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The Capital Market Authority issues a report on the challenges and opportunities in implementing the National Financial Inclusion Strategy, specifically concerning the non-banking financial sector.

The Capital Market Authority issued a report today, Wednesday, on the challenges and opportunities in implementing the National Financial Inclusion Strategy as part of the Arab Financial Inclusion Day activities, in response to the initiative of the Arab Monetary Fund.

The report addressed a set of challenges that faced the implementation of the National Financial Inclusion Strategy in Palestine, primarily stemming from the financial and economic policies of the occupation, especially the crises of clearance and the cessation of tax transfers by the occupation, which it collects on behalf of the Palestinian government. The first crisis occurred in 2019, followed by the second crisis at the beginning of 2020.

These two crises resulted in the interruption of salaries for public sector employees and the suspension of governmental financial transfers. The Palestinian government was unable to meet its financial obligations to private sector suppliers of goods and services, leading to a sharp decline in their basic needs and the ability to fulfill their pensionary financial commitments, particularly those related to the financial sector, such as loan repayments, insurance premiums, and monthly installments on financial leasing contracts, among other financial obligations. Consequently, this led to a significant decrease in the overall demand in the Palestinian economy due to a sharp reduction in Palestinian citizens’ per capita income levels.

The report also discussed the effects of the COVID-19 pandemic. The pandemic, which began in the first quarter of 2020, had negative impacts on all aspects of life worldwide, and the Palestinian economy was not immune to its repercussions. In fact, the Palestinian economy experienced more severe consequences due to the preexisting challenges, including the two clearance crises, and the absence or weakness of intervention tools by the Palestinian government. One of the key factors contributing to this challenge is the absence of a national currency, which limits the government’s ability to implement monetary policies, quantitative easing mechanisms, or fiscal policy tools, similar to other countries.

These factors resulted in a lack of tangible progress in financial inclusion indicators during the first four years of implementing the strategy. Conversely, it is noteworthy that the non-banking financial sectors were not significantly negatively affected by the repercussions of the COVID-19 pandemic. This was evident in the absence of a sharp and sustained decline in financial inclusion indicators. These indicators rebounded in 2021 to levels approximately to those achieved in 2019, essentially returning to pre-pandemic levels. One of the reasons for this is that most insurance policies are annual and are typically issued at the beginning of the year (for general insurance), so when the pandemic hit in March 2020, many of these policies had already been issued. The same applies to financial leasing contracts.

The report recommends conducting a comprehensive assessment of the financial inclusion landscape in Palestine in light of the achievements and implementation of the National Financial Inclusion Strategy. This assessment should also consider the recent developments in the financial sector and the use of financial and insurance technology. Furthermore, it suggests a reevaluation of the strategic objectives outlined in the Financial Inclusion Strategy and its corresponding implementation plan, with any necessary adjustments based on the evaluation results, including a reconsideration of priorities and needs.

The full report can be accessed by visiting the following link: Arab Financial Inclusion Day 2022 Reports – Capital Market Authority (

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