Enhancing the Role of Microfinance Banks for Sustainable Impact in Yemen

The rival CBYs erosion of trust in the traditional banking should institute a temporary pause on new MFB system, the growth of the informal financial licenses and conduct a thorough assessment of sector, and maneuvering by the exchange the existing landscape. [...] These included Al-Qutaibi Islamic Bank for Microfinance and the Aden Islamic Bank for Microfinance, which are headquartered in the interim capital of Aden; Al-Busairi Bank for Microfinance and the Bin Dowal Islamic Microfinance Bank, headquartered in Mukalla, Hadramawt; and the Sharq Yemeni Bank for Islamic Microfinance, headquartered in Marib. [...] The bifurcation of the currency has thrown a wrench into the establishment of a unified financial system while hindering the development of the modern payment system and credit infrastructure essential for financial inclusion. [...] In March 2024, the CBY-Sana’a’s introduction of new currency further deepened the monetary division and escalated the battle between the respective central banks for control of the financial system. [...] Financial inclusion has the potential to unlock economic opportunities, empower entrepreneurs, and foster the proliferation of MSMEs, the backbone of the Yemeni economy.