Central Bank of Egypt Regulations Dept.

The Role of Central Bank of Egypt in SME Banking

By: May Abulnaga

Head of Regulations Dept. Banking Supervision Sector Central Bank of Egypt CBE Objectives

 Financial Inclusion.  Sustainable economic growth.  Ensure the SME’s sector formalization.  Improve portfolio diversification of banks.  Ensure banks performs its role as the main engine of the economy. CBE Initiatives First Initiative

 “Access to finance” was one of the pillars of the second Egyptian banking reform plan ( 2008-2011) with special focus on SME’s, it included:

 Exemption from the reserve requirement on direct facilities extended by banks to a certain SME cluster.

First Initiative

 Efforts for enabling the environment:

. Establishing a specialized SME unit in Egyptian banking institute (EBI) to perform specialized trainings to banks and SME’s . Conducting a national wide senses to understand SME’s size . Coordinating with other counterparties

Going Forward

(a second initiative) Challenges

 Lack of data  Informal economy  Lack of national-wide definition  Banks reluctance  Poor SME finance infrastructure  Egyptian Current economic situation  Low level of national integrations Enabling the Environment  Regulations:

 Proper SME lending regulations.  Proper SME risk management principles.

 Issuing a definition (preferably nation-wide)

 Consider the idea of having specialized banks.

 Direct programs supported by the CBE Financial integration with the concerned counterparts Major Counterparts

Credit Banks Bureau SFD

EFSA CBE MOI

Credit others Guarantee EBI  Cooperation and coordination between the CBE and all the concerned authorities in Egypt for :

 Supporting SME’s to be bankable.

 Availing sufficient data on SME market size.

 Conducting discussions for reaching a nation-wide SME strategy. Thank You