Al-Gmati: “Has Financial Inclusion Succeeded in Libya? A Critical Review of the Central Bank of Libya’s Experience”
Written by: Helmi Al-Gmati, Professor of Economics at the University of Benghazi
The Central Bank of Libya has succeeded in making significant progress in digitalization and electronic payments, but it has not yet achieved full financial inclusion in its true economic sense.
In other words, we have succeeded in shifting a large portion of transactions to mobile phones and cards, but we have not yet succeeded to the same extent in transforming the banking system into a comprehensive tool for production, savings, credit, and investment.
First: Where Has the Central Bank of Libya Succeeded?
The major leap in electronic payment infrastructure cannot be denied. According to Central Bank data from the beginning of 2026, the number of points of sale exceeded 170,000, the number of activated cards exceeded 5.5 million, and the number of subscribers to banking applications exceeded 4.29 million. Mobile banking applications recorded tens of millions of transactions involving substantial financial values.
Instant transfer services such as LYPay and OnePay have also expanded. A National Financial Inclusion Strategy for 2025–2029 was launched, with projects covering financial accounts for underserved groups, digital identity, and digital financial services. In June 2026, expansion continued with the introduction of global Visa card acceptance through local points of sale and SoftPOS technology.
So, from the perspective of technology and digital payments, there has clearly been significant success.
But Where Is the Problem?
Financial inclusion is not simply a banking application
There is considerable confusion in official discourse between Financial Inclusion and Digital Payments.
Digital payments are part of financial inclusion, but they are not financial inclusion in its entirety.
True financial inclusion means that citizens and businesses are able to:
- Open an account easily.
- Save securely.
- Obtain financing and credit.
- Insure against risks.
- Access financial services at an affordable cost.
- Finance their businesses and invest and produce.
- Obtain fair banking services across all regions and population groups.
And this is where the Libyan problem becomes apparent.
Second: The Citizen Has Entered the App, But Has He Entered the Real Financial Economy?
This is the fundamental point.
A citizen may have a bank card, a mobile application, money-transfer services, and the ability to make electronic payments.
But can they obtain a loan to establish a factory?
Can a young person obtain financing for a small business?
Can a woman establish an economic activity and obtain suitable financing services?
Can a farmer obtain seasonal financing?
Can small and medium-sized enterprises easily access credit?
Frankly, the gap remains significant.
Therefore, it can be said that Libya has achieved an expansion in digital inclusion, but it has not yet achieved productive financial inclusion in its full sense.
Third: The Major Libyan Paradox
Libyan banks hold substantial liquidity, while the economy suffers from weak financing.
This is a serious economic paradox.
There is a great deal of money within the banking system, but limited financing for production.
In other words, citizens can transfer money electronically more quickly, but they cannot with the same ease obtain financing to establish a business that produces that money.
Here, digital transformation becomes merely an improvement in the means of circulating money, rather than necessarily an improvement in the process of creating wealth and production.
Fourth: Has the Central Bank Succeeded in Reducing Dependence on Cash?
I would say that the success has been partial and significant, but not complete.
The expansion of points of sale, banking applications, and instant transfers has indeed contributed to reducing the need for cash in some transactions. The Central Bank of Libya has also, over the years, built an electronic payments and settlement infrastructure to support multi-channel banking services.
However, the continued problems of trust in banks, access to liquidity, the informal economy, the parallel foreign-exchange market, and the weak availability of advanced services outside the main urban centers mean that cash still plays a greater role than it should in the Libyan economy.
The Central Bank of Libya has succeeded in building the road toward financial inclusion, but it has not yet reached its destination.
Yes, it has succeeded in digitalizing transactions, but it has not yet succeeded to a sufficient degree in digitalizing the productive economy, financing citizens and small businesses, and transforming savings into investments.
Therefore, my economic assessment is that what has been achieved in Libya so far represents major success in the transition toward digital payments and partial success in financial inclusion, but it does not yet constitute genuine and comprehensive financial inclusion.
True financial inclusion is not measured solely by the number of cards and points of sale, but by the number of citizens and businesses that have moved from outside the formal economy into it, from consumption to production, and from a need for financing to the ability to invest.
In my view, there is still much more work ahead for the Central Bank of Libya and commercial banks.
