The joint technical assistance project “Strengthening Financial Inclusion and Banking Supervision in Egypt” has been completed by the Central Bank of Egypt (CBE), the European Union (EU), and the German Agency for International Cooperation (GIZ). The project, which started in Cairo in November 2018, received €4.12m in funding from the EU and the German Ministry for Economic Cooperation and Development (BMZ) and was implemented by GIZ.
The project aimed to support the CBE’s efforts to foster a sound and inclusive financial ecosystem, in line with the international best practices that promote sustainable and inclusive economic growth, by enhancing cooperation with international and local institutions.
Some of the key achievements of the project are:
ï The development of the Financial Inclusion Strategy (2022-2025) by the CBE, based on the findings of the demand-side surveys of financial services conducted on a nationally representative sample of individuals and Micro, Small, and Medium Enterprises (MSMEs), operating in both the formal and informal sectors. The survey was conducted in cooperation with the Central Agency for Public Mobilization and Statistics (CAPMAS), ministries, and authorities concerned with financial inclusion.
ï The publication of the financial inclusion indicators by the CBE as of December 2022, which showed a significant increase in financial inclusion rates during the period from 2016 to 2022, at a growth rate of 147%, bringing the total ownership and usage of transactional accounts to 42.3 million citizens, which represent 64.8% of the total 65.4 million eligible adults (16+ years old). Moreover, the financial inclusion indicators regarding women reflected an upsurge in the number of females who own and use transactional accounts, reaching 18.3 million women by the end of 2022, representing 57.6% out of the total 31.8 million women, and reflecting a growth rate of 210%, compared to 2016.
ï The launch of the “Efham Business” platform, in cooperation with the Egyptian Banking Institute (EBI), which aims to provide technical support for start-ups and small enterprises.
ï The development of a risk-based model for banking supervision, comprising 12 risk components in line with international best practices, to improve supervision and control of banks. The Banking Supervision Sector at the CBE is continuing the implementation and periodical testing of the model.
ï The enhancement of the regulatory framework, focusing on developing the supervisory capacity, and elevating the banking sector’s capability to implement the Basel III post-crisis reforms framework, concerning market risk, credit risk, securitization, and regulatory capital.
ï The provision of technical assistance to the Regulations Sector to effectively implement home-host supervision, and capacity building to carry out the impact assessment of regulations issued by the CBE to the banking sector.
ï The provision of technical assistance to the Macro-prudential Department to develop the institutional structure for financial stability, the analytical framework, and the macroprudential policy toolkit.
May Abulnaga, the First Sub-Governor at the CBE Governor’s Technical Office, stated that the project reflects the strategic partnership with the EU and the German Development Cooperation, which comes within the framework of the CBE’s keenness to enhance financial inclusion, and availing access to banking products to all segments of the population from individuals to MSMEs, and supporting sustainable economic growth.
Mohamed Abou Moussa, First Sub-Governor, Offsite Sector, Banking Supervision at the CBE, stated that the project contributed to strengthening the supervisory processes of the banking sector including supervision on combating AMF CFT in line with international best practices.
Christian Berger, Head of the EU Delegation to Egypt, stated that the project has been a vital part of the EU’s efforts to support economic development and social progress in Egypt. Through this project, they have worked closely with their partners to create a more inclusive financial system that can better serve the needs of all Egyptians, including women and underserved populations. The project has also helped to strengthen banking regulations and supervision, which are crucial for maintaining financial stability and promoting sustainable growth. He added that they are proud to have been part of this important initiative and look forward to building on these achievements in their future cooperation with Egypt.
Stefanie Soerensen, Deputy Head of the German Development Cooperation in Egypt, stated that as a partner in the joint technical assistance project, they are proud to have been supporting the CBE in cooperation with the EU in achieving significant progress towards promoting financial inclusion and strengthening banking supervision in Egypt. She said that this project is a testament to their commitment to supporting sustainable economic growth and social development in Egypt, and they look forward to expanding cooperation with their partners in the country.
Andreas Ruepp, Head of the Financial Sector Development Project at GIZ, stated that they have seen the commitment of the CBE to further strengthen banking supervision in Egypt while promoting financial inclusion. He said that they are proud of what they have achieved together in this ambitious project. Furthermore, he said that they are impressed by the skills, qualifications, endurance, and motivation they saw in the CBE, which is considered the key success factor for the project. He thanked the CBE for this successful collaboration and expressed his delight to cooperate in future projects.
