CAIRO: With modern banking services becoming more and more sought after by diverse sectors of the population, Egypt's banks are hurrying to catch up with the trend by offering savings and checking account plans tailored specially for certain groups. While the current financial crisis may have weakened consumer confidence, especially in terms of investment, Egypt's banks continue to enjoy healthy liquidity and a positive outlook. Traditionally, the national banking network has managed to maintain strong levels of liquidity due in part to high minimum deposit levels for retail accounts. Even now, many banks require a minimum LE 2,500 deposit for a basic checking account, with much higher minimum levels for accounts with extra services. A no-interest checking account can require as much as LE 2,000 in initial deposits, so small earners and young people looking to open an account are left with few options. While Egypt's banks have yet to pioneer family banking services that allow parents to manage accounts in conjunction with their children and most do not offer options for low-income individuals, some banks have begun to offer a diversified set of services in response to growing demand. For example, Barclays Bank has introduced the "youmi (daily) account, a current account with a minimum deposit of LE 1,000 that allows its holder the advantages of a current account while earning interest in the same way as a savings account. Tiered interest rates are offered based on the level of deposit, allowing individuals of different income levels to partake of the service. Options for low earners are also offered at Bank of Alexandria, which has expanded its services in recent years to cater to this sector of the population. Bank of Alexandria offers a standard current account with no minimum deposit. This account is open to all income levels and can be made in Egyptian pounds or a major foreign currency. Customers with a Bank of Alexandria current account are also eligible for other products from the bank, including internet banking, check books and VISA electron cards. According to a customer service representative at the Bank of Alexandria, the bank's current account is popular with small depositors and young people looking to begin using bank services. "Even though they don't have a lot of money to put in the bank, youth and low-income workers want to use the services offered at the bank. We make that possible by not applying a minimum deposit. Also, our branch network covers all areas of Egypt and is accessible to the whole population. NGSB has also created a scheme to help young people get involved in the banking sector. The bank's minor savings plan allows parents to begin accounts for their children with a minimum initial deposit of LE 50 that can be added to over the years and taken over by the child when they reach the age of 21. This plan, according to a representative at the bank, allows the young adult to have money already placed in the banking system to begin a new current account or investment plan once reaching adulthood. "Most youth don't have the LE 2,500 needed to open a current account, but this plan allows their parents to help them get a head start and use banking systems from a young age. Other new accounts, such as Ahli United Bank's "My Daily Account plan, motivates customers to save by reporting interest earnings on a daily basis. This account, with an LE 5,000 minimum balance is not accessible to all, but it does offer tiered interest to help customers make the most of their savings. In general, interest rates on savings accounts in Egypt's major private banks are high by international standards, running at about 6.5 percent currently. Public banks such as the National Bank of Egypt normally offer slightly higher interest rates on savings accounts and more options for small depositors and small businesses. However, as far as small businesses are concerned, recent years have shown an opening up of options for raising capital as more of Egypt's banks realize the benefits of small-scale lending. While Bank of Alexandria is the one of the only private commercial banks to have made a serious foray into microfinance at present, CIB and HSBC now offer finance options for small and medium enterprises and have begun expanding relationships with this client profile. As Egypt's banking sector expands bolstered by a growing credit infrastructure and increased demand for diverse services, the country's banks should continue to introduce new products to cater to individuals, families, small businesses and low-income individuals. With these new products in place to serve consumers, prospects for the development of the banking industry seem positive.
