Child Development Accounts in Jordan: Towards Innovative Social Policies for Economic Development

Abstract

This paper examines a prospect scenario of adopting Child Development Accounts (CDAs) as a social welfare innovation in Jordan. CDAs are considered as an asset-building policy aimed at enhancing financial inclusion and socio-economic well-being. This paper discovers the feasibility of CDAs that have proven successful in several countries, as their potential in Middle Eastern countries, particularly in Jordan, remains unexplored. The application of CDAs in the social welfare system aims to support sustainable asset accumulation and improve the living standards of diverse segments in Jordan by integrating CDAs within the efforts made by Jordan to achieve financial inclusion, alleviate poverty, and supplement household income through asset development. There are opportunities to implement the program in Jordan, including expanding the scope of microfinance, public–private partnerships, and targeted programs for women, youth, and refugees. However, several challenges may hinder its application, including limited financial literacy, high unemployment rates, income inequality, regulatory obstacles, and difficulties in implementing social reforms. The paper contributes to the debate on social welfare policies adopted in developing countries by providing solutions based on global practices in CDA execution and has implications and recommendations for decision makers to achieve economic development. Future research in Middle East and North Africa (MENA) countries should target pilot projects and comparative studies to refine CDA strategies.

1. Introduction

Child Development Accounts (CDAs) refer to specialized savings or investment mechanisms created for children and are often intended to be accumulated for purposes such as educational purposes, owning a home, entrepreneurial expansion, or other life goals for the child as he or she grows older. These accounts are part of an asset-based social welfare policy that aims to promote financial inclusion, economic opportunity, and long-term asset development, especially for low- and middle-income families (Huang et al. 2014). The theoretical foundation and initial policy proposal for CDAs were first articulated by Sherraden, who, in his book Assets and the Poor, introduced the idea of providing all children with an account at birth to promote asset accumulation, a policy concept that had not been present prior to his work (Sherraden 1991). The vision for CDAs has been to establish a universal and progressive policy focused on fostering long-term asset building for everyone (Goldberg et al. 2010). Recent legislative efforts in the United States, such as the CDA provision in H.R. 1 (One Big Beautiful Bill Act), reflect growing federal interest in expanding child savings accounts nationwide (McDermott 2025). By providing children with the right financial foundation early in life, CDAs can enable them to achieve important milestones as they grow. Additionally, these accounts play a critical role in reducing intergenerational poverty and enhancing their access to educational and economic opportunities, while also contributing to the development of both human and economic capital. The important policy lesson is that asset building is more impactful than saving behavior (Sherraden 2018). CDAs are characterized by key features that make them a versatile and effective tool in advancing financial security, human capital, and social equity (Huang et al. 2020; Shanks 2014). They primarily target economically disadvantaged or marginalized groups, aiming to reduce wealth inequality and foster upward mobility (Beverly et al. 2015). Withdrawals from CDAs are typically limited to specific purposes, such as education, health care, and retirement, ensuring that the funds are used to support long-term development goals (Sherraden et al. 2016). Furthermore, CDAs represent a policy framework that emphasizes universal access, progressive financing mechanisms over time, and equal opportunities for all children (Goldberg et al. 2010; Kim et al. 2017). The success of CDAs lies in key components: structured accounts for long-term asset growth, sustainable funding combining government, NGOs and community support, and financial education for parents and children. Programs link CDAs with social policies like poverty reduction, increasing equity and enhancing financial inclusion, backed by strong governance (Meyer et al. 2010). By combining these features and components, CDAs serve as a powerful vehicle for promoting economic security and empowering children to achieve their full potential.

CDAs have been successfully implemented in major countries such as the United States, Canada, and Singapore, demonstrating their ability to promote financial stability, improve educational outcomes, and economically empower individuals (Butrica 2015; Sherraden et al. 2016). Some Arab countries rich in gas, oil, and mineral resources, such as certain Gulf nations, have also adopted similar applications developed by their governments, relying on national reserve funds to secure natural resource revenues for future generations and allocate a portion of those revenues to the welfare of citizens (Huseynli 2023). However, the application of such policies in neighboring Middle Eastern countries, particularly in Jordan, remains largely unexplored.

Jordan’s unique demographic, social, and economic landscape characterized by a high youth population, economic inequality, low financial literacy rates, and a high number of refugees presents both challenges and opportunities for implementing CDAs. Nearly all children in Jordan have access to primary education (Benson 2020). However, dropout rates remain a concern at the secondary and tertiary levels, partly because of problems with behavior and social skills, a lack of motivation to perform well in school, and weak support systems at home or at school (Abbas 2012; Rababa and Al-Momani 2022). This issue persists even though Jordan has a high rate of tertiary education with a gross rate of tertiary enrollment at 34% in 2018; this is above-trend given its level of GDP per capita (O’Brien et al. 2022). Additionally, Al Husban (2025) notes that the gross enrollment rate increased from 19% in 2000 to 40% in 2020. However, despite these improvements in enrollment, Jordan remains a modest performer in terms of knowledge infrastructure, which refers to the changing social and technical systems, made up of tools, institutions, and networks, that help knowledge be created, shared, and used across fields and sectors (Karasti et al. 2016). According to the United Nations Development Programme (UNDP 2024), the country ranks 103rd out of 154 in the Global Knowledge Index (GKI),1 with a GKI score of 42.5, compared to a global average of 48.4.

This paper aims to assess whether a CDA framework tailored to Jordan’s specific context can be designed and implemented successfully, addressing potential barriers and proposing innovative solutions. In the following sections, the paper begins with a comprehensive background and context that outlines both the theoretical foundations and global perspectives on Child Development Accounts (CDAs), while also providing an in-depth analysis of the Jordanian context—including its economic conditions, social challenges, and financial infrastructure. Next, we examine the implementation of CDAs in Jordan by evaluating how these asset-building policies can be adapted to the nation’s unique environment, addressing potential challenges, and identifying opportunities for success. The subsequent discussion integrates policy implications and innovative contributions. Finally, the conclusion synthesizes the key findings, presents concrete policy recommendations, and provides a final summary of the study.

2. Materials and Methods

This study relied on secondary data sources to assess the feasibility of implementing Child Development Accounts (CDAs) in Jordan. The analysis drew on official reports and publications from institutions such as the Department of Statistics in Jordan, the Central Bank of Jordan, and international organizations like the World Bank and UNDP. These sources provide essential insights into Jordan’s economic conditions, financial inclusion landscape, and social welfare policies. Additionally, relevant policy documents and government strategies were examined to understand the current framework of social assistance programs and their potential integration with asset-building initiatives. This study adopted a structured approach to reviewing existing data, ensuring a comprehensive evaluation of the economic and social context in which CDAs could be implemented.

3. Background and Context

3.1. Theoretical Underpinnings and Global Perspectives

Some global programs for kids focus on social development goals, while others focus on teaching kids how to save money, and this influence has led to an increase in the importance of children’s accounts among federal policy makers (Cramer 2010). In this case, “social development” refers to a planned process of change that improves well-being, reduces inequality, strengthens social ties, and makes it easier for people to get education, health care, jobs, and social protection (Mohamed et al. 2020). Child Development Accounts (CDAs) have been extensively researched as an asset-building policy aimed at improving financial inclusion and long-term socio-economic well-being. Several studies have examined the theoretical foundations of CDAs, linking them to asset-based welfare models (Sherraden et al. 2015; Elliott et al. 2011). CDAs have been adopted in various countries, such as The United States, Singapore, the United Kingdom, Canada, Korea, and elsewhere (Meyer et al. 2010; Huang et al. 2019). According to Zou and Sherraden (2022), more than 15 million kids around the world have saved money in CDAs by 2022. Similarly, Nam et al. (2013) found that CDAs have positive effects on children’s ability to save money and build up their assets for future growth.

In the United States, the Saving for Education, Entrepreneurship, and Downpayment (SEED) program was started in the US with private funding (Cramer 2010). Nam et al. (2013) examined the impacts of CDAs on children’s ability to open accounts and build up their assets using data from the SEED for Oklahoma Kids experiment, a policy initiative that the State of Oklahoma, the Center for Social Development, and RTI International all worked on together. It provides a 529 college savings plan account to every infant in the treatment group, with automatic account opening and an initial deposit. The 529 college savings plan is a tax-advantaged investment vehicle designed to encourage saving for future education expenses, making it a key component of many CDA programs in the United States. These plans are referred to as “529 plans” because they were established under Section 529 of the Internal Revenue Code (Heim and Winecoff 2023). Clancy et al. (2015) examined the role of 529 college savings plans in CDAs, highlighting their potential to build assets for disadvantaged children. They emphasized that automatic enrollment, deposits, and continuous contributions ensure inclusiveness and support long-term educational and economic outcomes. Clancy et al. (2005) explored the pros and cons of using 529 savings plans to make sure that as many Americans as possible can attend college or university after high school. The 529 savings plans provide a structured savings platform with several beneficial features, creating an opportunity to use the 529 accounts system as a foundation for a more inclusive savings policy. While each state is responsible for designing its own 529 plan, all plans offer key benefits, including public sector monitoring that allows for incentives and coordination with additional legislative efforts, centralized accounting duties for better management, a limited number of investment options to make decisions easier, and a way for large and small accounts to share costs (Clancy et al. 2005; Curtis 2020; Heim and Winecoff 2023).

In 2019, Pennsylvania launched a CDA program that invests USD 100 in an education savings account for every child born in the state. Bouchelle et al. (2024) assessed barriers and facilitators of uptake in these communities. They surveyed 100 caregivers of Medicaid-insured children from two primary care practices serving a predominantly low-income community. In interviews, caregivers identified several factors that facilitated participation in the CDA program. These included simplified enrollment, access to more personalized program information, clinic- and community-based outreach, and increased investment amounts. However, low-income caregivers identified several barriers to participation in the statewide CDA program, including a lack of knowledge and use of clinic-based financial counseling, which they thought could be a way to encourage more people to sign up.

Singapore is one of the countries that has initiated the CDA, and there are studies that have looked at how Singaporeans save in the program. It is known for its forward-thinking, inclusive, and generous lifelong policy (Karuppiah and Poon 2021). CDAs in this country are specifically designed to be fully integrated into an wealth-building social framework that extends throughout a child’s life to promote human capital development during the first decades of a child’s life (Sherraden et al. 2016). Han and Chia (2012) empirically examined how low-income households have participated and saved in the CDA in Singapore. Their study found that parents who are aware of the savings plan in the Child Development Account are more likely to have higher views on the importance of a child’s education and to adopt more positive attitudes towards saving. Their analyses found that parents who prefer automatic enrollment in the CDA are more likely to save more in these accounts. Additionally, parents who view automatic payroll deductions positively tend to save more in the Child Development Account. For poor families in Singapore, a program like Edusave provides an important and necessary income for a child to secure their future education (Goh and Kuczynski 2022).

There are several studies that have demonstrated Singapore’s early interest in the child and his or her future (Tonsing and Ghoh 2019; Sun 2012; Tonsing 2024). According to Loke and Sherraden (2009), in their study on a global comparison of countries’ CDA adoption policies, Singapore’s Edusave scheme is the world’s first comprehensive child asset building program. Implemented in 1993, it benefits school-going children where each child can expect to receive SGD 4000 in their Edusave account over ten years of schooling. The initiative draws its financing from the returns generated by the SGD 5 billion Edusave Endowment Fund, which was set up by the government using state resources to support educational objectives. In addition, in 2001, the Singapore government introduced the Baby Bonus program as part of the government’s overall efforts to increase fertility rates and create an environment conducive to raising a family (Loke and Sherraden 2009).

Among the other countries that implemented CDAs is the United Kingdom. The Child Trust Fund was implemented in the UK in 2005 as a new long-term savings and investment account for children born in or after 2002, and the objectives of this policy were to help people understand the benefits of saving and investing, and to encourage parents—and even their children—to develop a habit of saving and to engage with financial institutions to ensure that all children have financial assets to secure their future (Loke and Sherraden 2006). Under the policy of the Child Trust Fund in the United Kingdom, every child born in the United Kingdom receives a savings account each year, where the fund’s system issues vouchers to families of newborn children to deposit in participating financial institutions. This account is opened even if the families do not do so within a year of the child’s birth, so that the account is opened in a random institution and the family is informed of the place where the account is deposited (Cramer 2010). What distinguishes this program from those in other countries is the fund’s account policies, as no restrictions are imposed on withdrawals once the child reaches the age of eighteen years. This policy is considered an incentive for saving. This differs from children’s accounts offered in other countries such as the United States, where account holders may even face penalties if they use their funds for purposes other than the specified ones, which include education and post-secondary training, retirement security, or homeownership (Cramer 2010). According to Sherraden et al. (2016), the UK is the only country that allows withdrawals and use of funds for any purpose, compared to other developed countries such as the USA, Canada, South Korea, and Singapore. This unrestricted access, which is evident in the UK’s Child Trust Fund program, provides young adults with the freedom to take money out when they turn 18 years old, offering a chance to watch how assets are used. This UK program demonstrated how CDA programs can help build children’s financial assets and enable them to access higher education, with total assets reaching USD 12 billion by 2020 (Zou and Sherraden 2022).

Canada is also one of the countries that focuses on early childhood development. CDAs in Canada are centered on education and are called Registered Education Savings Plan (RESP) accounts, offering families an incentive to open an account and save for their children’s post-secondary education. Launched in 1998, the Canada Education Savings Grant provides a government contribution equal to 20% of the annual deposits into an RESP, up to a maximum of CAD 500 per year. Following that, the Canada Learning Bond program was introduced in 2005 to support low- and middle-income families through an initial deposit of CAD 525 when opening a RESP account, and these public deposits do not rely on personal contributions, along with annual deposits of CAD 100 for up to 15 years (Sherraden et al. 2016). There was evidence that the status of early childhood development in Canada was declining as economic and social pressures on families increased (Hertzman 2009). However, three million children had an RESP account and received money through the Canada Education Savings Grant in 2020 (Zou and Sherraden 2022).

South Korea is also among the countries that have incorporated CDAs into their national policies to support child development. “Korea’s experience with CDAs also has important implications for other countries” (Nam and Han 2010). In 2007, the Korean Ministry of Health and Welfare introduced the Community Development Policy as part of its efforts to enhance human capital, offering financial education to underprivileged children through dedicated savings instruments known as “Didim Seed Savings Accounts” (Nam and Han 2010). The Korean government matches family deposits of up to KRW 50,000 (USD 41) per month, allowing them to contribute regularly as part of the savings initiative. When children reach the age of 18 years, they are allowed to withdraw funds for specific purposes such as education, health, and other designated uses (Zou and Sherraden 2022). This policy helped establish Korean National Community Development Program, which includes people in the child welfare system who are 17 years old or younger, in addition to its goal of including half of newborn Koreans. As of the end of 2019, approximately 80,800 Korean children owned these accounts. This has a direct impact on young people, as when they reach the age of eighteen years, they have money for their life needs such as education, health, etc. (Zou and Sherraden 2022). Figure 1 presents a near-global overview of the structural framework for Child Development Accounts (CDAs), outlining their funding sources, allocation mechanisms, key investment sectors, and expected short- and long-term outcomes.

In addition,

Table 1. Overview of established child development account (CDA) models and key features.

Country	Eligibility and Registration	Public Contributions	Matching Contributions	Withdrawal and Use of Funds	Enrollment Approach	Outcomes
United States (USA)	Several states, including California, Connecticut, Illinois, Maine, Nebraska, Nevada, Pennsylvania, and Rhode Island, have adopted CDA policies that provide inclusive eligibility for all children. Registration is typically handled using a modified 529 college savings plan framework, which ensures that disadvantaged households are included. Meanwhile, a new federal program (H.R.1) suggests universal coverage by automatically creating accounts for every child under the age of eight years.	These policies include public contributions in the form of direct subsidies, which help to overcome savings barriers, particularly for low-income children. A recent federal initiative allows for annual tax-advantaged contributions up to USD 5000.	Traditional matching contributions are not included; instead, the model relies on direct public subsidies to support asset building.	Withdrawals from CDA accounts follow the federal 529 framework, with funds allocated primarily for postsecondary education expenses. Additionally, a new federal program permits withdrawals for partial access between the ages of 18 and 25 years, business startup expenses, first-time home purchases, and vocational training.	Opt-out (Automatic enrollment with public subsidies).	CDAs in USA helped kids, especially those from low-income families, own more accounts and build up their assets.
United Kingdom (UK)	For children born on or after 1 September 2002, their parents receive a voucher to set up a private Child Trust Fund account, which is automatically opened if not activated within one year.	At account opening and again at age 7 years, GBP 250 is provided. Low-income children receive an extra USD 250 at both times.	None.	A young person can withdraw money for any purpose when they reache the age of 18 years.	Opt-out (Automatic account opening if not activated within one year, with public contributions).	The UK’s unrestricted withdrawals at age 18 years provided insight into asset–use behavior, with total CDA assets reaching USD12 billion by 2020.
Singapore	Singaporean children are generally covered by these programs—some require parental application at birth (e.g., Baby Bonus Cash Gift and Baby Bonus CDA), while others are automatically enrolled (e.g., Edusave for primary/secondary students, Post-Secondary Education Account (PSEA) for children aged 7–20 years, and Medisave upon birth registration).	Programs provide direct public contributions, including lump-sum cash gifts (SGD 8000 for the first two children and SGD 10,000 for subsequent ones under the Baby Bonus) and specific grants (SGD 3000 for the Baby Bonus CDA, annual amounts for Edusave, variable contributions under the PSEA, and a SGD 4000 Medisave grant).	Matching contributions are available in some programs; for example, the Baby Bonus CDA and the PSEA both provide full public matching contributions, but the lifetime limits are different for each program and range from SGD 6000 to SGD 18,000. Other programs, such as the Baby Bonus Cash Gift, Edusave, and Medisave, do not include matching funds.	Withdrawals are restricted to designated purposes: the Baby Bonus covers newborn expenses; the Baby Bonus CDA for childcare, early intervention, education, and healthcare up to age 12 years; Edusave funds for educational enhancement; PSEA funds for postsecondary education expenses; and Medisave funds for qualified healthcare expenses and insurance.	Mixed (Some programs are opt-in, while others are opt-out with public contributions and matching funds for specific purposes).	Singapore’s integrated approach encouraged parents to have positive attitudes toward education and to save money.
Israel	Every newborn resident, including Jews, Palestinians, and other groups, automatically receive an account when they are born.	A monthly deposit of ILS 50 is made, with parents having the option to contribute an additional ILS 50 deducted from the child benefit payments.	There are no matching contributions, but young adults who keep their money in the account until they turn 21 years receive a total bonus of ILS 1000. This is awarded as 500 at the age of 18 years and another 500 at the age of 21 years.	Young adults can access their money with their parents’ permission when they turn 18 years old, but they cannot do it on their own until they turn 21 years old.	Opt-out (Automatic account creation with public contributions and a bonus for long-term saving).	The CDA program has helped all kids save money and build wealth, setting the stage for government-backed savings programs that are open to everyone.
Korea	Eligibility is limited to children participating in social welfare programs or whose families depend on government social welfare assistance, and submitting an application is a prerequisite.	NONE. Korean children unable to save can apply for support from Korea’s National Welfare Council.	A full match capped at KRW 30,000 (about USD 21) each month.	Young adults can use the money for things like education, vocational training, housing, starting a business, healthcare, or getting married when they turn 18 years old.	Opt-in (Requires application, with matching contributions for eligible children).	Didim Seed Savings in South Korea helped low-income young people save money for school and health care. By 2019, there were more than 80,000 active accounts.
Canada	Individuals may open an Registered Education Savings Plan (RESP) for any Canadian, but an application is required to access the funds.	Canadian children from low- and moderate-income families receive an initial grant of CAD 525 through the Canada Learning Bond program upon the establishment of an education savings plan, in addition to annual contributions of CAD 100 that continue for an extended period, up to a maximum of 15 years.	Families receive a government contribution equal to 20% of their annual deposits, up to CAD 2500, through the Canada Education Savings Grant. Also, families with lower or middle incomes may be able to receive an extra match of 10% to 20% for the first CAS 500 they save. The most money a child can receive from this program is CAD 7200 over their whole life.	Postsecondary education expenses of child.	Opt-in (Requires application, with government matching contributions for education savings).	More than 3 million kids in Canada had RESP accounts that were supported by government grants. This made it easier for them to attend college.

Source: (Sherraden et al. 2016; Zou and Sherraden 2022; McDermott 2025).

presents the nature of CDA contributions, eligibility and registration, as well as the withdrawal and use of funds, which highlights the focus and restrictions that countries have considered in applying CDAs.

3.2. The Jordanian Context

Jordan’s economic and social landscape is characterized by a mix of challenges and opportunities that shape its development policies. Economically, Jordan is classified as a lower-middle-income country with modest GDP growth rates historically in the range of 2–3% per year, with the country maintaining a steady average growth rate of 2.5% over the past decade (World Bank 2024b). This slow growth is partly due to several reasons, the most important of which are regional instability and external shocks in neighboring countries, which have negatively impacted travel and tourism and upended important export industries (O’Brien et al. 2022). Along with its long history of sheltering refugees displaced by wars, Jordan has recently hosted more than 1.3 million Syrians since 2011 due to the ongoing internal conflict (World Bank 2024b). In addition to structural challenges such as high public debt, Jordan’s economic performance has grown increasingly dependent on external factors. According to Tzannatos and Saif (2023), this is due to the increasing dependence on international support, as the real GDP per capita peaked in the early 1980s but has sharply declined since then and into the early 2000s as a result. Inflation has also been relatively stable, but rising global food and energy prices affect household budgets, especially for low-income families. According to the World Bank (2024a), real consumption in Jordan is influenced by changes in the cost of living resulting from inflation or deflation caused by the global crisis. Additionally, unemployment remains a highly pressing issue in Jordan, particularly among youth. According to the Department of Statistics (DOS 2024a), the unemployment rate exceeded 21.5% in the third quarter of 2024, accounting for nearly a quarter of the workforce, with women being the most affected. The high youth unemployment rate, coupled with rapid population growth, places significant pressure on the labor market and public resources. Figure 2 shows the most prominent social problems Jordan faces.

A social problem is an issue that has a negative impact on a large portion of society and must be addressed collectively. Hilgartner and Bosk (1988) defined a social problem as a condition or situation perceived as problematic in public discussions and addressed through government action. However, in terms of objective conditions within society, a social problem has a key flaw in that it ignores the fact that identifying a social condition as a social problem requires subjective judgment (Best 2017).

Persistent economic challenges in Jordan, such as high unemployment rates, increased out-of-pocket health care spending, and low enrollment in higher education, are among the major social concerns affecting long-term growth. Despite a slight decrease in unemployment over the past three years, unemployment in Jordan has worsened overall, rising from 13% in 2015 to 21.5% in 2024. This trend reflects economic stagnation and limited job opportunities, particularly for young people, women, and refugees. Figure 3 presents Jordan’s annual unemployment rate from 2015 to 2024.

Out-of-pocket health expenditures, which refer to direct payments made by individuals for medical services without compensation, have also increased globally (World Health Organization 2025). In Jordan, these expenses accounted for 21% of total health spending in 2011, rising to 37.5% in 2021, placing additional financial pressure on households and limiting access to essential health care services (World Bank 2024c). Similarly, enrolment in tertiary education has declined, falling from almost 44% in 2014 to 33% in 2022 (Trading Economics 2025). Figure 4 presents the number of children aged 0–14 years from 2005 to 2024, categorized into three age groups as follows: 0–4 years, 5–9 years, and 10–14 years. This figure highlights the significant growth in the number of children aged 0–14 years over the past two decades.

Jordan’s financial infrastructure has developed significantly over the years, evolving to support a growing economy and expanding financial inclusion. The banking sector, which includes a mix of commercial banks, Islamic banks, and microfinance institutions, forms the backbone of the nation’s financial system. The Central Bank of Jordan (CBJ) plays a pivotal role in regulating these institutions, ensuring financial stability, and overseeing monetary policy.

Alongside traditional banking, digital financial services have rapidly expanded, evidenced by the widespread adoption of mobile wallets, online banking, and digital payment systems. For example, the adoption of e-FAWATEERcom, a national electronic bill payment system, facilitates utility, government, and private-sector payments. Alibraheem et al. (2023) examined the use of Jordan’s internet-based billing and payment system, e-FAWATEERcom, and evaluated its acceptance. Fintech (a new financial industry that applies technology to improve financial activities) plays a significant role in driving digital development by offering innovative solutions that enhance financial inclusion and streamline transactions (Schueffel 2016). This is evident in studies exploring the impact of financial technology on digital advancement in Jordan. For instance, Al-khawaja et al. (2025) found a statistically significant impact of FinTech, such as payment and credit services, in enhancing digital services in Jordan. It has succeeded in increasing citizens’ reliance on mobile wallets reliance on mobile wallets such as Zain Cash, Orange Money, and Dinarak to conduct financial transactions, as mobile wallets are considered digital safes on mobile phones where users can store money that they can later issue as payments, money transfers, or cash withdrawals (Dhawan et al. 2021). According to Ajina et al. (2023), by the end of 2022, Jordan had approximately 2 million mobile wallets. However, usage levels differ significantly by demographic group. In 2022, only 23.3% of people between the ages of 15 and 24 years made or received a digital payment. This is less than half of the adults aged 25 years and up who did (CBJ 2023).

The Jordanian government has consistently strived to improve access to financial services through various programs aimed at ensuring all segments of Jordanian society can access financial services. Initiatives such as the National Financial Inclusion Strategy (NFIS) 2023–2028 by the Central Bank of Jordan have been instrumental in extending financial services to underserved segments, including women, youth, rural populations and refugees. This strategy aims to leverage inclusive financial services to stimulate economic activity among marginalized groups in Jordan. In particular, the NFIS seeks to increase adult account ownership from 43.1% in 2022 to 65% by the end of 2028 and to boost the adult saving rate in formal financial institutions from 4.3% to 10% during the same period. However, women in Jordan face significant financial inclusion gaps for account ownership and digital payment usage, largely due to lower income levels compared to men. The rate of account ownership in 2022 was 53.1% for men and 31.0% for women, with 22.1% gap. NFIS aimed to reduce the gender gap from 22% in 2022 to 12% in the end of 2028 (CBJ 2024). Despite these development efforts, significant challenges remain in achieving full financial inclusion. Rural disparities continue to hinder access to banking services, and a large portion of the population remains unbanked due to low levels of financial literacy. As of 2016, merely 24% of Jordanians possessed a basic understanding of financial concepts, and only 15% were more financially literate (Alkhawaldeh et al. 2023). Additionally, while digital financial solutions are expanding, there is still a gap in the adoption of these services among older individuals and those with limited technological proficiency. Only 54% of young people aged 15 to 24 years have an account with a financial institution or a mobile money provider, compared to 68% of adults aged 25 years and above (Alqam and Hamshari 2024).

In addition, programs such as the “JoPACC Financial Inclusion Initiative” aim to empower marginalized segments, including women, youth, and refugees, through financial literacy training and access to tailored financial products. JoPACC, established in 2017 as a private shareholding company owned by the Central Bank of Jordan and all commercial banks in Jordan, operates five payment systems: ECC, ACH, JoMoPay, eFAWATEERcom, and the Instant Payment System (CliQ) (Aljaafreh et al. 2022). It aims to enhance financial inclusion by developing innovative digital financial solutions and supporting financial technology innovations in Jordan by improving electronic payment systems (Aljaafreh et al. 2022). Alrabei et al. (2022) found that the mobile payment system plays an important role on increasing the financial inclusion rates in Jordan.

Despite progress, several challenges hinder broader financial inclusion in Jordan. There is a low level of financial literacy in Jordan, meaning that many Jordanians lack the knowledge to effectively use financial services. for example, microenterprises in Jordan may be less familiar with the conditions and benefits of such products, which is related to lower financial literacy levels (GIZ 2023). Also, limited MSME (Micro-, Small, and Medium Enterprise) financing is evident in a survey by the CBJ and GIZ, which found that as the enterprise size increases, financial inclusion improves. However, a “missing middle” exists for loans between JOD 10,000 and 100,000, which are too large for microfinance institutions and too small for commercial banks (GIZ 2023). Furthermore, refugee integration in the financial system remains a challenge. Although efforts are underway, many refugees remain outside the formal financial system due to regulatory and practical barriers (Lenner and Turner 2019). For instance, Syrian refugees rely more heavily on hawala (an unregulated money transfer system using passcodes and personal delivery) (Tobin 2024).

Socially, Jordan faces significant challenges related to income and asset poverty, inequality, and geographic location (e.g., rural vs. urban). A considerable portion of the population lives below the poverty line, and income disparities are further exacerbated by regional inequalities between urban centers, such as the capital Amman, and rural areas. The latest available data on income inequality measured by the Gini coefficient dates back to 2010, with a recorded value of 33.7% (UNDP 2015). In this context, Jordan ranked 43rd out of 164 countries, leading the Arab nations in the Commitment to Reducing Inequality Index (CRII) for 2024 (Jordan Strategy Forum 2025). According to estimates from the Household Income and Expenditure Survey (HIES) in 2010–2011, the national poverty rate was 14.4%, and by 2019, the Jordanian government announced that this rate had risen to 15.7% (World Bank 2020). Figure 5 shows the national poverty rate in Jordan from 1997 to 2024.

Furthermore, Jordan deals with health, migration, and an aging population, and the financial burden on households continues to rise. While healthcare services are available, gaps in coverage expose families to unexpected medical costs. According to the International Labour Organization (ILO), the percentage of health insurance subscribers in 2023 reached 56.8%, meaning that nearly half of citizens and non-citizens in Jordan bear the costs of their own treatment, which puts great pressure on a group such as the elderly (ILO 2024). In addition, there are a large number of Jordanians who emigrated due to economic pressures or for other reasons. There is a significant number of Jordanians living abroad, with about 10% of Jordanian citizens (about 800,000 persons) living abroad (Jarrar 2021). This demographic shift has led to a growing number of elderly people living alone, especially as many younger family members migrate abroad. In response, the National Council for Family Affairs, in cooperation with national and international institutions, is implementing the National Strategy for the Elderly 2025–2030 to address health, social, and developmental needs (UNESCWA 2024).

4. Potential, Opportunities, and Challenges in Implementing CDAs and Other Policies in Jordan

Social policies in Jordan play a fundamental role in addressing current social and economic challenges. Jordanian government has implemented several social programs aimed at providing targeted support to low-income families and alleviating poverty, such as the National Aid Fund which was established in 1986, in addition to facilitating access to essential services (Al-louzi 2013). Furthermore, approximately one in three residents in Jordan is covered by at least one form of social protection. In 2021, this coverage was estimated at 34.1%, up from 33.4% in 2020 (DOS 2023). According to Kawar et al. (2022), social protection is defined in accordance with the International Labour Organization as “the set of policies, programs and schemes (contributory and noncontributory) designed to reduce and prevent poverty and vulnerability throughout the life cycle, including benefits for children and families, maternity, unemployment, employment injury, sickness, old age, disability, survivors, as well as health protection”. Among these efforts, the Jordanian government has worked to enhance e-government to facilitate access to social and financial services, which helps improve the efficiency of support delivery to needy families. According to Al-Shboul et al. (2014), the implementation of e-government in Jordan has contributed to the development of public services, enabling individuals to conduct government transactions electronically, thereby enhancing financial and social inclusion. Electronic payments in Jordan accounted for approximately 84% of all financial transactions in 2024, totaling over 350 million e-payments (Jordan Pulse 2025). Despite these initiatives aimed at improving social welfare, social disparities remain, raising questions about the effectiveness of current policies in achieving long-term economic and social security. Figure 6 represents the projected impact of these social protection measures on Jordan’s poverty rate, higher education enrollment, and unemployment rate over time.

Figure 6 illustrates how implementing CDAs can contribute to reducing poverty rates, increasing higher education enrollment, and lowering unemployment rates in Jordan over the long term. By enhancing access to education and improving children’s health conditions, CDAs help break the cycle of intergenerational poverty (Deng 2020). These projected outcomes are consistent with numerous international studies that have confirmed the role of CDA programs in enabling youth to complete their higher education (Han and Chia 2012; Zou and Sherraden 2022). They are also in line with studies that have highlighted the role of these programs in reducing poverty and unemployment (Kawar et al. 2022). CDAs in Jordan can provide children with valuable opportunities for adulthood by enabling them to avoid facing problems with university tuition fees, and others may use it to purchase a home or start a private project with the aim of self-reliance and independence, in a way that supports individuals’ aspirations and enhances the local economy and community.

Moreover, the Human Development Index reflects the close relationship between progress in education, health, income, and social welfare levels, allowing for an assessment of the effectiveness of social policies in improving quality of life and reducing economic and social gaps. There is a strong correlation between the terms “quality of life” and “well-being” in the Human Development Index, and the correlation becomes stronger for countries with higher levels, which usually approach 0.8 or 0.9 (Morse 2023). According to UNDP (2023), Jordan’s Human Development Index (HDI) has risen significantly over the last three decades, from 0.62 in 1990 to 0.74 in 2022, ranking 99th out of 193 countries. This moderate improvement reflects progress in key areas like education, health, and income, all of which are critical components of Jordan’s social welfare. Jordan’s HDI is comparable to that of other developing countries, including Bangladesh, which had 0.670 in 2022 (World Population Review 2024). However, there has not been much progress, and more calculated measures are needed to catch up to developed nations. For instance, Singapore’s HDI in 2022 was 0.949, whereas Sweden’s was 0.952 (World Population Review 2024).

Any policy in Jordan passes through several stages before it is adopted and implemented by the government, as is the case in the rest of the world. The process begins with the formulation of proposals by research centers and relevant bodies, then it is presented to the Council of Ministers for approval, and its implementation is then referred to the relevant ministry and executive and regulatory bodies. Figure 7 illustrates the key stages of Jordan’s policy and legislative processes, highlighting the steps that lead from issue identification to final implementation.

The successful implementation of CDAs in Jordan is dependent on a strong institutional framework, rigorous research measures, and effective collaboration among government bodies, including the Ministry of Social Development, the Central Bank, financial institutions, and non-governmental organizations. In addition to promoting financial inclusion, CDAs can help reduce intergenerational poverty, improve education, and increase economic empowerment. However, obstacles such as public awareness, financial literacy, and economic constraints may impede their success. Furthermore, Jordan’s demographic makeup, with a large youth population and the presence of refugees, presents both opportunities and challenges, necessitating targeted policies to improve the sustainability and continuity of CDAs. Despite the Arab absence in applying CDAs, there is still an opportunity for Jordan to be a pioneer in applying this model in MENA countries. When looking at the leading countries in granting these accounts, we find that each country has taken a specific direction into consideration when applying this model, as shown in Table 1.

4.1. Opportunities

Jordan has significant potential to benefit from implementing community development programs. With a strong institutional framework and a well-established digital financial ecosystem, the country is well positioned to integrate innovative asset-building strategies into its social welfare system. The Jordanian government has launched a 10-year modernization agenda in 2021, which includes reforms aimed at democratizing political life and improving living conditions through economic development, empowering women and youth, and improving quality of life and social protection. In line with this vision, and as a country working to advance democracy and inclusive governance, adding CDAs may be a good way to help people get access to financial services and reach these goals. In a study conducted by Murshed et al. (2022) to gauge the determinants of social expenditure, they found that rising democratization and higher fiscal capacity enhances social sector spending. The high youth population and large refugee presence, despite the challenges it poses, provide a unique opportunity to drive comprehensive social reform. The mass influx of Syrian refugees into Jordan has been an opportunity for the Jordanian government to tap into new financial flows from international relief agencies to support refugees (Grawert 2019). Furthermore, the integration of Fintech into microfinance holds significant promise for enhancing financial inclusion and expanding access to credit. Growth opportunities for CDAs in Jordan can be summarized into key areas, as illustrated in Figure 8.

• In the financial sector in Jordan, expanding microfinance services to increase access to credit for disadvantaged populations and enhancing digital inclusion to bridge gaps in rural areas. Also, fintech integration in microfinance has the potential to improve financial inclusion and increase credit access (Omowole et al. 2024).
• Strengthening public–private partnerships between government, banks, and NGOs can help address shortcomings in financial literacy and inclusion. This partnership plays a crucial role in enhancing opportunities for program implementation. Despite the administrative challenges faced by public–private partnership managers, the strategies they adopt help mitigate the impact of various challenges (Mistarihi et al. 2013).
• Focusing on empowering women, youth, and refugees through targeted programs can significantly improve overall financial participation, contributing to increased social mobility and economic vitality. In Jordan, several ongoing initiatives aim to address unemployment among these groups, such as the National Employment Program, vocational training programs, and even programs from major organizations such as the World Bank’s On the Job program (Jordan Times 2022; World Bank 2025). Early childhood development initiatives that are culturally appropriate for the country positively affect both children and women, contributing to increased awareness and empowerment (Zaki 2013). The same applies to refugee integration; according to Kabue et al. (2022), engaging the entire community, including refugees, is crucial to the design and implementation of early childhood development programs.
• Expanding education and employment opportunities by linking savings to goals related to scholarships, vocational training, and small business support helps youth transition smoothly into the labor market as entrepreneurs and contribute to economic growth in the future.

4.2. Challenges

Despite these promising opportunities, several challenges must be addressed to ensure the successful implementation of CDAs in Jordan. These challenges are summarized and illustrated in Figure 9.

• Low public awareness and limited financial literacy may hinder participation and long-term savings behavior, especially among low-income households. In addition, low awareness itself poses a significant barrier. Despite the benefits of asset-building approaches, which are known for being easy to put into action, flexible, and able to have a wide range of positive effects, as well as having considerable political support, the primary challenge remains that the current asset-based policy is highly regressive, which means that it is not available to everyone and primarily benefits the wealthy (Sherraden 2018).
• Economic constraints, including high unemployment rates and income inequality, further complicate the adoption of such asset-building initiatives. In addition, urban centers like Amman have better access to financial services than rural areas, resulting in significant disparities between rural and urban regions, as well as the capital and other governorates. Moreover, the National Aid Fund, which supports the poor in Jordan, is the main financial source for 6.2% of rural households and 4% of urban households (Al Sharafat 2019). This highlights a clear gap in financial support between rural and urban households. Additionally, Ramadan (2021) emphasizes that the education level of household heads and geographical location are key factors influencing expenditure disparities between urban and rural households in Jordan.
• Many CDA programs start with a pilot phase to assess needs, how well it works, and determine feasibility. This could also be an approach for Jordan, preferably with an opt-out design to ensure broad participation while still allowing families to withdraw if they wish. However, regulatory hurdles remain a challenge, as balancing innovation and effective oversight of the adoption of child development accounts requires effective adoption by the Central Bank and its direct supervision of Jordanian banks and financial institutions. Achieving this necessitates updating the legal and regulatory framework in line with digital developments, enhancing cooperation among all stakeholders, and developing robust oversight mechanisms to ensure efficient and transparent implementation of programs.
• Social reform implementation: Institutional inertia and societal resistance create significant barriers to social reform implementation, necessitating targeted structural reforms and streamlined policy adjustments, as resistance may stem from perceptions of greater benefit to wealthier groups and limited participation by lower-income groups due to economic constraints.

5. Discussion

Bringing CDAs to a nationwide scale—to all newborns across the entire socio-economic and geographic spectra—in a sustainable way requires an effective policy structure. This robust framework is essential for ensuring that the benefits of CDAs reach every segment of society, setting the stage for transformative social welfare initiatives in Jordan. Al-khawaja et al. (2025) proposed that Jordanian banks invest in financial technology models to reimagine traditional financial and banking services. This would entail establishing centers for financial innovation, developing new banking products, and encouraging collaboration between traditional banks and fintech companies through open banking application programming interfaces. Such measures are expected to enhance the delivery of digital financial solutions and support the broader adoption of asset-building initiatives like CDAs. Looking at the National Financial Inclusion Strategy (NFIS) by the Central Bank of Jordan, which aims to promote economic growth, empower underserved groups, reduce poverty, and enhance financial resilience, we see an aim to increase the adult savings rate in formal financial institutions from 4.3% in 2022 to 10% by the end of 2028 (CBJ 2024). This modest target underscores the current weak reliance on savings among Jordanians compared to other countries, highlighting the critical need for alternative asset-building models such as CDAs.

The implementation of community development programs in Jordan requires a carefully designed approach that aligns with the country’s specific social and economic context. Based on global best practices, successful models have established clear criteria for enrollment, contribution, and withdrawal, depending on the intended purpose—whether for education, health, or multi-purpose savings. In the 21st century, social policy around the world aims to reach important goals like protecting people’s rights, encouraging growth, and supporting overall economic growth (Sherraden 2018). Many countries set these criteria based on their domestic circumstances, ensuring that funds are allocated to approved purposes such as higher education, housing, or entrepreneurial initiatives. Class differences must be taken into account, as they significantly impact community acceptance and the overall effectiveness of CDAs. In Jordan, however, efforts to implement such models must contend with low levels of financial literacy, which is largely due to a lack of financial education and training programs (Alkhawaldeh et al. 2023). To maximize long-term benefits, the model must include targeted financial education, a robust governance framework that takes these socio-economic differences into account, and appropriate incentive mechanisms. Regarding youth, Bellino (2021) noted that “becoming an exception may be implausible, but at least offers the illusion of control in a setting where young people are granted little agency.” In line with this, Nam et al. (2013) emphasized that further research is needed to test the long-term cost-effectiveness of CDAs, while Bouchelle et al. (2024) emphasized the importance of examining the financial and health impacts of clinic-based financial services for low-income families.

The current approach to social welfare in Jordan, which focuses on traditional cash assistance, should be considered for a shift to a more sustainable and effective long-term model that focuses on building assets. Incorporating an innovative solution such as CDAs into the future framework would enhance financial inclusion and empower marginalized groups by not only meeting immediate needs but also supporting long-term investments in education and economic opportunities for all. A better asset policy would help everyone build up their assets, and it would also provide more money and help to people who have trouble building assets on their own (Sherraden 2018). Also, a strong commitment to social justice is fundamental, as CDAs have the potential to promote equity, reduce poverty, and empower underprivileged segments of society. Although free health care is available to citizens and non-citizens, it does not cover all citizens (Tamimi et al. 2024), which means an increase in their future living costs. These problems will put pressure on family resources and limit their ability to provide higher education for their children, which necessitates considering the adoption of policies such as CDAs. This discussion advances the conversation on financial inclusion, poverty alleviation, and intergenerational equity by addressing potential cultural, financial, and institutional barriers and proposing innovative solutions to overcome them. However, overcoming these challenges will require targeted policy interventions, robust public awareness campaigns, and strong collaboration among government entities, financial institutions, and community organizations.

CDAs play an important role in increasing financial inclusion and the ability to boost spending on educational and health opportunities. CDAs help break the cycle of intergenerational poverty and improve social mobility by encouraging people to save (Deng 2020). In addition, the adoption of these accounts (CDAs) could play a role in achieving the Sustainable Development Goals (SDGs) related to reducing poverty (SDG 1), improving education (SDG 4), promoting gender equality (SDG 5), reducing inequalities (SDG 10), and economically empowering individuals (SDG 8), making them an effective tool for achieving sustainable development in Jordan. According to Ansong et al. (2023), financial capacity building and asset innovations play a critical role in enhancing social protection, development, and the achievement of many Sustainable Development Goals. This is because they are highly practical from a resource perspective, can be easily integrated with other social policies and programs such as child development programs, and represent not just spending but an investment in society. Moreover, integrating CDAs into existing social welfare programs can enhance social policies and provide scalable solutions for economic empowerment and make living more attractive in the face of high immigration rates. Social welfare reform revolves around the idea of reform. It requires the state to provide various social welfare programs that focus on access to free health care and education, subsidized food and utilities, and public sector jobs (El-Said and Harrigan 2014). Future research should examine the feasibility and effectiveness of implementing this model in Jordan and other Arab countries given its potential impact. Furthermore, studies should examine pilot initiatives and conduct comparative analyses within the MENA region to improve implementation strategies for community development projects. Such research could shed light on policy design, financial infrastructure adaptation, and cultural factors that influence the successful implementation of CDAs in the region. Moreover, although including refugees in such programs may face legal and operational challenges, there is a need to explore future or donor-supported mechanisms and plans that can provide them with long-term asset-building opportunities.

6. Conclusions

In conclusion, the paper explores the application of CDAs in Jordan as an asset-building tool that can improve financial inclusion, reduce poverty, and enhance social and economic empowerment in the long term. The analysis builds on global country practices by showing that successful CDAs require clear registration criteria, robust contribution mechanisms, and structured withdrawal terms that are tailored to the nature of the program and local contexts. By reviewing the Jordanian economic, financial, and social context within a rigorous research design, the expected outcome of this paper is to provide global best practice solutions to mitigate the challenges that CDAs may face by adopting the appropriate approach in successful country programs.

To start the policy discussion and proposal for CDAs in Jordan, several steps should be taken. First, a thorough investigation into the financial behavior, needs, and preferences of various segments of the population should be conducted. This could be followed by a conference to discuss the findings and potential policy solutions. Jordan can benefit greatly from the experiences of countries such as Singapore and Canada, which have successfully implemented CDA initiatives. The process of drafting a CDA policy proposal in Jordan would require collaboration between government agencies, financial institutions, and academic experts. Leadership for this initiative could come from the Central Bank of Jordan or the Ministry of Social Development, with support from stakeholders. The next steps include drafting the policy, creating pilot programs, and advocating for its enactment.

Jordan can also serve as a model for other MENA countries when establishing CDAs, given the low adoption of these accounts in these countries based on previous studies and represents a unique case of sustainable economic empowerment among diverse groups. However, the effective implementation of this policy in Jordan will necessitate addressing significant challenges, such as low financial literacy, economic constraints such as high unemployment and income inequality, and regulatory hurdles. At the same time, there are opportunities to increase adoption by expanding digital financial services, microfinance, and public–private partnerships, particularly among underserved populations, including those in rural communities. CDAs, when properly adopted and addressed in Jordan, will result in a more inclusive and resilient economy.