Egypt Implements New Rules and Regulations for Digital Banks to Foster Financial Inclusion Initiative

Newsletter

16 Jul 2023

Egypt Implements New Rules and Regulations for Digital Banks to Foster Financial Inclusion Initiative. Egypt’s Central Bank has implemented new licensing rules for digital banks, aiming to enhance financial inclusion and regulate banking activities. The rules dictate that digital banks must have a minimum issued and paid-up capital of EGP 2 billion ($64.6 million) to engage in most banking activities, excluding financing large-scale businesses. However, digital banks can increase their capital to EGP 4 billion ($129.3 million) to offer financing services to large-scale businesses. Additionally, the largest shareholder in digital banks must be a financial institution with relevant projects and activities, holding at least a 30 percent stake. Moreover, digital banks must provide a comprehensive fiscal study that outlines their target clients, product offerings, information technology plans, and cybersecurity strategies. The Central Bank of Egypt has unveiled its financial inclusion strategy for 2022-2025, aiming to foster financial inclusion across the country. (Bloomberg Asharq)

Egyptian Businessman Naguib Sawiris Set to Launch Major Real Estate Project in Iraq, Marking His Return to the Market.
Distinguished businessman Naguib Sawiris has confirmed his plans to embark on a significant venture in Iraq's real estate sector, signifying his comeback to the Iraqi market after investing in the telecommunications industry nearly 20 years ago. Sawiris took to Twitter, sharing a photo alongside Iraqi Prime Minister Mohammed Shia Al-Sudani, highlighting their constructive meeting and expressing an intention to launch a substantial project in Baghdad. While specific investment details have not been disclosed, this endeavor marks Sawiris' inaugural entry into real estate development in Iraq. In January 2023, Sawiris, serving as the CEO of Orascom Investment Holding (OIH), engaged in discussions with Haider Makiya, Chairman of the National Investment Commission, exploring investment opportunities in the real estate sector. The discussions centered around the creation of large cities catering to individuals from both high- and low-income backgrounds, located outside of Baghdad. (Bloomberg Asharq)
Mortgage Financing Initiative for Low-Income Individuals Surpasses EGP 60 billion in H1 2023, Benefiting Over 513,000 Citizens.
The mortgage financing initiative aimed at supporting low-income individuals witnessed a significant increase in funds, with banks and companies injecting a total of EGP 60.07 billion in the first half of 2023. According to a report by the Social Housing and Mortgage Finance Fund, banks contributed EGP 57.74 billion, benefiting around 494,500 customers (96.1% of the total), while companies provided EGP 2.333 billion, benefiting approximately 19,100 customers (3.9% of the total). The National Bank of Egypt (NBE) led the participating banks, providing EGP 16.159 billion in financing to 137,959 customers, capturing a 26.9% share. Banque Misr followed closely with EGP 14.473 billion for 118,343 customers (24.1% share), and the Housing and Development Bank (HDB) ranked third with a share of 11.3%, amounting to EGP 6.803 billion for approximately 71,100 customers. (Al Ahram)
EBRD Approves $533 Million Soft Financing for Egyptian Banks and Equity Funds to Support Economic Growth.
The European Bank for Reconstruction and Development (EBRD) has granted approximately $533 million in soft financing to two state-owned banks and an equity fund in Egypt. The EBRD's board of directors approved $400 million for the National Bank of Egypt, $100 million for Banque Misr, and €30 million (about $33 million) for Mediterrania Capital Fund. The Egyptian Ministry of International Cooperation expressed appreciation for the partnerships between the EBRD and the private sector, emphasizing their role in supporting the country's development priorities. The collaboration aims to drive comprehensive and sustainable growth by empowering small and medium-sized enterprises (SMEs), addressing climate change, generating employment opportunities, and stimulating the private sector. Notably, over 78 percent of the EBRD's investments in Egypt are already dedicated to the private sector across diverse industries. (Al Mal News)
Egyptian-Chinese Drilling Company Delivers First Locally Manufactured Oil Rig, Boosting Petroleum Production Plans.
Minister of Petroleum Tarek al-Molla oversaw the delivery of the inaugural oil rig manufactured at the Egyptian-Chinese Drilling Company in Ain Sokhna. This milestone marks a significant advancement for the petroleum sector, allowing it to leverage local capabilities and expedite well drilling plans to augment oil and gas production. With global oil prices on the rise, the demand for rigs has intensified, making local manufacturing a strategic move to optimize resources, reduce imports, save foreign currency expenditure, meet domestic market needs, and create potential for future exports. The completed excavator, achieved through a $6.5 million investment, exemplifies fruitful economic cooperation between Egypt and China and signifies the successful transfer of manufacturing technology. This achievement paves the way for further collaborations to enhance Egypt's self-sufficiency in the oil and gas industry while reducing reliance on imports. (Al Mal News)
Egypt to Showcase Investment Opportunities in Non-Renewable Energy Forum end of July.
The upcoming forum, held under the auspices of the prime minister, will spotlight case studies and models of lucrative investment prospects in non-renewable energy sectors, as announced by Minister of Environment Yasmine Fouad. The event will also mark the launch of an e-platform for private sector engagement in environmental and climate issues. The forum, supported by Chapter Zero Egypt Association, the first chapter in the region under the global Climate Governance Initiative network, aims to foster collaboration between the private sector and the Ministry of Environment in raising awareness among youth and entrepreneurs. It will present unconventional investment opportunities in sectors such as environmental tourism, agricultural waste, and construction and demolition waste. The event seeks to strengthen public-private sector collaboration and promote the transition to sustainable energy sources. (Al Ahram)
Egypt-Sudan Interconnection Line Capacity Raised from 80 megawatts to 90 megawatts Enabling Increased Electricity Transmission.
An official source from the Egyptian Ministry of Electricity and Renewable Energy has confirmed the recent upgrade of the interconnection line capacity between Egypt and Sudan. The capacity was increased from 80 megawatts to 90 megawatts, in preparation for the line's full operation at its intended capacity of 300 megawatts by the end of this year. The interconnection project is deemed one of the most significant initiatives undertaken by the Ministry of Electricity, aiming to enhance the stability and capacity of the existing electrical interconnection line between Egypt and Sudan. Through the addition of electrical missions, the project seeks to bolster the transmission capacity between the two countries, ultimately enabling the exchange of electricity up to 300 megawatts, surpassing the current capacity of 90 megawatts. (Arab Finance)
US’ BlackRock explores investment opportunities in Egypt.
The leading American investment company BlackRock is mulling over investment opportunities in the Egyptian market, Egyptian cabinet stated on July 12th. Prime Minister Mostafa Madbouly met with officials from BlackRock in the New Administrative Capital, where they reviewed investment opportunities in Egypt. Madbouly indicated that the government continues to implement its structural reform program, stressing: "Our priority during the current period is to enhance opportunities for private sector participation in economic activity." For his part, Co-Head of Global Emerging Markets Equities for the Fundamental Active Equity division of BlackRock Gordon Fraser praised reform steps taken by Egypt that encouraged them to invest more capital in the Egyptian market. (Arab Finance)
Egypt Signs €250 Million Financing Agreement with AIIB for Alexandria's Abu Qir Metro Development.
Egypt's Ministry of International Cooperation has signed a €250 million financing agreement with the Asian Infrastructure Investment Bank (AIIB) for the development of Alexandria's Abu Qir Metro. The project, costing €1.5 billion, is being co-financed by several institutions. Additionally, Egypt and China have signed cooperation agreements and a memorandum of understanding (MoU) to enhance their partnership and implement joint projects in various sectors. The agreements cover areas such as equipment supply, vocational training, biosafety laboratory development, and the formulation of an integrated strategy for cooperation. The cooperation portfolio between Egypt and China amounts to approximately $1.7 billion, focusing on sectors like electricity, health, and education. These collaborations aim to strengthen joint efforts in line with Egypt's developmental priorities. (Arab Finance)
Egypt Approves Partnership with Private Sector for Four Development Projects, Plans for Future Collaborations.
The Supreme Committee for Public-Private Partnership (PPP) Affairs in Egypt has authorized the signing of contracts for four new development projects in partnership with the private sector, according to Minister of Finance Mohamed Maait. The projects encompass operating and maintaining an electrical transformer station in the 10th of Ramadan City, operating the electricity network in the new city of El Alamein, constructing a wastewater treatment project in the 6th of October City, and establishing a dry port and logistic zone in the 10th of Ramadan City. Additionally, 17 upcoming projects are being planned, including sewage and industrial treatment plants in Sadat City, New Beni Suef, and New Mansoura, as well as transformer stations, electricity networks, power generation facilities, and expansion projects across various locations in Egypt. These collaborations between the public and private sectors aim to enhance infrastructure development and contribute to the country's economic growth. (Al Mal)