The Role of Central Bank of Egypt in SME Banking

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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 .

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