Digital Financial Services in the MENA Region Recommended citation: Riley, Pamela, Sarah Romorini, Emma Golub, and Maggie Stokes. 2020. Digital Financial Services in the MENA Region. Rockville, MD: Sustaining Health Outcomes through the Private Sector Plus Project, Abt Associates Inc. Cooperative agreement: AID-OAA-A-15-00067 Submitted to: Amy Kay, Senior Healt h Advisor, Bureau for the Middle East, USAID Elaine Menotti, AOR, Service Delivery Improvement Division, Office of Population, USAID About SHOPS Plus: Sustaining Health Outcomes through the Private Sector (SHOPS) Plus is USAID’s flagship initiative in private sector health. eThe proj ct seeks to harness the full potential of the private sector and catalyze public-private engagement to improve health outcomes in family planning, HIV/AIDS, maternal and child health, and other health areas. SHOPS Plus supports the achievement of US government health priorities and improves the equity and quality of the total health system. Cover photo: Recep Büyükgüzel Abt Associates Inc. 6130 Executive Boulevard Rockville, MD 20852 USA Tel: +1.301.347.5000 abtassociates.com American College of Nurse-Midwives | Avenir Health Broad Branch Associates | Banyan Global | Insight Health Advisors Iris Group | Population Services International | William Davidson Institute at the University of Michigan ii Digital Financial Services in the MENA Region This report is made possible by the support of the American people through the United States Agency for International Development (USAID).The contents of the report are the sole responsibility of Abt Associates and do not necessarily reflect the view s of USAID or the United States government. iii Contents Contents ............................................................................................................................... iv Tables ................................................................................................................................ vi Figures ............................................................................................................................... vii Acronyms ........................................................................................................................... viii Executive Summary............................................................................................................. ix Background ........................................................................................................................... 1 Introduction................................................................................................................ ......... 1 Objectives ........................................................................................................................ 1 Methodology ..................................................................................................................... 2 Glossary of terms .............................................................................................................. 2 Global context ....................................................................................................................3 What is DFS?................................................................................................ 3 Why DFS matter ........................................................................................... 3 Global initiatives to promote financial inclusion............................................... 4 Foundational regulations ............................................................................... 5 Regional findings.................................................................................................................. 6 Financial account ownership.............................................................................................. 6 Mobile subscribers ............................................................................................................ 8 Use of DFS ....................................................................................................................... 9 Gender disparity...................................................................................................... 10 Consumer mistrust .................................................................................................. 12 Lack of perceived value ........................................................................................... 12 Findings by topic................................................................................................... ............. 13 Technical assistance from global partners ....................................................................... 13 DFS regulatory reform............................................................................. ........................ 14 Political commitment ................................................................................... 15 e-Payment authorization and infrastructure .................................................. 15 Know-your-customer rules ........................................................................... 16 Regulatory “sandbox” to test new approaches.............................................. 17 DFS supply ..................................................................................................................... 17 DFS provision ............................................................................................. 18 Government applications ............................................................................. 19 DFS access points..................................................................................... ..................... 19 iv DFS applications...................................................................................................... ........ 20 DFS and refugees............................................... ..................................................... 20 DFS and microfinance institutions............................................................................ 22 DFS and remittances............................................................................................... 23 DFS in the health sector .................................................................................................. 24 Digital health........................................................................................................... 24 Digital IDs ................................................................................................................ 26 Digital finance in health ........................................................................................... 26 DFS and health insurance ....................................................................................... 27 Case study in Egypt: Democrance democratizes access to life and health insurance .......................................................................................................... 29 Country profiles ............................................................................................................ 31 Algeria ................................................................................................................. 32 Egypt ................................................................................................................. 34 Iraq ................................................................................................................. 37 Jordan ................................................................................................................. 40 Lebanon ................................................................................................................. 43 Libya ................................................................................................................. 45 Morocco ................................................................................................................. 47 Syria ................................................................................................................. 49 Tunisia ................................................................................................................. 51 West Bank & Gaza ....................................................................................................... 53 Yemen ................................................................................................................. 55 Implications and recommendations............................................................................. 57 Conclusion........................................................................................................................... 60 Annex. List of Key Informants .............................................................................................61 Bibliography ........................................................................................................................ 62 v Tables Table 1: DFS regulatory status by topic.................................................................................. 14 Table 2: DFS regulatory status by country.............................................................................. 15 vi Figures Figure 1: Percent of adult population (ages 15+) that does not own a financial account by region, 2017 ...................................................................................................................... 7 Figure 2: Percent of adult population (ages 15+)