Case study: How Arab Bank promotes financial inclusion and literacy
Established in 1930 and headquartered in Amman, Jordan, Arab Bank has one of the largest global Arab banking networks, with more than 600 branches spanning across five continents. Arab Bank works on the financial inclusion of the financially unserved segments of its community to enhance their financial knowledge Tweet This!, so as to contribute to improving the community’s overall wellbeing.
This case study is based on the 2019 Sustainability Report by Arab Bank published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Arab Bank helps people from different segments of its community feel empowered with the knowledge, skills and confidence they need to make smart, everyday financial decisions, offering a variety of services, support, information and tools. In order to promote financial inclusion and literacy Arab Bank took action to:
- implement the “Shabab” programme
- use the “Jomopay” mobile payment system
- invest in the sustainable development of local communities
- support the national financial educational programme
- sponsor social financial literacy programmes
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With this case study you will see:
- Which are the most important impacts (material issues) Arab Bank has identified;
- How Arab Bank proceeded with stakeholder engagement, and
- What actions were taken by Arab Bank to promote financial inclusion and literacy
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What are the material issues the company has identified?
In its 2019 Sustainability Report Arab Bank identified a range of material issues, such as legal and regulatory compliance, governance, accountability and transparency, customer experience and satisfaction, ethical conduct, information security and data privacy, talent attraction and retention. Among these, promoting financial inclusion and literacy stands out as a key material issue for Arab Bank.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Arab Bank engages with:
To identify and prioritise material topics Arab Bank engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Customers | · Service & Communication Channels · Feedback Methods · Regular Annual Reports · Media |
| Shareholders | · Annual General Assembly · Financial and Non-Financial Reports |
| Government | · Regulatory Reporting and Audits · Regulatory Review · Regulations |
| Community
| · Social and Digital Media · Regular Annual Reports · Media · CSR Activities & Initiatives |
| Suppliers
| · Meetings · Contracts |
| The environment
| · Engaging with Clients & Borrowers on ESG Issues · Engaging with Environmental NGOs · Sustainability Reports |
| Employees
| · Internal Communication Channels · Volunteering Activities |
What actions were taken by Arab Bank to promote financial inclusion and literacy?
In its 2019 Sustainability Report Arab Bank reports that it took the following actions for promoting financial inclusion and literacy:
- Implementing the “Shabab” programme
- Through its “Shabab” programme, Arab Bank provides the youth with financial services that are not usually offered to them and with an exceptional early banking experience, through the programme’s lifestyle and financial benefits. Additionally, Arab Bank offers to students working in part-time jobs first jobbers’ access to credit facilities at preferential terms.
- Using the “Jomopay” mobile payment system
- Arab Bank has included the Central Bank of Jordan’s mobile payment system “Jomopay” within its mobile banking service “Arabi Mobile”. By participating in this service, Arab Bank widened the reach of its customers’ remittances to all users with Jomopay wallets, reducing the dependency on physical cash and providing the unbanked with access to its wide base of customers.
- Investing in the sustainable development of local communities
- Arab Bank invested JOD 148,000, in cooperation with the Jordan River Foundation (JRF), in the sustainable development of local communities. This investment provided selected Community Based Organisations (CBOs) in the governorates of Ma’an and Zarqa with revolving loan funds to promote economic opportunities and entrepreneurship in poor communities, by facilitating access to finance. Implemented by JRF, the revolving loans programme grants loans to community members through CBOs that are carefully selected and undergo screening and extensive capacity building, to enable them to manage their own revolving loan portfolio in a sustainable way. Since 2011, approximately 320 individuals have benefitted from the revolving loans, with almost 63% of them being females.
- Supporting the national financial educational programme
- Arab Bank supports the national financial educational programme, initiated by the Central Bank of Jordan, to increase financial literacy among school students and teach them how to develop smart saving habits and make sound financial decisions. Arab Bank also supported this initiative through the Abdul Hameed Shoman Foundation (AHSF). The programme is intended to bridge the gap between financial knowledge and behaviour, acquainting students with basic economic and financial concepts.
- Sponsoring social financial literacy programmes
- Believing that financial literacy starts at a young age, Arab Bank has embarked upon several sponsorships targeting children in cooperation with various NGOs. In 2019, Arab Bank supported “The Arts of Saving” programme with Haya Cultural Centre. Through this programme, children were taught the art of saving money and managing budgets through creative and interactive activities. More than 1,800 children across the Kingdom were reached.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 203-1 Infrastructure investments and services supported
Disclosure 203-1 Infrastructure investments and services supported corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.4
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4
- Sustainable Development Goal (SDG) 11: Sustainable Cities and Communities
- Targets: 11.2
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References:
1) This case study is based on published information by Arab Bank, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
http://database.globalreporting.org/
2) https://www.globalreporting.org/standards/gri-standards-download-center/
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