Egyptian microfinance market stands at EGP 22.53 billion in Q2 2021: financial regulator
The Financial Regulatory Authority (FRA) revealed that the volume of microfinance in the Egyptian market reached around EGP 22.53 billion in the second quarter (Q2) of 2021, compared to EGP 17.22 billion in the second. quarter of 2020.
According to the authority, microfinance refers to any financing for economic, productive, service or commercial purposes in the fields and at the value determined by the board of directors of FRA.
Microfinance is a major means of encouraging the participation of low income groups in economic activity. Access to various means of financing for individuals and owners of micro-enterprises helps to reduce unemployment, helps to improve the incomes of the poorest families and has a positive impact on increasing the volume of investments and employment in the national economy.
Microfinance is characterized, according to the experiences prevailing in various countries of the world, depends on the personal and direct contact between the financing entity and the clients, and on the provision of amounts or services of limited value, which requires the presence of ‘entities organized for communication with individuals, entities and micro-enterprises.
It should be noted that on November 13, 2014, the presidential decree of Law 141 of 2014 regulating the activity of microfinance was published in the Official Journal.
Microfinance in Egypt focuses on agricultural fields and related activities including agricultural production or manufacturing, animal and bird breeding, fish farms, fishing and other activities. It also includes the productive, industrial and artisanal fields, and includes all the production and manufacturing fields in the field of textiles, knitting, furniture, food products, leather, paper, wood, metal, fabric. plastic, glass, office tools, appliances, machinery and equipment, crafts of all kinds, waste recycling and other activities or projects in the productive and industrial fields and crafts.
It also includes service areas, including contracting, finishing, transportation, packaging, storage, maintenance, repair, restaurants, nutrition, sportswear, games, entertainment, computer services, information and communication systems, health and medical services, education and training services, tourism and travel services, photography, works of art, advertising, photography, printing , bookbinding, professional services, cleaning services, clothes ironing and other activities or projects in the fields of services.
It also includes business areas and includes all activities or projects in the areas of wholesale and retail trade, procurement, brokerage and distribution.
In the same context, FRA revealed that the Tasaheel Microfinance Company ranked first among companies and providers of this financing, with 4.578 billion EGP, or 21.82% of the market.
Tanmeyah comes in second with a financing amount of EGP 3.208 billion and a 15.29% share of the business, followed by Alexandria Business Association with a market share of 10.52% and 2.207 billion EGP funding.
Reefy came in fourth with a funding of 1.155 billion EGP and a market share of 5.50%, followed by El Mobadara with a total funding of 997.607 million EGP and a market share of 4, 75%.
Aman for Microfinance came in sixth place with EGP 925.7 million funding and a market share of 4.41%, followed by the Dakahlya Businessmen’s Association for Community Development (DBACD) with total funding of EGP 865.173 million and a market share of 4.12%.
In eighth position, Tamweely Microfinance with funds of 858.975 million EGP and a market share of 4.09%, followed by the Lead Foundation with funds of 733.495 million EGP and a market share of 3.50% . Al Tadamun Microfinance Foundation came in tenth place with funding worth EGP 612,663 million and market share of 2.92%.
According to the authority, the number of beneficiaries of the nano-finance activity, which is provided through microfinance companies, registered around 5,524 beneficiaries, with a funding value of EGP 1.049 million in the first quarter. from 2021.
The nano-finance product reaches a maximum of EGP 3,000 per person, with a repayment period not exceeding 90 days, with the aim of covering the needs of groups most in need of financial services.
According to the authority, commercial activity represented 42.71% of nano loan balances, then productive activity by 32.55%, then commercial activity by 24.3%, and finally agricultural activity by 0.53%.
In the same context, the authority revealed that the number of clients benefiting from the microfinance activity, who disbursed funding through electronic payment systems, amounted to around 63,096 clients, with a funding value of 683.5 million EGP in the first quarter of 2021.
On the other hand, the number of customers who paid for financing through electronic payment systems reached 613,500 customers, for a value of EGP 930.371 million.
In the same context, FRA reported that microfinance companies and associations injected around EGP 2.753 billion to around 192,500 clients, as part of the “Decent Life” initiative, in the first quarter of 2021. The The authority’s report found that the companies provided the bulk of the funds, amounting to EGP 2.029 billion for around 123,300 beneficiaries, with a market share of 73.3%.
In second place were “class A” civil society organizations, with funding of EGP 635.7 million for around 61,400 clients, and a market share of 23.1%, followed by organizations of the “Class B” civil society with funds of 83.240 million EGP for 7,870 clients, then “Class C” organizations with funding of 5.1 M EGP for 395 clients.