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Egypt Financial Sector Assessment
2008, United Nations Advisors Group on Inclusive Financial Sectors

Identifying constraints to inclusive finance in Egypt

This report presents an overview of the microfinance sector in Egypt. It urges the private sector to play a more active role in providing inclusive finance.

Egypt’s microfinance industry currently reaches only about five percent of the more than two million potential borrowers. Constrains to sector growth include:

Scattered and conflicting policies that have minimal impact on micro and small enterprises (MSEs);
Lack of support in access to training facilities, credit, serviced land and extension services;
Lack of coordination among MSE-focused donor programs;
Lack of interest from banks in serving MSEs;
Reluctance from the Central Bank of Egypt (CBE) to license non-bank credit institutions;
Restrictions to NGOs;
Constraints to private sector involvement in microfinance.

These constraints could be tackled if the CBE adopted a more demand-oriented licensing policy that enables creation of financial institutions that fulfil a proper intermediary function targeting the private sector. The enabling environment should also be improved to allow financial intermediaries to capitalize on MSE demand and enhance their full operational potential.

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Journal Volume/Pages:
30

Publisher(s):
United Nations Advisors Group on Inclusive Financial Sectors