Chairperson of the Egyptian Agriculture Bank (EAB) El-Sayed El-Kosayer said that the EAB is the most capable bank to achieve financial inclusion in Egypt.
He told Daily News Egypt that the bank has 1,210 branches, which is equivalent to about 27% of the total number of bank branches in Egypt, with access to 40-50% of Egyptians.
He added that the bank’s presence in various regions of the republic, including villages, rural areas, and low-income districts, gives it a competitive advantage over other banks operating in the Egyptian market, stressing at the same time that achieving financial inclusion in Egypt does not depend on the readiness of the banking sector and other financial institutions as much as the citizens themselves believing in its importance.
How do you see the importance of financial inclusion in Egypt?
Financial inclusion is a major cause of economic growth and financial stability, by integrating individuals and institutions into the formal financial sector.
It also enables financial institutions to develop their products and create a climate of competition in order to offer cheaper and easier financial products and take into account the interest of customers by obtaining transparent treatment and excellent services with ease.
The aim of the application of financial inclusion is to ensure that all segments of society have adequate opportunities to manage their money and savings in a safe and secure manner so they would not resort to non-official means, which are not subject to any supervision, and may be scams.
It is known that there are only 11 to 12 million citizens who deal with banks in Egypt, out of the 54 million citizens who are eligible to deal with banks. This means that the majority of Egyptians are outside the banking system. Banks and other financial institutions should strive to include them.
The banking sector aims to widen the circle of beneficiaries of banking and financial services. The entry of all citizens into the banking system reduces the liquid money in the society. It also allows citizens to manage their money through the official channels in a safe manner, which ultimately leads to the financial and monetary stability of the country.
Although the Central Bank of Egypt (CBE) is making a lot of efforts to achieve financial inclusion, through the initiatives launched from time to time, we hope that there will be the quick passage of laws that integrate the informal economy into the formal economy and provide incentives for that.
What is the role of the EAB in achieving financial inclusion?
I always stress that the EAB is the most capable bank in achieving financial inclusion in Egypt, as we can reach about 50% of all Egyptians.
The bank has a branch network of 1,210 branches spread across the country, equivalent to about 27% of the total number of bank branches over all. This gives us a spread that no other bank in Egypt has and access to places inside the villages that other banks cannot operate in.
The bank’s customer base is currently about 2 million, most of whom are farmers and peasants, as well as owners of microenterprises.
The number of farmers in Egypt amounts to 6 million, next to temporary agricultural labourers of about 4 million. This means that there are 10 million people in the agriculture sector. If every one of the 10 million provides for a family of four or five people, that means that the bank can access 40-50% of all Egyptians.
The bank also participates in the national project “Mashrouak” that aims to provide job opportunities for youth in villages, neighbourhoods, cities, and towns in all governorates; achieve sustainable development; reduce migration from villages to cities; improve quality of life in Egypt; and put the youth on the right path to form a new generation of investors.
The bank accounts for 27% of total loans granted by the six banks that are part of the project. It is only second to Banque Misr. If we hope to achieve financial inclusion in Egypt, the EAB is the way for it.
We are currently studying the provision of a range of services to suit the nature of the bank’s customers. We aim to develop the banking services system and start to provide technological services to serve the bank’s customers, who are farmers and their families.
As mentioned before, we aim to attract the 6 million farmers in Egypt to join the bank’s customer base. The “Farm Card”, which will be launched in cooperation with the ministries of agriculture, military production, finance, and planning, may help us achieve this.
Do you think that the technological structure and geographical spread of banks enable the state to achieve financial inclusion?
As I previously said, the banking sector, including the EAB, already have the ability to achieve financial inclusion.
But the road to financial inclusion does not rely only on banks, but on other financial institutions that can help, such as Egypt Post, NGOs specialised in microfinance, and the Social Fund for Development, along with e-payment companies, such as Fawry.
I would also like to point out that dealing with banks is no longer limited to dealing with branches or even ATMs and electronic payment points of sale (POS). There are a lot of transactions that are conducted through mobile phones, which are in the hands of all citizens. Some people even have more than one phone. This means that achieving financial inclusion should be an easy task, provided Egyptians believe in its importance.
This is not related to the readiness of the banking sector or other institutions to achieve financial inclusion, as it is related to the degree of conviction of the citizens themselves in the importance of conducting transactions through banks. This requires changing the culture of the people to make them understand that the banking sector is the safest place for savings and financial transactions.
I would also like to stress that the role of the media is also very important in helping the state achieve financial inclusion because it has the ability to influence public opinion and convince the citizens. Furthermore, I believe there should be an additional curriculum at schools that highlights the importance of financial inclusion.