Financial inclusion is one of the most used phrases in development finance — and one of the least understood. Joining me now is Thomas Rahn, Head of Project at GIZ, with 14 years of experience building financial inclusion programmes across the Arab world. Thomas, welcome to Wall Street to Mena.
Thank you for having me.
After 14 years working across Palestine, Jordan, Iraq, and Tunisia — what is the single biggest misconception about financial inclusion that you keep encountering?
The biggest misconception is that having an account equals being financially included. It does not. We have gotten very good at counting accounts opened. What we have not solved is why so many of those accounts are never used after the first transaction. A bank account means nothing if the product behind it does not fit the financial reality of the person holding it. A seasonal farmer, a micro-entrepreneur, a woman running a home-based business — none of them live in the same financial rhythm as a salaried urban professional. Yet most financial products are designed for that latter group.
What does genuine financial inclusion actually look like on the ground in these markets?
It looks like a person being able to save in a way that fits their income cycle — whether that is daily, weekly, or seasonal. It looks like being able to send and receive money without travelling to a branch that may be two hours away. It looks like being able to access credit that is assessed on the basis of actual transaction behaviour rather than formal collateral requirements they can never meet. And it looks like being able to pay for services digitally in a market where the merchant and the customer both trust the system enough to use it. That last piece — trust — is often the hardest to build and the easiest to destroy.
You have worked in some very difficult operating environments — Palestine, Iraq. What do conflict and fragility do to financial infrastructure and how do you build around it?
Conflict destroys physical infrastructure but it also destroys institutional trust, which takes far longer to rebuild. In a fragile environment, people do not trust banks — sometimes for very good historical reasons. So you have to work with whatever trust infrastructure does exist — community savings groups, mobile money agents, remittance corridors that have been operating informally for years. The best programmes we have run are the ones that started by understanding those existing trust relationships and then formalising them gradually, rather than trying to replace them with a foreign institutional model.
Where is fintech actually making a measurable difference in the markets you work in — and where is it still more pitch than reality?
The clearest wins are in payments and remittances. Digital payment corridors are reaching people that traditional banking never will — the costs are lower, the access points are more local, and the interfaces are increasingly available in Arabic and in formats that work for lower-literacy users. Agent banking networks have also been transformative in markets like Jordan and Tunisia. Where it is still more pitch than reality is credit. There are a lot of fintech companies saying they can assess creditworthiness through alternative data — social media activity, mobile usage patterns — but the evidence on whether those models actually serve underbanked populations equitably is still thin. We need to be very careful that we are not just creating a faster, cheaper version of the same exclusion.
What is your message to fintech founders who want to build for these markets?
Come and spend time in the community before you write a single line of code. Not a week — months. The biggest mistake I see from well-meaning founders is that they design a solution and then look for a problem it fits. In financial inclusion that approach almost always fails. The needs are very specific, the trust dynamics are very local, and the distribution challenges are enormous. But the opportunity is also enormous — there are hundreds of millions of people across the Arab world who are underserved by the current system and who want better. The founders who take the time to understand those people will build something that lasts.
Thank you very much, Thomas, for being with us today.
Thank you. It is a very important conversation and I am glad we are having it.
