Egypt’s financial penetration rate is low compared to peers in the MENA region and other emerging economies. About 14% of the adult population has an account at a formal financial institution while only 9.3% of women do. Only 4% of adults save at a financial institution. Still, policymakers have identified data as a major issue and prioritized developing a comprehensive database to enable evidence-based policies for financial inclusion.
The Microfinance market in Egypt comprises of 725 licensed NGO Microfinance Institutions and three commercial companies. Microfinance is provided to 1.9 million clients, out of which 66% are women. Market share of NGO MFIs accounts for 80% in terms of number of active clients. MFIs mainly offer microcredit and, to some extent, micro-insurance products (credit life insurance, insurance-based savings).
The MFMR programme in Egypt is supporting cross-sector initiatives through technical advisory at policy and regulatory level to the Central Bank of Egypt (CBE) and the Egyptian Financial Supervisory Authority (EFSA). The programme assists the partner institutions and policymakers in the financial inclusion policy process by supporting.
- The CBE to establish a comprehensive evidence base needed to inform policy development for greater financial access through conducting supply-side data gap analysis of the financial and non-financial sector in view of enhancing data availability and to produce financial inclusion reports. The newly established Financial Inclusion Unit is being capacitated to lead the financial inclusion process.
- The EFSA in strengthening the regulation and supervision of microfinance and micro-insurance as well as in the building of the capacities of the Microfinance Unit and the multi-stakeholder platform on Micro-insurance.
- The Egyptian Banking Institute (EBI) and the national steering committee for financial education in developing the national financial literacy strategy.
The Egyptian Financial Supervisory Authority (EFSA) is the independent regulatory authority for non-banking financial services. It was established in 2009 by a merger of three former non-banking financial services regulatory authorities.
For the MFMR programme, EFSA is leading the reforms in the non-banking financial services and is responsible for a sound microfinance and micro-insurance regulation and supervision.
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The main objective of the Central Bank of Egypt (CBE) has been realizing price stability and ensuring the soundness of the banking system. However, in line with the new thinking that assigns a central role for financial inclusion in the pursuit of economic and social development, CBE has recognized that financial inclusion can play a critical role in improving economic growth, reducing extreme poverty, boosting shared prosperity and reducing socio-economic inequalities in the society.
For the MFMR programme, CBE plays an important role in leading the financial inclusion process and coordinating among the multi-stakeholders towards greater and sustainable financial inclusion.
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