National Financial Inclusion Strategies (NFIS) National Financial Inclusion Strategies play major roles in shaping policies and regulatory frameworks that promote significant interventions contributing to economic and social integration for the most vulnerable segments of the society

Lack of specialized or qualified banks to meet the needs of the excludedLack of Legislations that govern the Microfinance Industry Percentage of Adults that have access to formal financial services in the Arab Region is very low (21% excluding GCC) More than 180 million of the total Arab Population do not have access to formal financial services Those who have banking accounts, only 25% of which have savings. This percentage drops to 1% when considering youth Between 16 and 17 million of Micro and small enterprises lack of formal financial access for Unemployment rate among youth in the Region is the highest (28%). Of those, 43% are young women Why a NFIS is needed for countries?

What an NFIS should include ? In order for a national financial inclusion strategy to be efficient and effective, it should bear into account the following: Sound Legal and Regulatory FrameworkGender Strategy and Women Empowerment Market Study: Supply & Demand of Microfinance Microfinance Products and Services: Credit, Health Insurance, Savings, Islamic Microfinance, Education Loans, and Renewable Energy Graduation Programs (LINK)MSME’s / MFI’s Finance: Access to Savings, Credit Lines, Lease Finance, and Wholesale Finance MFI’s Institutional Development and Technical Assistance Delivery Channels: Mobile Payments, Pay Kiosks, ATM Payments, Agent NetworksMoney Transfer Financial Education and Business Development Services

AGFUND’s Model in Financial Inclusion & Microfinance AGFUND’s Model Lead Development of Regulatory Microfinance Environment Provide Inclusive Financial Services (Loans, Saving, & Microinsurance) Social Business Employment condition: no previous Microfinance experience is required Common Practices NOT APPLICABLE Lending Only Mostly For Profit Employment condition: 4 years of Microfinance experience is required

AGFUND’s Model Private Sector participation is required (Believers in Social business) Encouraging Supportive functions (Ex. Information Technology) Technical Support for 2 years costs less than US$ 500,000 Hiring Priority : Local Experts from Poor Families Common Practices NOT APPLICABLE Technical Support for 2 years costs More than US$ 2.4 million Hiring Priority: Foreign Experts Graduate Microcredit Clients to become Small Enterprises NOT APPLICABLE AGFUND’s Model in Financial Inclusion & Microfinance

MICROFINANCE: -Individual & Groups -Rural & Urban -Direct & Through NGOs SMEs LOANS Welfare to Microfinance Products Offered in our Banks TAKAFUL - In house (micro) - Outsource (small) HEALTH INSURANCE Credit Insurance Saving SAVINGS: -Youth Accounts -Current Accounts -Time Deposits INVESTMENT FUNDS Others REMITTANCES CURRENCY EXCHANGE CASH DISBUREMENTS -Mudaraba -Murabaha -Musharaka -Sala’m -Ijar’a -Mogawla Islamic Product

Access to Resources  Targeting women, farmers & youth students wholesale finance savings mobilization savings mobilization  Targeting banks, & others commercial bank Profit sharing 50% to 50% attract deposits from customers Annual profit 14%

 Targeting universities, technical & vocational institutes graduates.  Designing new products Branches in Rural and Urban areas. Opening a New Bank Every Year Opening a New Bank Every Year  Orphans  Retired  Disabled  Female prisoners  Orphans  Retired  Disabled  Female prisoners What makes us different? Targeting Rural Areas Targeting Marginalized Expansion Focusing on Youth

What makes us different?  Youth  Women  Rural areas  SME  Marginalized segments  Supporting outreach tools (Branches, Branchless Banking, Tablets, and mobile branch).  Developing IT system  Designing new financial products.  Training (staff and clients) Capacity Building Outreac h Tools Funds

Educational Loan Micro-insuranceMicro-insurance Micro-savingMicro-savingMicro-creditMicro-credit 3 times of good records Profit-making business Creating Job Opportunities Being Registered Non-financial Services

AGFUND Banks Current Indicators * Assuming average family size is 5 members Total Ibdaa Mauritania Ibdaa Palestine Ibdaa Sudan Ibdaa Lebanon Ibdaa Sierra Leone Ibdaa Syria Ibdaa Bahrain Al-Amal Yemen Al-Watani Jordan Inception To Dec ,9225,2904,90416,59920,29310,57312,7655,170195,341283,987 No. of loans disbursed 279,1154,694-19, , ,780 No. of saving Accounts 564,2595,2904,90416,59920,29310,57312,7655,170195,341293,324 Total No. of Clients 2,821,29526,45024,52082,995101,46552,86563,82525,850976,7051,466,620 Total Impact* Loans Disbursed (MM) 64%39%48%89%76%100%35%51%56%81% % of women 96%99%95%98% 95%100%83%98%99% Repayment rate # of employees # of branches

AGFUND Future Business Plan The AGFUND Five Year Business Plan is based on establishing a Microfinance Bank every year.

Legislative Framework of Microfinance JordanJordan Financial Inclusion Jordan Microcredit Providers YemenYemen BahrainBahrain SyriaSyria Sierra Leone LebanonLebanon SudanSudan PalestinePalestine MauritaniaMauritania Microfinance Providers Yemen Bahrain Syria The ultimate goal is to achieve financial inclusion for all countries YemenYemen SudanSudan Sierra Leone Lebanon Mauritania Palestine Sudan MauritniaMauritnia