The number of banking consumers in Egypt ranges between 10 million to 11 million persons, against about 54 million citizens who have the right to vote, said Mohamed El-Etreby, Chairman of Banque Misr and member of the Federation Of Egyptian Banks (FEB).
El-Etreby added that financial inclusion is no longer optional, but rather a necessity and a reality, and its absence does not only affect development in countries of lower growth, but also obstructs global growth rates and deprives millions of people of better work and life opportunities.
El-Etreby made his statements in a speech during the Arab Bank Forum held on Thursday in Sharm El-Sheikh under the slogan “financial inclusion, strategic direction towards financial and social stability”.
He said that there are more than 2.5 billion persons, 70% of whom in developing countries, who do not enjoy financial services. He added that Egypt, like most countries, has started to realise the danger of absence of financial inclusion on state development.
According to El-Etreby, the increase in client base of the banking system, by including new segments of society, will support the safety of the financial system. It also has a wide positive effect on the economic activity, as it leads to increasing the rates of savings, investment, and mobilisation of financial resources through official channels. This all contributes to increasing growth and decreasing poverty and unemployment rates.
The Banque Misr chairman said it was important for financial inclusion mechanisms to incorporate the informal sector into the formal sector, as the former squires over 50% of the total size of the Egyptian economy.
He added that achieving such incorporation will lead to the multiplying of the GDP and will decrease the budget deficit, which will definitely contribute in improving the credit ranking of Egypt, and the world’s view regarding Egypt’s economic future.
Applying financial inclusion is a priority for Banque Misr over the upcoming period, but the role of the Central Bank of Egypt (CBE) and banks is not enough, El-Etreby said. The government has to participate in achieving this goal by taking more effective steps towards a qualitative leap in the Egyptian economy.
He explained that the government has already started taking serious steps towards linking its employees with banks by paying salaries through electronic cards, and signing agreements with international organisations such as Master Card to add 54 million persons to the client base of the banking system.
He added that technology plays an important role in financial inclusion, as it provides modern mechanisms for attracting the largest segment of citizens through financial services and products the fit their various needs.
The Union of Arab Banks (UAB) aims to promote and disseminate the culture of financial inclusion in the community, as it adopted an initiative in the framework of supporting the CBE under the name “You must have a bank”.
Arab banks held intensive campaigns so that the message could reach the largest number of individuals. They launched an advertisement campaign that coincided with the mortgage finance initiative put forward by the CBE in February 2014.
This advertisement campaign contributed to benefit of a large segment of low-income from banking sector services. The UAB also held courses for business journalists on financial education.
The UAB also cooperated with the Egyptian banking institute in preparing a special booklet for distribution among school students to spread banking awareness to increase the number of bank sector clients and increase banks’ deposits.