The United Bank allocates 500 million pounds to finance micro-projects

22/09/2020

The United Bank allocates 500 million pounds to finance micro-projects

Ashraf El-Kady - Chairman of The United Bank
•    Microfinance is the winning horse for eliminating poverty and treating unemployment.
•    An expected boom for microfinance, following the parliament’s approval to double funding per client.
•    Delinquencies ratios for microfinance are almost non-existent.
•    Digitizing the payment to the NGOs promotes the financial inclusion and the transformation to a cashless society.

Cairo: September 22, 2020

Ashraf El-Kady - Chairman of The United Bank announced the allocation of 500 million pounds to finance micro-projects, whether through specialized companies, private associations or individuals.
He explained that microfinance sector has a great opportunity to grow in the market, especially after the approval of the Egyptian parliament last July 2020 to double the amount of funding granted to a single client to reach 200 thousand pounds, which contributes in increasing the demand and maximizing the production.
El-Kady indicated that women take over about 40% of the volume of microfinance applications. Also, the commercial sector has the highest rates of funding requests, followed by the service sector and then the industrial sector.
Numbers and indicators
Ashraf El-Kady explained that the volume of funds granted to the micro-enterprises sector increased to reach 17 billion pounds by the end of January 2020, compared to 2.7 billion pounds at the end of last January 2019 according to the latest reports issued by the Financial Supervisory Authority, while the number of customers for this sector reached about 3.2 million by the end of January 2020.
Microfinance is the winning horse for the elimination of poverty and a cure for unemployment
On the importance of microfinance, Ashraf El-Kady states that financing micro-projects plays a major role in eliminating poverty, combating unemployment and the sustainable societal development. It provides job and decent living opportunities for entrepreneurs or crafts, as well as it is a shift from a consumer society to a productive society. It also contributes to combating migration, both internal and external.
Ashraf El-Kady referred to the Malaysian experience of handicraft owners, where the Malaysian government paid attention to the establishment of schools and colleges for technical education, which graduated numbers of those who are proficient in plumbing, carpentry and blacksmithing, which helped the owners of these trades to convert to entrepreneurs.
Delinquencies ratios are almost non-existent:
Ashraf El-Kady explained that the delinquencies ratios are almost non-existent in microfinance due to several factors, the most important of which are: the nature of the financing owner and his keenness on his reputation, which makes him inclined to pay on the specified dates and the fear of scandal.
Central Bank of Egypt controls
Ashraf El-Kady pointed out that the effect of the controls issued by The Central Bank of Egypt to banks operating in the field of granting micro-finance, which contributed in improving the investment climate for this sector. Especially since banks are the main financiers, whether directly or indirectly, by financing associations or specialized companies. This contributed to doubling the size of the funds granted to the sector and reducing the delinquencies ratios.
Digital transformation
Ashraf El-Kady declared that everyone is fighting time to transform into a cashless society to keep pace with the Egyptian state's plan. This is through the use of digital technologies in all government transactions and the simplification of procedures to obtain the service. This contributes in raising the efficiency of institutions and creating a supportive business environment for the private sector and attractive to investment, whether local or foreign.
Ashraf El-Kady expressed that the automation of the microfinance activity, especially in the field of payments, will enhance the efforts of the state and the central bank towards financial inclusion, whether through payment operations through the national card "Mezza" or through other electronic payment methods such as internet banking, mobile banking and the digital wallets.
Technical support for micro projects
Ashraf El-Kady explained that the micro-enterprises suffer a lot to market their products on the foreign markets. This is what The United Bank does through technical support and advice to institutions, specialized associations and organizations concerned with the export operations and the access of the Egyptian products to the foreign markets.