E-Finance, an electronic payment company operating in Egypt, hopes to raise revenues for the current year by 15% by introducing new products within their activities and expanding existing projects.
Ibrahim Sarhan, Chairman of the Board of Directors of E-Finance, said in an interview with Daily News Egypt that E-Finance holds 95% of the electronic payments market in Egypt.
The company’s capital was raised to EGP 175m recently through the addition of an extra EGP 55m in order to construct a new building in the Smart Village in western Cairo.
Developing the electronic payment system forms a step toward providing financial liquidity to the state without having to borrow which will eventually increase the capacity of Egypt’s GDP.
Can you tell us a bit about the company and its most important projects?
E-Finance is a government institution owned by national banks; National Investment Bank owns 70% and the National Bank of Egypt owns 10%.
The company’s main goal is to build a modern electronic network for payment and collection. The most important projects that have been implemented include the collection of income and sales taxes since 2008. We have also implemented the 2009 project to distribute more than one million government employees’ salaries, and the 2010 pension payment project.
The company is currently working on a project to implement the state’s policy to rationalise energy subsidies, especially diesel and gasoline, by providing smart cards to various sectors.
Tell us more about these projects.
Regarding the tax and customs tax collection project, E-Finance was able to collect approximately EGP 360bn. We have implemented a salary payment system for more than one million government workers and we hope to increase this number as plans are in the works to do so.
The pension project was one of our most important and the company began working on it following the January 25 revolution. We were able to provide cards for all pensioners in approximately 27 governorates.
There are approximately 5.6 million people who receive pensions in Egypt.
Does this include those who receive social security pensions?
No, not now, as the government has a plan to increase the number of social security pension beneficiaries to 3 million by raising allocations in next year’s budget. We will work on incorporating them into the smart card system by coordinating with the relevant government agencies.
And what about smart cards for the gasoline and diesel fuel system?
The company has been working on this project since the end of last year in cooperation with the Ministries of Finance and Petroleum. We were able to complete the first phase which includes transferring petroleum derivatives of diesel and gasoline to various types of stations. We called this phase “from the warehouse to the station.”
Have you begun the second phase?
We are now working on the second phase and finished issuing 2.2 million smart cards for gasoline and diesel fuel exchange. We hope to print approximately 6 million cards for gasoline-powered cars, and a million for diesel-powered cars.
What has turnout been like among car owners?
We are working to coordinate with the relevant authorities to increase turnout for these cards. This is especially as the company has the modern technology required to issue them, and they save time and money.
What do you mean when you refer to the company’s modern technology?
E-Finance owns a high-quality and efficient centre that issues the cards. It is outfitted with modern equipment and boasts a production capacity of 4 million cards per month.
The company owns modern equipment and the existence of an experienced working group allowed E-Finance to obtain the ISO and BCI certificates for secure electronic payment cards, and we are the first company in Egypt to do so.
This certificate allows the company to work outside of Egypt according to the international standards used to protect information and the requirements of the central Bank of Egypt. This is all compatible with international electronic payment companies such as Visa and MasterCard.
The company hopes to be the centre of a network servicing payment and collection between national banks like National Investment Bank, National Bank of Egypt, Banque Misr, and financiers.
The company’s capital was increased by EGP 55m in order to enhance efficiency and strengthen our network. The company has hired approximately 250 new employees, bringing the total employee number now to approximately 600 across the 27 governorates of Egypt.
Let’s go back to the smart card system for diesel and gasoline.
This is one of the bigger projects that we have implemented recently, what with the government’s intent to rationalise subsidies to the energy sector.
At the end of implementation, the Ministry of Finance will have a computerised system provided through E-Finance’s network that will allow them to tighten supervision over and control of diesel fuel and gasoline so that these products will not be sold on the black market.
This system will allow the Egyptian General Petroleum Corporation (EGPC) to track quantities consumed and market needs in each governorate. It will also allow the Finance Ministry to set appropriate financial allocations for this item in the budget.
This project will provide information to the Ministries and Finance and Petroleum regarding the movement of fuel from the warehouse to the consumer, helping to end the fuel deficit.
Will smart cards help tighten control on fuel stations?
Yes, the smart cards will help tighten control over 2,665 gasoline and diesel fuel distribution stations.
Under the Minister’s request, we introduced diesel fuel into the system because of its significance to power generation for strategic industries like sugar and electricity.
The project does not just consist of issuing the smart cards, but also establishing a computerized system to allow the state to overcome obstacles hindering process, as well as saving time and money by tightening control over fuel.
And what about the industrial sectors and other activities?
Three thousand customers were recorded across various sectors of the gasoline and diesel smart card system and after completing of the second phase we hope to begin the third, especially to issue cards for irrigation machines, tractors, fishing workers, and contracting companies that own tractors.
What are the company’s plans for tax and customs collection?
There is a new system being implemented by the company called “Pay your taxes and customs from your office,” and it currently boasts approximately 150 clients.
Communication is underway with the Tax Authority to increase usage of this system among senior financiers. An announcement will be made at the launch conference soon.
Electronic payment collection saves approximately 15 days and provides great financial resources for the state to fund its expenses during a given period of time. It also allows the state ability to avoid borrowing, which has a positive impact on GDP.
Does the company intend to participate in the Real Estate Financing Initiative recently launched by the Central Bank?
The company has a strong network through which it can interact with the New Urban Communities Authority (part of the Ministry of Housing), and approximately 38 banks are participating in the initiative.
What has happened regarding with construction on the company’s new building?
The new building in the Smart Village will bring together all company employees in one place instead of being dispersed across Maadi and 6th October.
Throughout the next month, 30% of construction work on the building will be completed, with all construction will be concluded by the end of June 2015.
What about collecting electricity and gas bills?
We have future plans to collection electricity, gas, and water consumption bills.