50 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 42 | 2024 In a 2015 article from The Guardian, a director of Attijariwafa Bank, Morocco’s largest bank, reflected on working on products catered toward low-income populations. Customers who live near bank branches had never entered them due to their “fancy appearances,” at the same time having desires for savings products for lifecycle events like children’s education and for insurance (Douiri, 2015). Unbanked Moroccans appear to perceive formal financial institutions as not offering products that fit their needs; instead, they perceive the services as meant for higher class individuals. Furthermore, Moroccan cultural and societal norms fuel negative perceptions. The same Attijariwafa Bank director added that Moroccans value privacy of their finances, reflective of traditions to refrain from the display of personal wealth. Practical desires for financial privacy consist of women hiding savings from husbands and households keeping accounts quiet for fear neighbors might ask to borrow money (Douiri, 2015). Greenback Initiative responses revealed that remittance-receivers favor non–account-backed payment services over banks due to confidentiality and simple, transparent services. Banks are intimidating, are associated with transfers requiring long processing times, and lack transparency about fees (De Vaan & Delort, 2021). Monthly bank statements sent to residences also raise privacy concerns for the unbanked, as postal problems may enable others to see account histories (Douiri, 2015). Negative public perceptions of financial institutions clearly hinder use of formal services, even if products catered toward underserved groups are easily available. Responsibility is not completely one-sided, however. The 2014 financial capability survey showed that 25% of those surveyed experienced a conflict with a financial service provider that year, but only 43% of those sought to address it due to feelings that financial providers were too powerful, beliefs that government authorities did not work properly, or lack of awareness of appropriate authorities to approach (Ruiz Ortega et al., 2014). Policy efforts addressing low financial service usage Rampant informality and cash reliance, low financial literacy, and negative perceptions of formal financial institutions are complex social and economic issues. They are troublesome to address with singular policies and will take time to improve. Nonetheless, systemic policy action is being taken to improve opportunities for the unbanked and underbanked to manage, borrow, and invest their money. Public authorities have been encouraging formalization of the large, informal, small and medium-sized enterprise population and self-employed individuals by simplifying tax regimes, incorporating social protections within them, and exempting underserved groups from tax and social contributions, as have other MENA countries (Cardarelli, 2022). Gradually formalizing businesses that pay labor under the table in cash provides opportunity for account-backed or mobile wage payments, at the same time supporting transferring the personal financial activities of the large share of informal workers to formal institutions. BAM also has long prioritized financial education, creating the Moroccan Foundation for Financial Education (FMEF) in 2013. FMEF works to maximize financial literacy for children and young adults, women, the rural population, and entrepreneurs (FMEF, n.d.). Education regarding banking offers is one of FMEF’s primary levers, through digital training, radio, and social media campaigns. A large step FMEF and BAM took in 2022 was introducing a National Financial Capability Barometer, a benchmark system encouraged by the World Bank, Organisation for Economic Co-operation and Development, and Alliance for Financial Inclusion to measure financial capacity and behavior of Moroccans to drive financial education policy (BAM & MEF, 2021). FMEF has also worked with private firms to improve public views of financial institutions. In 2021, BAM and FEMF’s City-Tour program offered guided tours of banks and other financial institutions in Casablanca and Settat for underserved communities. Feedback from these trial tours was overwhelmingly positive, with participants expressing newfound feelings of ease and control when making decisions in banks and payment institutions (BAM, 2022). Recent agreements, including the 2021 partnerships between FMEF and Banque Centrale Populaire targeting entrepreneurs, FMEF and Al Barid Bank facilitating support programs for underserved groups, and the annual Global Money Week that aims to connect millions of Moroccans with financial educational programs all demonstrate a commitment to enhance perceptions of formal institutions (BAM, 2021b; BAM & MEF, 2021). These programs have been catered toward the right issues and populations, but their reach is uncertain and implementation expensive. For example, the City-Tour model directly brings the underserved to financial institutions to enhance their knowledge and perception of financial products yet faces the tradeoff of high effectiveness for low coverage; only
RkJQdWJsaXNoZXIy MTA0OTQ5OA==