Yemen
Yemen is located in the southwestern corner of the Arabian Peninsula, bordered by Saudi Arabia to the north, Oman to the east, the Arabian Sea to the south, and the Red Sea to the west. The country spans an area of 527,968 square kilometers, making it the 49th largest country in the world. Yemen has a population of around 31 million people, with Sana’a, the capital, being the largest city and the cultural and historical heart of the nation. Yemen is a republic with a complex political history, and it has faced significant political and economic challenges, particularly since the outbreak of civil conflict in 2015. The war has caused widespread humanitarian crises, significant infrastructure damage, and a breakdown in governance. Despite these challenges, Yemen remains strategically important due to its location and natural resources. The economy of Yemen is primarily based on oil exports, which constitute the largest source of revenue. However, the ongoing conflict has severely impacted production and infrastructure, leading to economic decline. Agriculture, particularly coffee and qat production, also plays a role in the economy. Yemen’s financial sector, once relatively underdeveloped, has faced severe disruption due to the conflict, but efforts are underway to stabilize and rebuild.
Top banks
Yemen’s banking sector has been severely affected by the ongoing conflict, with many banks operating under difficult conditions. The Central Bank of Yemen (CBY) is the country’s central monetary authority, responsible for regulating and overseeing the financial system, managing currency issuance, and formulating monetary policy. The country’s banking system includes both state-owned and private banks, with state-owned institutions playing a dominant role.
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Yemen Commercial Bank (YCB)
One of the largest banks in the country, Yemen Commercial Bank offers a wide range of banking services, including personal and corporate banking, loans, and foreign exchange services. The bank has a strong presence and plays a key role in financing economic activities, especially in a conflict-affected environment.
Al Amal Microfinance Bank
Al Amal Bank is Yemen’s first microfinance bank and is focused on providing financial services to low-income individuals and small businesses. The bank offers microloans, savings products, and other financial services designed to promote financial inclusion.
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Central Bank of Yemen (CBY)
As the central authority, the CBY is responsible for regulating Yemen's financial system, overseeing monetary policy, and issuing the national currency. The bank has faced significant challenges due to the ongoing conflict but continues to manage Yemen’s currency and foreign exchange operations.
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National Bank of Yemen (NBY)
A state-owned bank, the National Bank of Yemen provides a variety of financial services, including savings and checking accounts, loans, and foreign exchange. It is one of the leading banks in the country and plays an essential role in financing both private and public sector projects.
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Arab Bank for Investment and Foreign Trade (ABI)
This bank focuses on providing corporate banking services, including loans, foreign trade financing, and investment services. ABI plays a key role in facilitating Yemen’s trade activities, especially in international markets.
Top payment methods
Yemen’s payment system has been heavily affected by the ongoing conflict, and many traditional payment methods are still widely used, particularly cash. However, mobile payments, remittances, and digital financial services are slowly gaining traction, especially in urban centers. The lack of infrastructure and the conflict have made it challenging to implement a modern financial system, but there are growing efforts to improve access to banking and payment services.
Concluding remarks
Yemen’s payment system remains largely cash-based, with limited digital and electronic payment options available to the general population. The ongoing conflict has made it difficult to modernize the country’s financial infrastructure, but mobile payments and remittance services have become vital tools in facilitating financial transactions. Mobile money services, in particular, have helped improve financial inclusion, especially in rural areas where access to traditional banking is limited. As Yemen moves toward stabilization, the payment landscape is likely to evolve, with mobile and digital payment methods becoming more widespread. While cash will continue to play a dominant role for the foreseeable future, mobile money services and digital wallets are expected to expand, providing greater access to financial services for underserved populations in the country. The rebuilding of Yemen’s financial sector will be a long process, but increased access to digital financial services and greater financial inclusion may play a critical role in the country’s recovery and economic development.
Cash
Cash remains the most commonly used payment method in Yemen, especially in rural areas and for small transactions. Due to the ongoing conflict, many areas have limited access to banking services, and cash is the preferred method of payment. Cash is widely accepted, particularly in informal markets, and is used for most day-to-day transactions.
Debit and credit cards
Debit and credit cards are accepted in certain businesses, particularly in urban centers like Sana’a, Aden, and Taiz. However, card payments are still limited, and card penetration remains low due to the lack of widespread banking infrastructure. Some larger businesses and government institutions may accept card payments, but usage is not widespread.
Mobile payments
Mobile payments have gained significant traction in Yemen, especially in the wake of the conflict. Mobile money services like MTN Mobile Money and Yemen Mobile allow users to transfer money, pay bills, and make purchases via their mobile phones. These services are particularly important in Yemen, where access to traditional banking services is limited, and mobile phones are widely used. Mobile money is a crucial tool for promoting financial inclusion, especially in rural areas.
Digital wallets
Digital wallets are still in the early stages in Yemen but have seen some growth due to mobile money services. Platforms like MTN Mobile Money and Yemen Mobile provide digital wallet services, allowing users to store money on their mobile phones and make payments without needing a bank account. These services are particularly useful in areas with limited access to formal banking infrastructure.
Online banking
Some of the major banks in Yemen offer online banking services, allowing customers to manage their accounts, transfer funds, and pay bills via the internet. However, internet access is still limited in certain areas, and the adoption of online banking services remains low compared to other countries. Online banking services are primarily used by individuals with regular internet access, which is more common in urban centers.
Point of Sale
Point of Sale systems are limited in Yemen and are mostly found in larger businesses and shops in urban centers. These systems allow businesses to accept debit and credit card payments, helping to reduce the reliance on cash. However, POS adoption is still limited in smaller businesses and rural areas.
Remittances
Remittances play a significant role in Yemen’s economy, with many Yemenis working abroad, particularly in Saudi Arabia, the UAE, and other Gulf states. Remittances sent home from overseas workers are an essential source of income for many families. Money transfer services like Western Union, MoneyGram, and Al-Amal Exchange are widely used to send money back to Yemen. Remittances are especially important due to the weakened domestic economy and ongoing conflict.
Cryptocurrency
Cryptocurrency use in Yemen is still very limited, and there is no clear regulatory framework for digital currencies. While some individuals may show interest in cryptocurrencies like Bitcoin as a hedge against currency devaluation or for investment, the adoption and use of digital currencies are minimal. Cryptocurrencies are not widely accepted for everyday transactions.
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