Chairperson of Banque Misr Mohamed El-Etreby said that there are strong expectations for banks to increase the size of financing to major projects, as well as small- and medium-sized enterprises (SMEs) in 2017.
He added that Egypt is nominated to see large economic and investment activity this year, following the reform measures implemented by the state in 2016, which would reflect on the size of financing granted by banks to national projects.
He pointed out that banks will continue boosting the size of financing dedicated to SMEs to realise high growth rates and implement the initiative posed by the Central Bank of Egypt (CBE) back in 2016.
“2017 is the year of opportunities for banks, but it will also be a year of challenges,” he said.
Regarding the opportunities, El-Etreby said that more foreign direct investment will flow into Egypt following the approval of the new investment law, which would raise demand on borrowing from banks.
He added that proceeds of hard cash following the flotation of the Egyptian pounds will also have a positive impact on banks’ activity in the new year in terms of foreign trade.
Furthermore, he pointed out that the government and the CBE have dedicated much attention to SMEs, as the CBE has obligated banks to increase their financing to the sector to reach 20% of their credit portfolio over four years, starting from January 2016. “This means that 2017 will see an influx in the size of financing to SMEs,” he added.
As for the challenges that may face banks in 2017, El-Etreby said that the most important of these challenges is eliminating the unofficial currency market, especially as banks became the main entity responsible for price tagging the US dollar against the national currency, restoring the currency exchange transactions into the official channels again.
He added that despite being an opportunity to boost the size of credit portfolio, SMEs remain challenging, especially in terms of reaching their owners.
Asked about Banque Misr’s plan in 2017, El-Etreby said that the bank will boost financing channeled to SMEs and expand in mortgage financing to serve low- and middle-income citizens.
He noted that Banque Misr sets rationalising imports and maximising exports as a top priority when financing major or small projects, which aims to ease the pressure on foreign exchange.
He added that the bank will also continue its geographical expansion plan in 2017 and 2018 to reach all segments of society everywhere. “The bank will also provide a full range of technological solutions to achieve financial inclusion,” he stressed.
He pointed out that only 13% of the Egyptian people deal with banks, which also sheds light on potential opportunities for expansion.
