety of ways, such as a range of 800 airlines and 5,000 hotels and car rental companies."
Initiatives taken by the likes of BSL Bank must be supported and celebrated, but given the realities on ground, the financial sector must march on and keep its eyes on achieving greater financial inclusion for all.