For the first time Egypt’s banking history, new laws to facilitate the process for low-income citizens to open bank accounts. A significant step towards financial inclusion.
According to the decision of the Central Bank of Egypt, banks have been directed to implement simplified procedures for opening accounts, from which low-income citizens can easily open saving accounts. A source in the Central Bank of Egypt commented: “the decision primarily targets SMEs, which is a category that does not deal closely or in general with banks.”
The source at the Central Bank also added that this step aims to attract workers in the undesignated sectors to deal directly with the banking sector, in light of the state’s orientation towards financial inclusion and reducing the circulation of cash. Egyptian Statistics Authority notes that unofficial economic establishments represent about 53% of the total number of economic establishments in all of Egypt.
Through its recent decision, the Central Bank seeks to address all the challenges faced by working professionals in the process of opening accounts by allowing the use of smoother methods that are applicable, such as ensuring the correctness of their data through those dealings with them or through social media platforms, if available.
Micro-enterprises, craftsmen and liberal professions, as the Central Bank directed, are to open accounts using IDs of the owner of the establishment, or some partners under the same trade title in the event that there is no fixed location or official documents.
Mahmoud Mughrabi – the owner of a small food stuff supply store – took advantage of the opportunity saying that he does not deal with banks, does not have a bank account and hardly deals with banks except in the narrowest ways. The shop owner added: “Most of my commercial dealings are done in cash without bank dealings, and I do not prefer dealing with banks because of the bureaucratic procedures required to open an account, but if the matter was facilitated and account openings fees were canceled, I would definitely have an account, especially since some government agencies have begun to refuse cash.”
If you see something out of place or would like to contribute to this story, check out our Ethics and Policy section.