expensive to register and may not be readily enforceable, and on outdated credit assessment and risk management techniques. Low income customers and microenterprise clients face higher pricing and more paperwork and delays, and many otherwise creditworthy individuals and entrepreneurs are excluded from access to finance.

**The majority of banks in the MENA region accept movable property as collateral** . However, loans only secured with movable collateral are not widely used, due to the inability of banks to secure the right over the asset through a collateral registry and due to the difficulties in enforcing security interests in movable property. This is particularly acute for microloans where it may not make economic sense to execute collateral on a very small outstanding amount if the costs of doing so are relatively high. Movable property is usually accepted as a secondary type of collateral and usually taken as a complement to fixed assets (real estate property), which are also not well suited to microloans. Loans secured with assets such as receivables and inventory, are used even less often.  None of the MENA countries have a modern law on secured transactions. Intangible movable property, such as accounts receivables, bank accounts and salaries, is only allowed in a few MENA countries. (de la Campa, 2010)

**In most countries, MFIs have not been integrated into the formal credit information system,** thus creating an information gap that could have direct consequences on the stability of the financial system. In some cases MFIs are prohibited by law from participating in the credit information system. In others, MFIs are reluctant to participate due to the high cost of the system. The high value thresholds in some credit information systems also constitute a major challenge when compared to the low value of most microloans.

**The Moroccan central bank and the Palestinian Monetary Authority have taken a regional lead in requiring microfinance institutions to also upload lending and borrower data** and to verify current debts of potential clients into their credit information system.  Arrangements to do so are under development in at least 5 MENA countries, but are not yet finalized, and ongoing delays threaten the quality and sustainability of microfinance sector growth, leaving an information gap that could result in similar microfinance crises. MFIs can lack awareness of the benefits of participating in national credit bureaus, and their borrower records and reporting systems may not yet meet the reporting requirements of a credit bureau.

**Many Arab countries are undertaking payment system reforms,** often supported by the Arab Payment Initiative (World Bank, Arab Monetary Fund, IMF).  Countries are working to improve the legal framework, payment system oversight, and introduce real time gross settlement systems (RTGS), well-functioning automated clearing houses (ACH), and switching systems for connectivity between banks and card providers. The process in Egypt, as an example, is ongoing, with an RTGS and ACH established, and with full functionality being introduced in stages, for example to enable direct deposits, direct debits, mobile phone payments and extend financial inclusion.

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