The European Investment Bank (EIB) launched a report on the role of mobile financial services to address financial exclusion in the Southern and Eastern Mediterranean. The report underlines that financial services are accessible to only a small part of the region’s population unlike mobile phones which have high penetration rates.

The report on “Mobile financial services in the Mediterranean partner countries” published by the European Investment Bank (EIB), represents the first-ever inquiry made by an international financial institution on the challenges and opportunities for mobile banking in the Southern and Eastern Mediterranean. The report shows, among other findings, that in the Mediterranean partner countries, less than 40% of the population have access to traditional payment systems, while 9 out of 10 have a mobile phone. In July 2012, the European Commission proposed new rules to improve consumer protection in financial services.

The report also suggests that financial exclusion threatens economic and social development. However, due to the very high penetration of mobile technology in the Southern and Eastern Mediterranean, mobile banking could offer some solutions. Among them, the EIB suggest that this technology would allow for increased international remittances to the region to boost the countries’ GDP; payments of bills could be substantially simplified, by reducing transaction costs; and sustainability of microfinance operations could be much improved in terms of efficiency and geographical coverage.

With regard to these findings, mobile operators warned that there are important regulatory and infrastructure challenges that need to be addressed first. Cooperation between central banks and telecom regulators should be further encouraged, according to them.