Egypt’s bankers start to get the taste for change
Egypt’s banking system is undergoing wide-ranging reforms designed to make it more competitive. Have the lessons from the past finally been learnt?
IT’S DIFFERENT THIS time. Egypt’s banking sector is at last taking the tough medicine needed to lift it from its moribund past into a more dynamic future.
At least that is the view of public officials, analysts and bank chiefs themselves. The consensus is that the banks no longer resemble money market funds predominantly buying government securities, or, in some cases, speculative investment vehicles taking punts on real estate. Now they are acting more like, well, banks. The argument goes that, spurred on by a government reform process that began in 2004 and still continues, the banks are stronger, more competitive and, all-in, much healthier than in the past.
They have tackled their previous bad debt portfolios and are beginning to make new loans, especially in the retail market with products such as mortgages, auto loans and even credit cards. In the corporate market, too, the banks are beginning to differentiate themselves by turning their hand to SME lending and microfinancing. The Egyptian financial system is up and running.
"In the future, retail banking is where the real growth will come from"
To what extent, though, is it different this time? The phrase is so often used when it comes Egypt’s banks that that in itself tells its own sorry tale.