Financial education key to success of Measa growth

Once you bring unsophisticated users into the system, you run the risk of problems Simon Bell, global lead for SME finance at the World Bank

dubai — The future of finance in the Middle East and South Asia (Measa) will not be determined solely by technology, but also by strengthening educational facilities in the region in order to attract the next generation of entrepreneurs, says a new report.

“Equally important will be the development and diversification of financiers themselves, especially from within the region, including alternative investors in areas like private equity, venture capital funds and non-bank lenders. These firms could further help the region to unlock the finance needed to sustain longterm business growth and improve the lives of its citizens,” says a report by the Dubai International Financial Centre (DIFC) and developed by the Economist Intelligence Unit (EIU).

Too often, financial inclusion efforts, such as microfinance, are followed by debt spirals affecting those customers who may not fully understand products or who have been subject to outright exploitation. Education could ensure that people are not taken advantage of and do not fall into debt, the report notes.

“Financial education and consumer education are very important. Once you start bringing relatively unsophisticated users into the system, you run the risk of problems,” says Simon Bell, global lead for SME finance at the World Bank.

The report reveals there are significant opportunities in traditional and non-traditional financial services, especially for women and the youth.

“As the world reaps the benefits of the digital age, the financial sector in emerging and developing economies are well-positioned to succeed by embracing a combination of technology, innovation and smart policy making,” said Arif Amiri, CEO of DIFC Authority.