Egyptian central bank to launch a microfinance initiative next Tuesday

Egypt’s central bank will launch its anticipated microfinance initiative next Tuesday, a step that follows recent successful initiatives to support the country’s small and medium-sized businesses.

The central bank has invited all the banks operating in the country to attend a meeting on May 23 to announce the details of the new initiative, senior banking sources with knowledge told Amwal Al Ghad on Thursday.

The meeting will be attended by some ministers and representatives of microfinancing associations, the sources added.

Sherif Samy, Chairman of the country’s market regulator, the Egyptian Financial Supervisory Authority (EFSA), is due to attend the central bank’s May 23 meeting, the sources said.

According to the new initiative, the banks will not be obliged to establish a special unit for microfinancing; as they can provide both direct and indirect lending to clients.

The Central Bank of Egypt (CBE) plans to allocate 20 billion Egyptian pounds ($1.2 billion) for the microfinancing activities in the country, banking sources with knowledge told Amwal Al Ghad earlier in March.

CBE deputy governor Gamal Negm announced earlier that the central bank is preparing the ground to launch an initiative dedicated for the microfinance sector before the end of this month.