*Qatar National Financial Inclusion and Financial Literacy Strategy is in the fourth phase of development, according to QCB
Qatar has taken many initiatives in financial inclusion and literacy by launching a national level strategy. The Qatar National Financial Inclusion and Financial Literacy Strategy is in the fourth phase of development, the Qatar Central Bank said its latest Financial Stability Review.
Citing some studies, the QCB said financial inclusion initiatives create employment opportunities, reduce inequality and safeguarding financial stability.
The strategy envisage to create regulatory space for innovation to include unserved segments of the population, encourage to develop appropriate financial products and services to the underserved, leveraging new information and communication technology to allow serving marginal segments among others.
Innovations in technology like mobile payments, mobile banking and borrower identification using biometric data enabled easier and less expensive use of financial services, while increasing financial security, the QCB said.
Demographic financial inclusion as measured through the number of bank branches per 100,000 persons increased by nearly 60% during 2009-2017, while geographic financial inclusion, i.e., the number of bank branches per 1,000 square kilometres, increased by roughly 10% during the same period, the QCB said.
In addition, to provide focused developments in the area of financial inclusion and financial literacy the QCB has included “Promoting financial inclusion and financial literacy” as one among the five core goals in its Second Financial Sector Strategic Plan (SSP) 2017-22.
To fulfil the strategic goals, key action areas have been defined including facilitating digital transactions to ensure faster safer and efficient provision of financial services as well as benchmarking pricing mechanism within the financial sector among others.
The review also said Qatar’s banking sector had experienced various challenges in 2017 owing to global economic uncertainties and regional geopolitical issues.
“Amid this challenging operating environment, the sector continued its healthy performance and came out unscathed from the turbulence that arose during the course of the year,” the QCB said.
Domestic macroeconomic conditions substantially improved towards the end of 2017 positioning the banking sector at a better footing in 2018.
Firming up of oil prices and corresponding higher current account and trade surplus provided impetus for improved liquidity in the last quarter of 2017.
Along with improvements in liquidity, banks have strengthened their funding structure with higher diversification of sources of funds and maturity.
Moreover, banking sector continue to portray sound, liquid and profitable stability indicators in 2017.
The asset quality of the banks remained mostly unaffected, reflecting the prudent lending culture promoted by the QCB and adopted by the banks.
The gradual implementation of Basel III capital and liquidity requirements were within the set targets during the year. With an array of regulatory capital requirements including capital conservation buffer, D-SIB and ICAAP, the overall capital buffers improved during the year and remained supportive to the demand for credit – both from public and private sector.
Even though overall assets moderated during the year, the banking sector remained resilient, QCB noted.
Reflecting the Qatar National Vision 2030 and the QCB’s financial sector strategic plans as regards to promoting domestic private sector, bank credit to private sector retained the growth levels recorded in the last year.
Profitability largely stayed comfortable, notwithstanding some moderation during the year.
The QCB has also been rigorously implementing various prudential requirements for maintenance of financial stability. Implementation of IFRS 9 is ongoing supported by impact studies and evaluation processes, the QCB said.
The asset quality of Qatari lenders remained mostly unaffected, reflecting the prudent lending culture promoted by the QCB and adopted by the banks.
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