In numbers… Financial inclusion in Egypt is a qualitative shift towards economic empowerment

In numbers… financial inclusion in Egypt is a qualitative leap towards economic empowerment

In recent years, Egypt has witnessed a remarkable development in financial inclusion indicators, as a reflection of the efforts of the Central Bank of Egypt, in cooperation with the banking sector and a number of government agencies and the private sector, as the percentage of financial inclusion increased – according to data fromPresidency of the Council of Ministers website– from December 2016 until June 2024 to 181%.

More than 48.1 million citizens now own accounts for financial transactions, whether through banks, Egyptian Post, electronic wallets, or prepaid cards, and this is out of 67.3 million citizens in the age group over 16 years, bringing the financial inclusion rate to 71.5% in June 2024.

This achievement was not a coincidence, but rather the result of integrated efforts between national and banking institutions, while providing a stimulating regulatory environment, launching financial products that suit the needs of different segments of society, and spreading the culture of financial awareness among all segments of the people.

In this context,Earth GuardsIn this article, we will discuss the integrated Egyptian efforts that contributed to expanding the base of financial inclusion, while highlighting its developmental and social dimensions, especially in rural and marginalized areas…so continue reading the article.

Financial inclusion to empower marginalized groups

The efforts of the Central Bank did not stop at the borders of cities and major centers, but rather extended to include rural and remote areas, where the focus was on integrating the category of small farmers into the formal financial system. Through a partnership with the World Food Programme, a project to support small farmers was launched, which aims to provide financial products tailored to small farmers, appropriate to the nature of their activities and needs, with the aim of improving their living conditions and enhancing their role in the local agricultural economy.

This project comes as a qualitative leap in linking the agricultural sector to the financial sector, which contributes to stabilizing the income of rural families and achieving more comprehensive economic development. Support is not limited to financial services, but includes awareness and training. In order to enhance the ability of this group to use financial instruments sustainably, and reduce their dependence on traditional or informal solutions.

It is also worth noting that supporting small farmers contributes indirectly to achieving food security, which is one of the Sustainable Development Goals (SDGs). Because of their pivotal role in supporting agricultural production chains. This trend emphasizes the importance of financial inclusion being part of an integrated development vision that includes the environment, economy and society.

Decent Life Initiative

Within the framework of expanding financial inclusion and linking it to community development, Egyptian banks – under the supervision of the Central Bank – have contributed to the “Decent Life” presidential initiative since July 2021, which seeks to improve the level of services and infrastructure in 20 governorates, including 52 centers and 1,667 villages.

Through this initiative, the provision of banking services to citizens in villages and deprived areas was expanded; This contributed to facilitating their access to bank accounts and small financing that suit the nature of their business. This banking development also helped enhance financial awareness among the population, encouraging them to save and use safe banking tools instead of unsecured cash transactions.

The importance of this step is highlighted in supporting the local economy and facilitating the implementation of small and micro projects, which leads to creating new job opportunities and reducing unemployment rates, especially among the youth, in addition to enhancing economic and social stability in rural communities.

Small and medium enterprise financing

Recent years have witnessed a significant growth in the volume of financing provided to small, medium, and micro enterprises, as these financings increased by 388% from December 2015 to June 2024. This boom is a clear indication of the extent of the Egyptian banking sector’s commitment to supporting this vital sector, which represents the backbone of any ambitious economy.

These funds were remarkably concentrated in vital sectors, such as the industrial sector, which received an increase in funding by 61%. The Delta and Upper Egypt governorates also witnessed a growth in funds, as sustainable development efforts should have the largest share in governorates far from the capital.

These projects are considered among the sectors most capable of creating new jobs quickly, especially for youth and women, in addition to their role in promoting innovation and entrepreneurship, which is in the interest of the national economy in the long term, and also enhances the competitiveness of the local market.

Growth of Microfinance

Microfinance in Egypt achieved an unprecedented leap during the period from December 2016 to June 2024, with a growth rate exceeding 1,350%, according to what was announced by the Egyptian Federation for Financing Micro, Small and Medium Enterprises.

This type of financing is considered an effective tool to enable individuals to start simple projects that suit their capabilities and contribute to improving their living conditions. Therefore, the initiatives and procedures launched by the Central Bank helped facilitate access to these funds, whether by simplifying procedures or providing easy-to-use electronic channels.

Despite the challenges, the expansion of microfinance represents a real opportunity to achieve sustainable development from the bottom up, by giving individuals the ability to create sustainable income and contribute to the local economy directly, which is consistent with the goals of social justice and economic empowerment.

Towards sustainable financial inclusion

This financial boom reflects a strategic shift in the course of Egyptian economic and social development steps. It is based on integrating all segments of society into the formal financial system, especially women, youth, residents of rural areas, small farmers, and entrepreneurs.

But it is important to emphasize that financial inclusion should not be viewed only as a financial tool, but rather it should be viewed as an essential component of comprehensive sustainable development. Because linking financial services to environmental sustainability and social justice opens new horizons for efforts to build a more balanced and stable society.

Because of the above,The Earth Guards calls for continuing efforts aimed at strengthening and developing the concept of financial inclusion within a development framework that places the human being, his dignity, and his needs at the heart of economic policies.