Hisham Ezz Al Arab, President and CEO, Commercial International Bank: Interview | Egypt 2020

Interview: Hisham Ezz Al Arab

How would you rate the ability of Egyptian banks to lead the country’s post-Covid-19 recovery?

HISHAM EZZ AL ARABIC: Egyptian banks are among the largest on the continent in terms of turnover, number of branches and scale of operations. Although the way the banking industry has interacted with customers has changed during Covid-19 in light of calls to stay at home, due to the well-capitalized and agile nature of the industry, it will continue to provide significant funding to businesses of all sizes in these countries. period of macroeconomic uncertainty. The fundamentals of Egypt – namely a large and growing population with many unbanked or underbanked individuals; young people are driving demand for digital banking services; and plenty of attractive investment opportunities – mean the sector will continue to play a crucial role in the country’s economy long after the pandemic is over.

In what ways can banks design products and services that improve accessibility and penetration?

EZZ AL ARABIC: The vast majority of Egyptian adults are unbanked, but if we tap into distribution channels such as the National Post and the Agricultural Bank of Egypt, those numbers would improve dramatically. Integrating the unbanked population into the formal economy is a priority of Egypt’s Vision 2030.

Financial inclusion efforts include several initiatives in coordination with public and private banks. One of these initiatives aims to provide the entire adult population with debit and prepaid cards so that they can collect their salaries or pensions, pay for government services and make purchases. As part of this effort, the Meeza Card is a prepaid debit card that allows customers to withdraw money from ATMs, make purchases and complete e-commerce transactions in Egypt. The continued development of payment services through its mobile app has the potential to help both banked and unbanked segments of the population, enabling people to pay bills, make purchases using QR codes. and send money to other wallet holders in Egypt with relatively low fees. However, the biggest impact on financial inclusion will come from regulatory changes, as current rules limit full digital integration for financial services.

In what ways are banks adopting financial technology (fintech) solutions and to what extent is the infrastructure in place to facilitate their use?

EZZ AL ARABIC: Technology is constantly evolving and there is a need to embrace the alphabet of the future: ABCD, or artificial intelligence, blockchain, cloud services and data. Fintech companies have emerged from Egypt’s vibrant entrepreneurial ecosystem, and by organizing workshops and providing mentorship to provide fintech companies with advice and support, it is possible for banks and fintech companies to collaborate in their mutual benefit. Successful banks will continue to seek new collaborations and support start-ups through loans and venture capital investments.

Banks also have a responsibility to support the entrepreneurial ecosystem beyond just achieving small and medium-sized business lending goals. These small businesses often provide innovative solutions and agility to market challenges, while banks have an abundance of expertise and the stability to reach a large consumer base and bring these innovative ideas to life.

What impact will lower interest rates have on borrowing, in particular on financing growth?

EZZ AL ARABIC: There is no doubt that domestic and international investors believe that the pace of cycle cuts can be significantly eased, as economic indicators such as inflation require a more conservative approach. However, we predict that interest rate cuts in 2019 and 2020 will lead to an increase in business lending in the second half of 2020. This will give private businesses a boost and further stimulate the economy.

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