Egypt has promising landscape of financial inclusion with youth representing 60% of population
“At Mashreq, digital transactions constitute 95 percent of its total transactions. We are committed to introducing novel digital products and inventive electronic solutions to transplant the successful practices and experiences garnered by Mashreq Group in the UAE to the Egyptian market, thus catalyzing further progress towards a digitally-driven economy in Egypt”, El-Bahey explained to Ahram Online.
Mashreq has plans to expand its products that support financial inclusion in the market and other services. The bank plans, however, to announce these services in due time, he added.
According to El-Bahey, these developments align with the Central Bank of Egypt's (CBE) aim to enhance financial inclusion. In December 2023, the CBE succeeded in increasing the number of beneficiaries from this inclusion by 70.7 percent, which meant that the number of beneficiaries between 2016 and 2023 grew by 174 percent.
Following Egypt Vision 2030, the CBE has adopted the Financial Inclusion Strategy (2022-2025) that charts a map for all banks in the Egyptian market to reach its target by the coming year.
The strategy aims to protect consumers and build their trust in the banking sector, expand financial literacy, increase the financial capabilities of consumers and MSMEs, and encourage entrepreneurship and startups by providing non-financial services and using a comprehensive and efficient infrastructure.
It also targets providing and facilitating MSMEs’/ startups’ access to financial services and their integration into the formal sector, thus expanding digital financial services (banking and non-banking) for all segments of society.
Moreover, the strategy focuses on enabling the ecosystem to achieve sustainable growth in the financial sector.
'Resurgence in foreign investment activities'
Responding to Ahram Online’s question on how he perceives the latest action taken by the CBE under Egypt’s IMF-backed $8 billion loan deal, El-Bahey noted that the regulatory directives and policy determinations enacted by the CBE have significantly bolstered the stability of the exchange market, secured the accessibility of vital commodities, and streamlined the clearance processes at ports.
“These measures have spurred a resurgence in foreign investment activities, amplified inflows of foreign currency, and prompted a notable shift among dollar-holding clients towards utilizing official banking channels for their transactions”, El-Bahey added.
In alignment with Egypt’s $8 loan deal with the International Monetary Fund (IMF), the CBE raised the key interest rates by six percent (600 bps) and depreciated the local currency against the US dollar, allowing the Egyptian pound to lose over 60 percent of its value. The action has managed to unify the FX rate in the local market and almost eliminated the currency parallel market.
Moreover, the CBE provided US dollar liquidity for the importers and helped clear the piled goods in ports, thus relatively controlling the rising prices of commodities in the local market.