Years of conflict have deepened the Yemeni economy’s longstanding reliance on cash. The country’s underdeveloped formal banking and financial infrastructure hinders credit intermediation, and most economic activity is conducted on a cash basis, from day-to-day purchases to large-scale transactions. As in other cash-based economies, liquidity constraints and immediate consumption needs hinder long-term investment and economic development, exacerbating unemployment and slowing wage growth. The conflict has severely inhibited economic activity and distorted the allocation of resources. Prolonged political instability and armed conflict have had a deeply negative impact on Yemen’s economy, yet the country’s financial sector has demonstrated remarkable resilience and adaptability. The main financial players operating in Yemen are banks and money exchangers. This analysis shows that their liquidity-focused business model gives money exchangers an important advantage over banks in Yemen’s cash-dominated economy.
Authors
Related Organizations
- Citation
- “ World Bank . 2024 . Yemen Financial Sector Diagnostics . © Washington, DC: World Bank . http://hdl.handle.net/10986/42367 License: CC BY-NC 3.0 IGO . ”
- Collection(s)
- Financial Sector Assessment Program
- DOI
- https://doi.org/10.1596/42367
- Identifier externaldocumentum
- 34410019
- Identifier internaldocumentum
- 34410019
- Pages
- 152
- Published in
- United States of America
- Region country
- Yemen, Republic of
- Report
- 194269
- Rights
- CC BY-NC 3.0 IGO
- Rights Holder
- World Bank
- Rights URI
- https://creativecommons.org/licenses/by-nc/3.0/igo
- UNIT
- EFI-MNA-FCI-Finance-1 (EMNF1)
- URI
- https://hdl.handle.net/10986/42367
- date disclosure
- 2024-11-06
- region administrative
- Middle East and North Africa
- theme
- Financial Infrastructure and Access,Financial Stability,Finance,Enterprise Development,Private Sector Development,MSME Development,Payment & markets infrastructure,Financial Sector Integrity,Financial Sector oversight and policy/banking regulation & restructuring
