Qatar is witnessing a positive outlook to further strengthening the country’s financial industry. By the end of January 2020, the volume of commercial banks assets and also liabilities reached QR 1560.8 billion, an increase of QR5.8bn from December 2019 and 12.1% on year-on-year, according to the latest data from Qatar Central Bank (QCB).
The detailed data showed that the total cash and balances with QCB increased by QR 2.29 billion at the end of January 2020 compared to QR 62.47 billion recorded in the previous month. This number presented a 2.4% decline from January 2019 and an increase of 37% from January 2018.
Domestic Banking Activities
Despite the low balances with banks in Qatar in the month of the blockade at the level of QR 30.7 billion, the number rose to QR 65.4 billion in December 2019, before declining to QR 55.5 billion in January 2020.
Currently, local credit constitutes 63.2% of the total assets. It climbed in January to QR 986.1 billion, compared to QR 964.2 billion in the previous month, QR 867.2 billion a year ago, and QR 829.8 billion reported two years ago.
Meanwhile, domestic investments decreased to QR 182.4 billion in January from about QR 185.1 billion in December 2019, but it is still higher than QR 163.9 billion a year ago. Resident deposits for Qatari and non-Qatari expanded in January by about QR 17 billion from December 2019 to reach the level of QR 657.9 billion. As for deposits of non-residents, it continued to rise, reaching QR 215 billion in January from QR 208.2 billion in the previous month and QR 161.6 billion a year ago.
Credits and Balances Outside Qatar
The credit granted by banks outside Qatar showed a considerable decrease in the past two years. The number decreased from QR 91.2 billion in January 2018 to QR 82.5 billion in January 2019 and further sinking to QR 74.8 billion in January 2020.
Balances with banks abroad also witnessed a decrease of around QR 1.14 billion in January 2020 compared to QR 93.28 billion recorded in the previous month. But the number rose significantly from around QR 77.7 billion a year ago. Meanwhile, investments abroad have remained stable throughout the past two years, reaching QR 58.7 billion in January 2020.
Promoting Financial Inclusion and Financial Literacy
To ensure a safe, sound and solid financial future in the country, QCB launched the second Financial Strategic Plans (2017-2022), with promoting financial inclusion and literacy as one of the listed strategic goals.
The Qatari government has recognized the role of financial inclusion as a key policy strategy to promote sustainable growth, create employment opportunities, reducing inequality and safeguarding financial stability. This new goal has been considered, not just through supply-side measures such as access to finance, but also through demand-side actions, including promoting financial literacy.
Through this strategic plan, it is important for the country to ensure access to a full range of quality, cost-effective and appropriate financial services, particularly to unbanked and under-served populations and businesses.
Qatar witnessed an increase by nearly 60% of the number of bank branches per 100,000 persons as a measure of demographic financial inclusion during 2009-2016, while geographic financial inclusion, (the number of bank branches per 1,000 sq km) increased by roughly 10% during the same period.
