Many studies have attempted to assess the effect of financial development on economic growth and it has been revealed that financial development can be assumed as a policy to promote economic growth. Regarding this issue, there are many aspects and problems to investigate; one of these important problems is whether all people are benefited from financial development or not. Do growth policies including financial development have some distributional effects? And, can these policies improve the average income by increasing income of both poor and rich people (neutralized distribution)? This paper studies the effect of financial development on income inequality in Middle East and North African countries. In order to achieve this goal, we have determined a model of income distribution in these countries, then we have investigated the effect of financial development on income inequality in these countries. The result indicates that financial development during 1990 – 2005 has decreased income inequality in these countries which has been great enough to change the existing income distribution pattern.