Micro Financing Service Launched

24/05/2017

As part of the recent initiative of The Central Bank of Egypt

The United Bank launches the "Micro Financing" service to strengthen the role of the small and micro enterprises sector in increasing local production

 

Ashraf El kady – Chairman of The United Bank

 

•    Development of the Local Component in Industries achieving a mutation in the micro and small industries sector.
•    Create local alternatives with appropriate quality to reduce imports.
•    Establishing specialized villages and centers for industry and services according to the comparative advantage of each governorate.
•    Rehabilitation of the Egyptian product for local competition.
•    Access under the umbrella of the formal economy.
•    Participatory economy applications to attract new segments of society.
•    To support the process of sustainable development in Egyptian society.

 

As part of the initiative of The Central Bank of Egypt last week to stimulate the micro - enterprise sector, The United Bank launched the "Mico Finance" service to strengthen the role of the small and micro enterprises sector in increasing the production of the local component and thus achieving a mutation in the Egyptian industry and local output.

 

The meaning of microfinance

As for microfinance, Ashraf El-Kady, Chairman of The United Bank, says financing for the micro-enterprise sector is for economic, production, service and commercial purposes. In order to encourage the contribution of certain categories, including women and youth, as well as the low-income group to participate in economic activity and state building, especially in this important period of the history of the country.

 

El Kady pointed out that The United Bank recently launched a service "Micro financing" specialized in financing small and micro enterprises and allocated about 200 million pounds as first stage of banking funds in the market.

 

The Intilaakah service provides customers with a number of specialized financing solutions in most economic, service, commercial and productive activities, either in conventional or Shariaa compliant financing methods. Through direct or indirect financing through a large base of clients of companies specializing in this type of financing, which covers all parts of the Republic and also through The Social Fund for Development. It also provides directly through financing to individuals in accordance with the rules and conditions of The Central Bank of Egypt.

 

Micro-enterprise sector micro-development hubs

Ashraf El-Kady pointed out that the development of this promising sector contributes to achieving the goals of the State in sustainable development in accordance with the vision of 2030, on several main hubs:

 

Production hub:

This sector contributes to the development of the local component in Egyptian industries. Causing a real mutation in GDP. Because the process of reducing imports and creating new jobs will contribute to maintaining the strength of the local currency. As well as reducing the cost of production in general, leading to a decline in capital invested, which contributes to the rapid deployment of these projects and productive activities and market competitiveness.

 

Ashraf El-Kady said that we aim to establish Egyptian industrial castles, based on small, medium and micro industries, serving the main industry to move the economy, reflecting real employment opportunities for youth and improving the average income of Egyptian citizens. As well as the establishment of many models of the aggregate industries rather than directly rely on the imported foreign component, which provides foreign currency.

 

Therefore, we have created a number of financing tools for each industry or craft individually, such as financing artisans and small and micro workshops for the manufacture of basic components of wooden furniture products in the new Damietta furniture city.

 

Development hub of the state and the national economy: El Kady expressed the great efforts of the state in strengthening these various industries and activities, whether commercial or production or service or business, represented in facilitating the procedures for investors and motivating them to increase their investments and access to land and the establishment of specialized industrial complexes.

 

As well as a number of incentive measures for small-scale people, including: the establishment of industrial complexes for small and medium industries in many cities, for example: Qena, Badr and Menia.

 

This is in addition to the establishment of a specialized system for the development of small and medium enterprises and the initiative of The Central Bank for the development of this promising sector. Finally, The Central Bank's initiative yesterday for micro-projects, all these efforts come in an integrated manner to support this sector, which is the winning horse in the race to develop the national economy and get rid of economic crises.

 

As well as the issuance of the draft investment law and draft bankruptcy law, these contribute significantly to the development of Egyptian industries and attract investors, both domestic and foreign.

 

Social hub: These projects contribute to the realization of the social justice system by creating job opportunities, eliminating unemployment, improving the standard of living of the individual and family, employment and training, and developing their skills. Leading to improved production rates, competitiveness and increased exports, benefiting the consumer and society as a whole.

 

Microfinance is one of the most important means to deepen financial inclusion system

Ashraf El Kady indicates that the financial inclusion system in Egypt has not yet been completed and lacks sufficient awareness of the private citizen marginalized groups. Therefore, banks and financial institutions must innovate financial instruments that attract this important segment of Egyptian society so that society can be fully integrated under the umbrella of the state's official economy.

 

The difficulty of access to these categories, El Kady says that the entry of professionals and craftsmen under the umbrella of the official economy qualify them to enjoy the financial and financial services that contribute to the development of their activity and thus develop their wealth and balance between consumption and income.

 

El Kady pointed to direct awareness campaigns launched by the banking sector, led by The Central Bank of Egypt late last month, in which The United Bank especially strongly by its 51 branches all over the country. The campaign, organized under the slogan "Open a bank account", aims to instill financial culture and introduce innovative banking tools and solutions.

 

Development of the microenterprise sector

Ashraf El-Kady said that the amount of funding granted to micro-enterprises in Egypt represents less than 4 billion pounds, benefiting 2 million customers either through banks directly or through associations. Therefore, working to improve the legislative environment and provide specialized funding packages for each industry or service alone contributes to the development of this sector. As well as the importance of the role of financial control.

 

Participatory economy to attract larger segments of society

The United Bank is studying the possibility of joining the system of the participatory economy with a range of different types of financing granted by the bank. Especially as it seemed to attract a large explanation of society, especially the youth and women, relying on a range of available tools and modern technological applications.

 

He said that these types of projects started to penetrate the Egyptian society and take a number of activities, including: the preparation of food and crafts and this type of activities based on micro-projects. It is a real opportunity to support this promising sector.