Mohamed Farid, Chairperson of the Financial Regulatory Authority (FRA), said that economic growth always needs financing which requires mobilizing savings.
This came during a session on mechanisms to enhance the role of the non-bank financial sector within the activities of the second day of the Egyptian Economic Conference 2022.
Farid noted that to achieve a growth rate of 7%, we need to increase the proportion of investments, explaining that investments require savings, and that comes through the banking financial sector, and the non-banking financial sector, whether through insurance companies or private and government insurance funds, and the authority is working hard to increase the volume of funds and savings existing in this sector.
Farid stressed the relative importance of the non-banking financial sector, as the total funding granted by the banking sector during 2022 amounted to 552 billion pounds, while the volume of funding directed to the private sector and individuals through the non-banking financial sector through its various channels, whether stock issuances, financial leasing, etc. , about 396 billion pounds, representing 40% of the volume of financing granted by the financial sector in Egypt, which illustrates the pivotal role played by the non-bank financial sector in providing the necessary financing to the private sector that is more productive of jobs and increasing its participation in economic growth.
He referred to the development of markets and products, as the Authority is working to complete the financial derivatives market within a few months so that the investor is able to hedge against the risks of price fluctuations, stressing that the Authority had the lead and leadership in this field.
He explained that the authority will conduct a comprehensive review of the rules for listing securities to help economic entities explore opportunities for growth and expansion through the stock market, noting that the main pillars of work during the next stage include creating a business environment and facilitating all necessary procedures for all economic entities to benefit from all financial activities. non-banking.
Farid indicated that the authority aims to strengthen insurance coverage mechanisms as one of the tools to enable the insurance sector to increase the percentage of contribution to the national product and explained that globally all professions have insurance, stressing the need to work to increase the insurance sector’s contribution to the national product in a manner that is commensurate with the experience and strength of the sector, as well as The available growth space in the Egyptian market, stressing the importance of achieving financial, insurance and investment inclusion, which helps to easily enter larger percentages of investors into a young society through digital transformation and technological applications that support the state’s efforts to increase national output.
Farid stressed the importance of developing regulatory frameworks based on technology, stressing that the Financial Supervisory Authority supervises and monitors the non-banking financial services sector, but it also takes into account the development dimension, as the authority works on developing and developing non-bank financial markets as a top priority while ensuring the safety of transactions, market stability and balance Customers’ rights amid a favorable work environment.
Farid added that the microfinance sector and the financing of small and medium-sized companies plays a major role in achieving financial inclusion, transformation and digitalization and addressing the issue of the informal economy, adding that technological development for dealing in the non-banking financial sector is necessary to increase the volume of transactions, which requires accelerating the pace of adoption and availability. Various technological applications to facilitate citizens’ access to financial and financing services, achieve financial inclusion, and support digital transformation.
