Lack of financial inclusion impedes economic growth: UNB-E vice chairperson

24 May, 2017

Original Source: Daily News Egypt

The lack of financial inclusion hinders economic growth and deprives citizens of better job and life opportunities, says Mohamed Nasr Abdeen, vice chairperson of the Union National Bank Egypt (UNB-E).

Abdeen told Daily News Egypt that the public and private sectors should work together based on a well-studied plan to achieve financial inclusion in Egypt, asserting the need to raise the young generation’s awareness and give them the chance to enter the banking sector.

He added that the expansion of the customer base supports the financial system and has a positive impact on the economy.

According to Abdeen, the Egyptian banks started to pay attention to electronic payment systems and benefit from modern financial services via mobile phones, and he noted that UNB-E constantly develops its products to meet the needs of customers.

How do you see the importance of financial inclusion for Egypt?

Financial inclusion has become necessary—especially after the volume of money exchanged outside the banking system has been doubled in recent years—as the absence of financial inclusion hinders economic growth and deprives citizens of better employment and life opportunities.

The expansion of the customer base in the banking sector by adding new segments of society supports the financial system. It also has a positive impact on economic activity, which leads to increased savings and investment rates and helps to achieve the optimal utilisation of human resources.

What is the role of the bank in supporting the state’s efforts to achieve financial inclusion?

UNB-E has adopted some measures to support the Central Bank of Egypt’s (CBE) efforts to achieve financial inclusion. The bank has signed a cooperation protocol with the Dar Al Maaref to raise awareness about financial inclusion.

This protocol includes a number of initiatives to increase young people’s knowledge about financial inclusion and its importance and role in achieving economic growth and financial stability in the country.

The bank will also sponsor the publishing of a series of children’s books that will develop a culture of children’s savings. These publications are due to be distributed to school students across the country, in particular Upper Egypt, in addition to releasing them online to reach the whole society.

The bank has also participated in the Financial Inclusion Week out of its awareness of the importance of financial inclusion in supporting the Egyptian economy.

During the Financial Inclusion Week, the bank facilitated all the transaction procedures, paying attention to the poor and low-income people and raising the awareness of clients, especially those who do not benefit from financial services in the governorates of the Delta, Upper Egypt, and Suez Canal regions, in addition to other areas.

How can Egypt achieve financial inclusion from your point of view?

The country should pay attention to the young people and raise their awareness about the banking sector and the necessity of dealing​ with legal institutions.

The financial inclusion initiative basically aims to develop the banking culture of citizens, which requires the appointment of trained bankers to take care of this new segment of customers.

Since the financial inclusion initiative aims to help low-income people to benefit from financial services at a reasonable cost, the expansion of the customer base will contribute to the empowerment of society as a whole and enhance the financial independence of individuals.

The bank’s strategy also targets to raise awareness of school and university students, through media outlets and social media networks.

One of the obstacles facing the implementation of the financial inclusion initiative is that most of low-income individuals are located in remote areas, which limits their ability to benefit from available services.

We should also limit the risks of operating outside the framework of the official financial system and offer financial services and products in accordance with the rules and laws.

It is also important to encourage citizens to save and invest their money in the best way, through the preparation of programmes allocated for specific groups to promote their culture of savings and investment.

Is the technological structure of the banks operating in the Egyptian market capable of achieving financial inclusion?

Egyptian banks started to pay attention to electronic payment systems and benefit from modern financial services via mobile phones, which has a positive impact on the transfer of cash transactions into banking transactions to ensure flexibility of payments between individuals, governments, and various economic activities.

UNB-E constantly develops its products to meet the needs of customers.

One of the modern services provided by the bank is “UNB-E Utility”, which helps customers who wish to pay their utility bills through UNB-E to avoid the hassle of bill payment at various service providers. They can also conduct all bank transactions through the mobile phone (UNB-IVR) and text messaging (UNB-INSTANT) services.

The bank will also complete its project of providing banking services to customers through the internet and mobile phones, in order to cope with the developments in the Egyptian banking market and enhance the bank’s position among the local banks.

What are the major obstacles for financial inclusion in Egypt?

I believe that there are no obstacles, but it requires more cooperation between the public and private sectors based on a well-studied plan.

We should have a strategy to measure the levels of financial inclusion for citizens and assess the gap between supply and demand by conducting a comprehensive field survey.

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