Global financial inclusion stalls in 2025

Global financial inclusion has lost momentum in 2025, following two years of steady progress, according to the Global Financial Inclusion Index (pdf) by Principal Financial Group and the Center for Economics and Business Research (Cebr). The Index — which evaluates the roles of governments, financial systems, and employers across 42 markets — edged down to 49.4 points from 49.6 a year earlier, though it remains well above the 2022 baseline of 41.7. Singapore maintained its lead as the world’s most financially inclusive market for the fourth straight year.

The slowdown was driven primarily by a pullback from employers, with the employer support score dropping 0.6 points as 83% of markets reported declines. Persistent geopolitical tensions and shifting trade dynamics have left companies cautious, scaling back on employee benefits and flexible pay programs.

Governments and financial systems continued to play a stabilizing role, as the global government support score rose 0.6 points, with 35 markets posting gains in one or both pillars. Although the global financial system score slipped by 0.9 points, wealthier regions — including North America, Europe, and the Middle East — posted modest improvements, signaling stronger institutional resilience.

Gulf states recorded the strongest y-o-y gains in the financial system pillar, fueled by rapid fintech growth and ongoing digital transformation. The UAE led the advance, climbing five positions and 3.9 points to the 24th spot, while Saudi Arabia rose four spots and 1.8 points to rank 35th.

US steadies after earlier declines: The US posted a modest 0.6-point increase in its overall score, snapping two consecutive years of decline while maintaining its seventh place globally. The uptick reflected gains in financial system support, including better access to credit, private lending growth, and fintech expansion. However, broader economic headwinds and subdued SME growth limited further progress.

Markets with higher financial literacy and robust digital infrastructure proved more resilient to debt stress in tighter monetary conditions, Principal Asset Management CEO Kamal Bhatia noted. A 1% rise in financial literacy correlates with a 2.8% reduction in household loan defaults and a 6.7% decline in debt-to-income ratios, contributing to long-term GDP growth, the report found. Digital finance reforms — such as instant payments and open banking — have also propelled gains in countries like Argentina, South Korea, and Brazil since 2022.

Looking ahead: Geopolitical shocks and economic headwinds are reshaping the path of global financial inclusion, Cebr’s managing economist Pushpin Singh said. He emphasized the need for deeper financial literacy efforts and stronger collaboration among employers, governments, and financial institutions to sustain global progress.

MARKETS THIS MORNING-

US-China trade worries are weighing down Asian markets this morning. Japan’s Nikkei is down 1.4% in early trading, while the Shanghai Composite is down 0.9% and Hong Kong’s Hang Seng is down 0.7%. Meanwhile, Wall Street futures are mixed as investors process earnings.

THE CLOSING BELL-

The EGX30 fell 0.3% at yesterday’s close on turnover of EGP 5.5 bn (18.5% above the 90-day average). International investors were the sole net sellers. The index is up 26.4% YTD.

In the green: Egypt Aluminum (+6.5%), Oriental Weavers (+3.5%), and Misr Cement (+2.3%).

In the red: Abu Qir Fertilizers (-7.0%), EFG Holding (-2.7%), and Qalaa Holdings (-2.5%).