The Banking Executive Magazine - February 2022

The Horizon Of Digital Financial Inclusion In Arab Banks The divide across MENA is not just within countries, but also across countries. In Kuwait, one of the wealthiest countries in the world, only 3 percent say they never use the internet. This is unsurprising given the Arab Gulf has some of the highest rates of internet penetration in the world, exceeding those found in the United States and various Western European countries. Meanwhile, across the Levant the rates of offline citizens are also relatively low. Fewer than two-in-ten citizens in Lebanon (12 percent), Jordan (16 percent), and Palestine (17 percent) say they never use the internet. In contrast, roughly a quarter of respondents in Iraq (24 percent), Libya (26 percent), and Sudan (28 percent) are offline, while over three-in-ten in Morocco (31 per- cent) and Algeria (32 percent), and over four-in-ten in Tunisia (41 per- cent) and Egypt (42 percent) say the same. Most notably, in Yemen, one of the poorest countries in the world, the proportion of offline respondents roughly equals the rate of online re- spondents (47 percent versus 53 per- cent, respectively). Beyond wealth, there are a number of other factors that may contribute to the discrepancy in internet usage across MENA. As Yemen enters its fifth year of civil strife, citizens face internet shortages and connectivity issues due to both deteriorating infra- structure and politically motivated censorship and blockages. By con- trast, Morocco and Tunisia increased their mobile internet penetration rates by 15 percent and 18 percent, respectively. Arab Barometer statistics show sev- eral key variables, like age, gender, education, income, and settlement type (urban, rural, or refugee camp), that correlate with internet usage, for instance, urbanity is highly corre- lated with education levels. Older individuals are less likely to use the internet. For instance, the av- erage, religious 30-year-old Egyptian man with a basic education is 52 percent likely to be an internet user, compared to 32 percent likely if he is 40 years old. Alternatively, this can be viewed as a 58 percent decrease in the odds of being an internet user for a ten-year increase in age, hold- ing all else equal. This trend may stem from greater apprehension among older adults with respect to adopting newer technologies, less confidence in their ability to success- fully use these technologies, or that such technologies are often not built with the needs of older users in mind. In many countries the digital divide between young adults (18-29) and older individuals (60+) is severe. This generational discrepancy is most extreme among Egyptian young adults, who use the internet at a rate that is 82 percent higher than Egyp- tians who are 60 or older. In compar- ison, young adults in Kuwait use the internet at a rate 20 percent higher than older Kuwaitis. The digital gender divide shows a similar imbalance. When controlling for other variables, we see a 56 per- cent decrease in the odds of being an internet user for women as opposed to men. Women face immense barri- ers to full participation in the digital sphere, and these barriers are not dis- similar to those found in other do- mains. In fact, they are informed by and representative of real-world phe- nomena. Cultural norms, gender roles, biases, and stereotypes often dissuade and even prevent women from accessing the internet, gaining digital literacy, and participating in the digital economy or society. Ac- cording to the International Telecom- munication Union, when compared to other world regions the gap be- tween men and women with respect to the internet penetration rate is largest across Arab States. Such dis- parities coupled with the region showing the world’s worst perform- ance in narrowing the gender gap, paint a troubling picture of the pres- ent situation. In addition to age and gender, edu- cational attainment and income also ISSUE 158 FEBRUARY 2022 the BANKING EXECUTIVE 47 Statistics about Rate of Internet Usage in the Arab World (Source: Arab Barometer)