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Barclays Bank Egypt ventures into SMEs
Published in Daily News Egypt on 03 - 09 - 2007

CAIRO: In September 2006, Barclays devised a new strategy for its Egypt operations aimed at evolving from a niche bank into a multi-functional bank, with numerous branches and an array of services ready to cater to customer's needs.
After carefully studying Egypt's macroeconomic indicators for the past two years, the vision has finally seen the light.
"Barclays UK's senior management's vision is to turn the bank into a truly global, universal bank. Global meaning a brand that is recognized and present everywhere. Universal meaning not being a niche in any one of the markets, but offering financial products and services to different segments across individual retail banking, corporate and commercial banking, small and medium enterprise (SME) banking and treasury products, Khalid El Gibaly, managing director of Barclays Bank Egypt and North Africa, told Daily News Egypt.
The progress made by Barclays Bank Egypt so far this year is considered a success story headlined by its ability to penetrate new sectors using innovative and user-friendly means.
Since the implementation of its new strategic plan in January 2007, Barclays Bank Egypt has increased the number of its branches from eight in June 2006 to 28 branches today. Two more branches will be inaugurated within days, bringing the total to 30. The number of employees has also increased from 500 in September 2006 to 1,600 today, El Gibaly said.
Barclays has a long history in Egypt. It originally opened in 1864 and operated successfully until former president Gamal Abdel Nasser embarked on a nationalization plan in 1956. A year later, the Egyptian government founded Bank of Alexandria to take over the operations of Barclays Bank DCO.
Barclays re-entered the Egyptian market almost 30 years ago in a joint venture with Banque du Caire. In 1999, Barclays Bank PLC became the majority shareholder, increasing its stake in the bank to 60 percent. In March 2004, Barclays Bank acquired the remaining 40 percent from Banque du Caire, attaining full ownership and control of business operations.
The recent changes have had a positive effect on the bank as Barclays Bank Egypt has benefited from the international bank's expertise in the financial sector by introducing new products and services, raising the customer service benchmark as well as making use of the extensive Barclays network and systems worldwide.
Although it has been traditionally known as a corporate bank, Barclays has been actively expanding its retail banking with the introduction of new products and services. "We did not have credit cards [before]. In record time, just four months after the launch, we are the market leading issuer of credit cards in Egypt, having a 60 percent plus market share of all new cards issued in Egypt every month, El Gibaly said.
Moreover, the bank's car financing scheme has enabled it to consistently acquire 35 percent of the market share of all new cars bought in the Egyptian market every month.
Barclays is driven by a motivating slogan: Banking Reinvented. "What makes us different is that we deliver our services and products in a fashion that is relevant to [the consumer]. No other bank offers a 60-second car loan approval. In credit cards, we are the only bank that offers a Premiership Card, which is the Premiership League of the UK, El Gibaly said.
Barclays Bank Egypt has most recently pledged its dedication to its SMEs, offering full-fledged banking services tailored to the needs of this sector. The bank has an independent SME credit head and team.
Barclays offers SMEs custom-designed solutions. It is considered a pioneer in offering consultative services and developmental training to SME clients by experts in various domains. Consultations cover general business topics such as finance, accounting, business administration, and project management.
"SMEs are an integral part of the economy, in fact they are a large part of the economy. If you want to reduce unemployment or generate employment opportunities, you encourage entrepreneurship, El Gibaly said.
Supporting SMEs will put the nation on a fast track towards a free market, where the forces of supply and demand drive economic growth. "Now that we have robust socioeconomic indicators and robust economic growth measures, it is the right time because people have more disposable income and banks are having less problems - being able to extend credit, he said.
SMEs make up around 55 to 60 percent of the total GDP of any developed country. "I don't think that this is a culture that has yet taken off here because we are relatively conservative as Egyptians. We've always been taught that the masses will be granted free education, when you graduate the government will give you a job. We've always been taught that someone else will take care of you, El Gibaly said, "I think that is diminishing by the day because the government is trying to empower the individual by saying: your future, your destiny, make it happen.
The government's decision to remove subsidies and privatize public enterprises is a sign that the new economy allows the individual to "make their own destiny happen.
As a new sector in Egypt, the SME domain has its share of hurdles to overcome. To develop, the sector needs professionals with the savvy to deal with SMEs. "The biggest challenge facing the industry as a whole is to truly think with the SME mentality. The problem that most banks and banking professionals face here is that we don't have a proper SME business, we have some charity given by enterprises on a micro level, El Gibaly said.
Despite the challenges, many banks are recognizing the profit potential in focusing on SMEs. "All banks cannot compete for the same pool of large corporate companies. In order to succeed in Egypt they [banks] have to look at all the other segments, he said.
Barclays Bank Egypt is working in collaboration with the Social Fund for Development (SFD) and has sponsored the first International Exhibition for SMEs sponsored by the SFD.
"We need to create an SME business banking culture, that's the biggest challenge, El Gibaly said.


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