Rami Aboulnaga, Deputy Governor of the Central Bank of Egypt (CBE), said that the CBE is committed to keeping up with the latest developments in financial technology as part of its goals to maintain monetary stability and enhance financial inclusion.

He gave a speech on behalf of the CBE governor at the Cairo ICT exhibition in its 27th edition, where he said that the CBE has supported and encouraged financial technology in the banking and financial sector. It launched an ambitious strategy for financial technology and innovation to transform Egypt into a regional hub for the financial technology industry in Africa and the Middle East. This strategy has helped increase the number of companies operating in the industry from 32 companies in 2017 to 177 companies in 2022, attracting about $800m.

The CBE has also included a chapter on the regulation of electronic payment systems and services and financial technology in the CBE and Banking Sector Law No. 194 of 2020.

He added that the CBE has facilitated the transition to digital banks, as it issued rules for licensing, registering, monitoring, and supervising digital banks, which opens the way for a new generation of digital banking services in the Egyptian market, which banks provide to their customers in a fully digital manner.

Financial technology applications

The CBE launched several initiatives to support emerging financial technology applications in all their stages, from idea to launch. The bank has also sponsored young financial technology talents, as it launched the FinYology initiative, which trained nearly 7,000 university students in cooperation with 25 universities, both public and private, with the participation of 18 banks operating in Egypt, as well as the FINTEKRS initiative, which aims to support financial technology innovators in the regions. The bank also launched the regulatory sandbox for financial technology applications as a testing environment that allows entrepreneurs to experiment with their innovative applications.

The CBE pays great attention to developing the infrastructure for digital financial services in Egypt, as it succeeded in launching the Meeza digital system for mobile phone wallets in 2017, bringing the number of wallets to more than 36 million, as well as the national card payment system “Meeza” in December 2018, which contributed to increasing the number of electronic payment cards to more than 62 million cards in the Egyptian market.

He said that the launch of the national system for instant payments “IPN” and the InstaPay application in March 2022 was one of the most important pillars of the infrastructure for digital financial services, which the CBE relies on in transitioning to a cashless society. The number of customers of the InstaPay application reached more than 6.2 million.

The efforts of the CBE to stimulate the expansion of electronic payment methods resulted in a significant increase in the number of electronic points of sale to more than 1.2 million points of sale, and ATMs to more than 23,000.

Digital projects

Aboulnaga said that the CBE issued the rules regulating card coding services on electronic device applications in February 2023. These rules will enable the activation of the services of many international companies such as (Apple Pay – Samsung Pay, etc.), as well as financial technology companies.

He also said that the CBE is working on several projects to develop the infrastructure for digital financial services in Egypt.

One of these projects is the Electronic Know Your Customer (eKYC) project, which will allow customers to open accounts and authenticate transactions electronically, which can help with financial inclusion and creating an advanced infrastructure for electronic payment service providers (PSPs) that will help them provide advanced, innovative services to customers, Aboulnaga added.

Aboulnaga said that the bank is also highly focused on cybersecurity by adopting an integrated vision to enhance the capacity of the banking infrastructure and provide a secure electronic environment that accommodates the country’s plans for digital transformation and financial inclusion.

He pointed out that the CBE has established an independent cybersecurity sector, which contains the first sectoral centre for early response and prediction of computer emergencies in the financial sector. It also took the lead in developing and issuing the first regulatory framework for cybersecurity, on which banks and financial institutions rely in conducting a self-assessment of the level of cybersecurity readiness and the availability of adequate security controls and standards.

He stressed that the development witnessed by financial technology and innovative applications for electronic payment has a positive impact on financial inclusion and enhances growth opportunities for emerging, micro, small, and medium enterprises and entrepreneurship, as the CBE issued a package of initiatives and measures.

Aboulnaga explained that the CBE worked to provide technical support and non-financial and advisory services to entrepreneurs and owners of micro, small, and medium enterprises through the NilePreneurs Initiative, which the bank launched in 2019 in partnership with the banking sector and several universities and local and international bodies. It aims to create a supportive environment by providing a package of technical support programs, and non-financial and advisory services, including business development, incubation, digital transformation, and innovation support programmes. They aim to boost the growth of these projects and enterprises.

He pointed out that the NilePreneurs initiative resulted in providing more than 386,000 non-financial and advisory services to over 153,000 clients and projects, in addition to facilitating the granting of financing worth over EGP 4.7bn through 81 business development service centers covering 23 governorates.

Moreover, the initiative supported over 1,000 start-ups, and small and medium enterprises through incubation, digital transformation, and innovation support programmes. That generated more than 55,000 job opportunities, directly and indirectly through the initiative’s various programmes.

He stressed that developing the infrastructure and technological system is a fundamental focus of the financial inclusion strategy 2022-2025, in line with global practices and sustainable development goals to reduce poverty, achieve sustainable economic growth, and reduce inequality for everyone, in addition to the economic empowerment of women.

Financial inclusion reaches 68%

Aboulnaga said that digital transformation and financial technology play an essential role in facilitating the access of the target groups to digital products and services at a low cost, along with financial awareness and education efforts, which are vital for the financial system. He said that the CBE is currently coordinating with all relevant authorities in the country to formulate and launch the national strategy for financial education, with the aim of unifying efforts and increasing financial literacy among citizens.

He also said that the CBE has worked to facilitate the access of people with special needs to banking services and products by equipping the infrastructure of branches and ATMs for them. In addition, it has issued instructions to integrate young people aged 16 years and over into the banking sector and help them benefit from banking services and products that have been developed to meet the needs of this group and encourage entrepreneurship, craftsmen, and liberal professions to deal with banks by providing an economic activity account with simplified procedures.

He stressed that as a result of all these efforts, the financial inclusion rate in June 2023 reached about 68% of the total citizens aged 16 years and over, a growth rate of 163% compared to 2016.

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