Libya’s banking sector compares favourably to some of its neighbours. For example, as of June 2021 over 65.7% of Libyans had financial accounts; as of February 2022 over 81% lived in urban areas and therefore had access to financial services, while 49.6% were active internet users. In comparison, the banking and internet penetration rates in neighbouring Egypt in 2022 were 60.6% and 72.2%, respectively. An estimated 80.7% of Libyans accessed the internet through mobile devices in 2022, compared to 18.6% through laptops and desktop computers.
The country’s financial landscape is evolving, and it may undergo further changes as it rebuilds. For example, the banking sector faces a number of obstacles as it seeks to modernise its financial infrastructure and attract foreign investment, since legal frameworks and infrastructure networks are unable to support more bankable projects. There are several reasons to be optimistic about the future. The country has the potential to become an attractive destination for investment, particularly when it comes to infrastructure development and energy. However, sustained efforts by the government to improve transparency, governance and technical competencies in the sector will be crucial to realising this potential.
The CBL is taking steps to transform Libya into a cashless economy to address the role of cash in people’s lives, with an estimated 30% of physical currency outside the banking system as of 2018. During the National Payments Council’s second meeting of 2023, the CBL discussed several measures to digitalise payment systems. These included adopting unified national specifications for electronic payment cards with EMV technology, the chipbased system developed by Europay, MasterCard and Visa. Doing so would allow for accounts to be opened remotely and increase the efficiency of the national network for payments through the Libyan Post, Telecommunications and Information Technology Holding Company.
Another topic discussed during the meeting was the digitisation of bank cards in order to enable mobile payments at points of sale, as well as the implementation of instant payment, electronic know-your-customer and open banking services. Libya’s national distributor operator and telecommunications companies will play a critical role in the completion of this ongoing work. The CBL is intent on providing digital banking services that are easy to use and secure. In addition, the national payment system is expected to reduce Libyans’ dependence on cash, as well as encourage the wider use of banking applications and digital payment programmes on mobile phones at points of sale in shops, markets and various service facilities. The move towards digital payments is expected to make financial transactions more straightforward and secure.
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