NBE aims to boost mi­cro­fi­nance port­fo­lio to EGP 4bn by 2020: deputy chair­per­son


The Daily News Egypt - - Front Page - By Hos­sam Mounir

The Na­tional Bank of Egypt (NBE) aims to in­crease the size of its mi­cro­fi­nance port­fo­lio to EGP 4bn by 2020, ac­cord­ing to Ye­hia Aboul Fotouh, deputy chair­per­son of the bank.

Aboul Fotouh told Daily News Egypt that the size of the bank’s mi­cro­fi­nance port­fo­lio reached EGP 3.5bn at the end of March 2018,in­clud­ing EGP 1.2bn fun­nelled through as­so­ci­a­tions and com­pa­nies en­gaged in that ac­tiv­ity, and the rest was pumped to the own­ers of mi­cro­pro­jects di­rectly from the bank.

“The NBE pays spe­cial at­ten­tion to mi­cro­pro­jects, in light of their pos­i­tive and di­rect im­pact on con­tribut­ing to im­prov­ing the rates of poverty and unem­ploy­ment, and sup­port­ing the trend to­wards fi­nan­cial in­clu­sion,” Aboul Fotouh said.

He pointed out that the NBE has re­alised, since the 1990s, the im­por­tance of the role of in­sti­tu­tions work­ing in fi­nanc­ing these projects and the ap­pro­pri­ate­ness of their fi­nanc­ing prod­ucts for the mi­cro en­ter­prise seg­ment. Hence, the NBE pro­vided di­rect fi­nan­cial sup­port and pro­vided bank­ing mech­a­nisms to help them carry out their ac­tiv­i­ties. This sup­port helps them to trans­form from small in­sti­tu­tions into large en­ti­ties strong enough to con­tinue op­er­at­ing and grow.

Also, he added that one of the pil­lars of suc­cess of these projects is to pro­vide them with ap­pro­pri­ate fund­ing mech­a­nisms, from the choice of ge­o­graph­i­cal lo­ca­tions, sec­toral scope of projects, and tar­get cus­tomers, through to de­ter­min­ing the value of fund­ing, in­stal­ments, and ex­ten­sions of pay­ments.

More­over, he noted that the NBE seeks to pro­vide fi­nan­cial ser­vices for these projects in all cat­e­gories, whether projects that con­form to bank­ing stan­dards and re­ceive fund­ing di­rectly from the bank, or through bank fi­nanc­ing for mon­e­tary fi­nan­cial in­sti­tu­tions.

He added that in or­der to fa­cil­i­tate the pro­ce­dures of dis­burse­ment and pay­ment in the in­sti­tu­tions of mi­crolend­ing, re­duce the cost of op­er­a­tion, and in­crease the speed of ser­vice de­liv­ery, the bank has de­vel­oped the mech­a­nism of us­ing pre­paid cards for this pur­pose, point­ing out that the ser­vice is in its pi­lot stage now.

In a re­lated con­text, Aboul Fotouh pointed out that the NBE’s di­rect and indi­rect loan port­fo­lio for small and medium en­ter­prises (SMEs) amounted to about EGP 40bn, to 59,000 clients, with plans to in­crease fund­ing to EGP 100bn by 2020.

Ad­di­tion­ally, he added that the bank pumped EGP 18bn into the SME sec­tor across 18,000 clients, within the ini­tia­tive of the Cen­tral Bank of Egypt, not­ing that the bank fo­cuses on those funds in the in­dus­trial and agri­cul­tural sec­tors.

Ac­cord­ing to Aboul Fotouh, the NBE in­jects monthly loans in the sec­tor of small and medium en­ter­prises rang­ing from EGP 900m to EGP 1bn, which ben­e­fit about 1,200 to 1,500 clients.

Ye­hia Aboul Fotouh, NBE deputy chair­per­son

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