Egyptian public, private sectors off on Apr 25 marking Sinai Liberation    Egypt's SCZONE welcomes Zhejiang Province delegation for trade talks    Beltone Venture Capital partners with Citadel International to manage $30m startup fund    S. Africa to use contingency reserves to tackle debt    Gaza health authorities urge action for cancer, chronic disease patients    Transport Minister discusses progress on supplying new railway carriages with Hungarian company    Egypt's local gold prices see minor rise on April 18th    Expired US license impacts Venezuela crude exports    Taiwan's TSMC profit ups in Q1    Yen Rises, dollar retreats as G7 eyes currency calm    Egypt, Bahrain vow joint action to end Gaza crisis    Egypt looks forward to mobilising sustainable finance for Africa's public health: Finance Minister    Egypt's Ministry of Health initiates 90 free medical convoys    Egypt, Serbia leaders vow to bolster ties, discuss Mideast, Ukraine crises    Singapore leads $5b initiative for Asian climate projects    Karim Gabr inaugurates 7th International Conference of BUE's Faculty of Media    EU pledges €3.5b for oceans, environment    Egypt forms supreme committee to revive historic Ahl Al-Bayt Trail    Debt swaps could unlock $100b for climate action    Acts of goodness: Transforming companies, people, communities    Eid in Egypt: A Journey through Time and Tradition    President Al-Sisi embarks on new term with pledge for prosperity, democratic evolution    Amal Al Ghad Magazine congratulates President Sisi on new office term    Tourism Minister inspects Grand Egyptian Museum, Giza Pyramids    Egypt's healthcare sector burgeoning with opportunities for investors – minister    Egypt starts construction of groundwater drinking water stations in South Sudan    Russians in Egypt vote in Presidential Election    Egyptian, Japanese Judo communities celebrate new coach at Tokyo's Embassy in Cairo    Uppingham Cairo and Rafa Nadal Academy Unite to Elevate Sports Education in Egypt with the Introduction of the "Rafa Nadal Tennis Program"    Egypt's powerhouse 'The Tank' Hamed Khallaf secures back-to-back gold at World Cup Weightlifting Championship"    Financial literacy becomes extremely important – EGX official    Euro area annual inflation up to 2.9% – Eurostat    Egypt builds 8 groundwater stations in S. Sudan    BYD، Brazil's Sigma Lithium JV likely    UNESCO celebrates World Arabic Language Day    Motaz Azaiza mural in Manchester tribute to Palestinian journalists    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Egypt's Consumer Spending on the Rise
Published in Daily News Egypt on 26 - 11 - 2006

Credit bureau and electronic payment critical in supporting sound credit decisions
CAIRO: The establishment of a credit bureau and the increasing use of electronic payments are two important factors that support sound credit decisions to help spur consumer spending, which in turn leads to higher levels of economic growth for Egypt.
In the Al Mal conference Credit Bureau: Toward a Sound Credit History in Egypt , Tarek Elhousseiny, Vice President and General Manager of Visa Egypt and Libya, highlighted the significance of consumer spending. As a major component of GDP, consumption is the stimulant behind almost every aspect of the economy.
According to the Ministry of Planning, household consumption in Egypt accounts for the largest portion of GDP, having reached 71.6% in FY 2004/5 and expected to reach 83.1% in FY 2005/6.
Egypt s personal consumer expenditure, a key measure of consumer spending, has increased in nominal terms from $60.5 billion in FY 2005 to $68.4 billion in FY 2006, said Elhousseiny, and is projected to rise steadily through to 2011.
As a mechanism that facilitates the safe and low-risk flow of money throughout the financial system, a credit bureau stimulates consumer spending via providing broader access to credit. For this reason, numerous developing economies have chosen to harness the power of credit bureau to increase the volume of secure lending and therefore fuel sustainable economic growth.
In Egypt, access to credit is limited. According to the Minister of Investment HE Dr. Mahmoud Mohieldin in a previous quote, 0.19% of clients received over 52% of bank credit in December 2005. Credit in Egypt has also been hampered by a relatively high rate of non-performing loans which conservative government figures estimate at a total of 15%, including both corporate and consumer loans.
Underlining the importance of a credit bureau in overcoming this challenge, Elhousseiny stated, Globally, institutions participating in credit bureau reported decreases of 25% or more in defaults and in processing time for lending decisions.
Elhousseiny went on to highlight the impact of electronic payments on increasing levels of financial transparency, thereby assisting the integration of Egypt s vast informal sector into the formal economy.
To help ensure the success of a credit bureau, its establishment needs to go hand-in-hand with promoting electronic payments, he said. Global Insight, an independent global econometric forecasting agency, has shown that a 10% increase in card payments could bring a 0.6% increase to Egypt s GDP.
Visa International supports credit bureau worldwide through its partnership with the International Finance Corporation (IFC), the private sector arm of the World Bank Group, to support the development of credit bureau in developing countries.
Visa believes that the establishment of credit bureau is a primary tool to increase access to financing, improve portfolio monitoring and accelerate economic development.


Clic here to read the story from its source.