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Egypt’s Fintech faces obstacles to bring digital banking to fruition

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By Sherif Tarek

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Posted on August 26, 2021 09:32

General view of hotels, banks and office buildings by the Nile River in Cairo © General view of hotels, banks and office buildings by the Nile River in Cairo, Egypt January 30, 2021. REUTERS/Mohamed Abd El Ghany
General view of hotels, banks and office buildings by the Nile River in Cairo, Egypt January 30, 2021. REUTERS/Mohamed Abd El Ghany

Nearly two thirds of Egypt’s population of 102 million are without access to banking services. Slashing this number is a key prerequisite to integrate the country’s vast grey economy – whose financial activity is not taxed or monitored by the government – into the formal sector.

As of September 2020, Egypt ratified a new banking law that will allow, for the first time, the launch of digital banks.

Bylaws are still being prepared and should come into effect later this year. Thereafter, the Central Bank of Egypt (CBE) will start granting digital banking licenses, for which several traditional banks have already applied, according to media reports.

Early this year, Banque Misr – Egypt’s second largest state bank – appointed French multinational IT company Atos to build its digital bank, which is set to be the first-ever in the most populous Arab nation, after the CBE gave it a tentative thumbs-up.

What’s not certain yet is if Egypt will continue on the path of change and grant banking licenses to fintech companies, as is already the case in other countries in the region such as Saudi Arabia, where digital banks can be established by telecommunication companies.

READ MORE Egypt/Fintech: E-payment of civil servants ‘forces people to deal with it’

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