Deputy Governor of the Central Bank of Egypt (CBE), Lobna Helal, said that the bank places increasing financial inclusion on top of its priorities, in line with Egypt’s strategy for sustainable development 2030, which is based on three main dimensions, including economic, social, and environmental aspects.
Helal explained that the CBE is working on four main axes. She elaborated that the first axis is to strengthen supervision, by working to measure the levels of financial inclusion on a practical and sustainable basis. This is to be accomplished, she continued, by creating a regulatory and legislative environment, through issuing instructions and regulations that promote a risk-based approach, ensuring that all segments of society are included in the formal financial system, and that their rights are guaranteed by issuing instructions to protect the rights of bank customers.
She added that the second axis is based on spreading awareness and the culture of financial inclusion, through the launch of several initiatives, to reach target groups and provide financial services at an appropriate cost and fair manner. This includes initiatives such as the activities of the Arab Financial Inclusion Day, which resulted in opening 1m accounts within four years in the Egyptian banking sector, in addition to spreading and sponsoring financial education activities for more than one million beneficiaries.
According to Helal, the third axis is to create a supportive environment, by supporting entrepreneurs, encouraging innovative projects, and promoting local products, through the recent launch of the Nile Pioneers Initiative, in collaboration with Nile University.
She added that the CBE is also working to enhance the business environment through cooperation between the concerned parties at the state level and the establishment of business development centres, which contribute to the promotion of innovative ideas that lead to economic growth.
With regard to the fourth axis, Helal said that it is based on reliance on technology, through the development of necessary technological infrastructure to support and stimulate the use of electronic payment methods and channels, with the aim of transforming into a cashless economy, and the establishment of the Fintech Hub, to stimulate and support innovation in the field of digital financial services.
Moreover, Helal spoke during a workshop held by the Arab Monetary Fund, in cooperation with the International Monetary Fund, and hosted by the CBE on Monday, under the theme of enhancing financial inclusion and the development of small and medium enterprises in Arab countries.
Helal said the workshop dealt with one of the most important topics of interest to policymakers in central banks, especially in developing countries.
She pointed out that the issues of financial inclusion and support to small and medium-sized enterprises (SMEs) are of great importance, as they have an impact on the financial stability of countries on one hand, and on the social level of citizens, in terms of reducing unemployment and poverty and raising the standard of living, in order to achieve economic stability and sustainable growth on the other hand.
“The percentage of citizens with official bank accounts – over the age of 15 in Arab countries – amounted to 37% compared to 59% of the global average, while the use of women of financial services is 23% less than men, according to the latest indicators of the World Bank for financial inclusion,” Helal said.
She added that Arab countries face a greater challenge in measuring the contribution of micro and small companies into the formal economy, where the majority of these companies work in the informal sector. Furthermore, she stressed the importance of exerting more effort to provide the appropriate climate to stimulate these companies to transition toward the formal sector, contributing in maximising the GDP.
“This is a major responsibility for us as policymakers and supervisory authorities to do more to enact the necessary legislation and instructions to create a supportive environment to raise financial inclusion rates, reflecting on the availability of financing for micro, small, and medium enterprises, and motivating financial service providers to improve the accessibility of these services, commensurate with the nature of these companies, and the adoption of responsible and sustainable financing,” she concluded.