A recent survey conducted by the Central Bank of the UAE (CBUAE) across the seven Emirates in the UAE has revealed that 85 percent of adults (aged 15 years and above) are users of at least one formal financial service. Whereas 15 percent of the surveyed have no access to formal financial services, or in other words are “financially excluded”.
The survey was conducted among 5,134 resident individuals, aged 15 years and above including students and low and mid-income individuals.
The survey was intended at gathering information to facilitate the central bank to design and implement a holistic strategy to enhance the degree of financial inclusion in the UAE.
The survey consolidated data from individuals on their access to formal financial services that are considered necessary enablers to improve their livelihoods, such as access to a bank account, access to formal credit, access to insurance services, and access and usage of money transfer services (remittances).
Other than the comparatively high degree of financial services users (85 percent), the survey discloses valuable insight regarding individuals’ access/usage, or lack, of formal financial services rendered by financial institutions in the UAE.
Close to 61 percent of the studied adults have a bank account, which is lesser than the world average of 69 percent (World Bank’s 2017 Global Findex Report). Amongst the 39 percent of the adults who replied to the survey and do not have a bank account, 20 percent responded that they did not apply for a bank account, while 19 percent fancied a bank account but did not meet the requirements, either because they are unemployed or have inadequate income.
When inquired about access and usage of other formal financial services, the survey discloses that 29 percent of respondents had credit or obtained money from formal financial institutions, 57 percent of respondents had insurance, and 69 percent made or received external transfers (remittances) to/from the UAE.
It is worth noting that 39 percent of unbanked adult respondents are users of remittances services rendered by providers in the UAE. This explains why even though the percentage of banked adults is only around 61 percent, the degree of financial inclusion in the UAE is still comparably high at 85 percent.
Policymakers around the world, including the Central Bank of the UAE, choose financial inclusion as a mechanism to enhance the living standards of citizens, decrease poverty, and achieve growth in economic development.