Amwal Al Ghad congratulates Mohamed Farid on his appointment as Egypt financial regulator chief    Saudi Arabia to launch company to attract $10 billion investments in Egypt    China's foreign exchange reserves jump to $3.104 trillion – SAFE    Egypt, South Korea to perform Pyramids Air Show 2022 Today    Egypt: Sisi appoints 73 female judges in the Court of First Instance    Egypt closer to export COVID vaccines after reaching 2nd highest WHO classification    Spain: prosecutor seeks 8 years sentence for Shakira over tax evasion    Egypt: Alamein Art Festival kicks off a collection of recycled installations    Russia delivers test kits of monkeypox to Egypt    John Legend enjoys family trip in Egypt    Sisi: Egypt wants to join BRICS    Egypt: street photography will no longer require permits    Sisi: Egypt determined to transition to low-carbon economy    Sisi, Biden discuss cooperation between two countries    Egypt's athlete Basma Emad wins bronze in weightlifting in Mediterranean Games    Congo needs Egypt's expertise to diversify its economy – FPI official    Noura Al-Mutair – first Gulf female boxer in World Championships    Egypt to play key role in integrating water, climate issues globally – World Bank official    Maha karara joins AAIB as Head of Corporate Communications, Sustainability    Egypt works on charting cooperation strategies with international institutions for 5 years: Al-Mashat    Over 2.4 million newborns examined for hearing impairment: Health Ministry    Netflix releases trailer of Arab adaption of 'Perfect Strangers' film    Balqees to headline concert celebrating launch of streaming giant LIVENow in MENA    Sawsan Badr to be honoured at Aswan Women Film Festival    MP Abdel Hady Al-Qasby calls government to facilitate and support NGOs    Al-Sisi follows up on 'Great Transfiguration Project' in St. Catherine    Cairo, London stress need to strengthen cooperation to face climate change    Foreigners account for 22.6% of Egypt's T-bills issuances in 1H 2021: CBE    Egypt's ambassador to Italy passes away    Egypt confirms readiness to help African countries face terrorism and extremism    An estimated 235 million people needed humanitarian assistance and protection in 2021, an increase of 40% compared to 2020: IOM Egypt    Egypt, DRC discuss water cooperation during WYF    Egypt, DR Congo discuss boosting bilateral cooperation during WYF    Cameroonian police probe assault on three Algerian journalists covering AFCON    Pharaohs start AFCON 2021 campaign with fierce clash against Nigeria    Foreign Ministry opens capacity building course for French-speaking African diplomats    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.



Experts debate role of banks in supporting competitiveness
Published in Daily News Egypt on 05 - 12 - 2010

CAIRO: “Financing the private sector is a real problem in Egypt, and [the country] would have [grown] at a faster rate if financing was more readily available to medium and smaller [sized] companies,” said Mohamed Taymour, the chairman of Pharos Holding, at a conference last week.
Banking institutions have not been successful in fueling private sector growth, since they have somewhat failed in helping companies grow, Taymour said at a session discussing the role of banks in supporting competitiveness.
Taymour pondered aloud as to whether or not the banking sector's missed opportunity could be attributed to the government's crowding of the private sector, creating an investment environment that makes it more attractive for investors to invest their money into government treasury bills. Taymour added that the loan-to-deposit ratio is currently 50-55 percent — much lower than the global average.
“I'm not here to defend the banks, and I'm the first one to point the finger at myself if something is wrong,” responded Basel El-Hini, the managing director of Banque Du Caire.
According to El-Hini, if central bank regulations and requirements for deposits were taken into consideration, the country's loan-to-deposit ratio would be much higher.
Small- and medium-sized enterprises (SMEs) do not have the proper financial tools and systems to warrant financing, El-Hini said, pointing to the importance and lack of financial information necessary to properly assess a loan.
Egypt's businesses suffer from the lack of information culture, an issue that needs to be tackled by businesses and the government, said Dora Fiani, CEO of Coface Egypt.
“It is not difficult to understand that you need to check on your client before dealing with them, and the need for looking for information about your customer, and on the borrower's side, making the information available,” Fiani stated.
“Most small and medium companies are not eligible for financing on the corporate level due to the financial assessment requirements of the CBE [Central Bank of Egypt] ,” said El-Hini. “If there are any who are eligible, I guarantee that they will be financed.”
Samy Hamboly, the chairman and CEO of Ameco Medical Industries — a business registered in the Nilex as an SME — talked about his company's experiences in acquiring startup funding.
“When building our factories, it was difficult to receive any facilities,” Hamboly said. “We did it on our own, and we increased our capital on our own. No bank would finance us.”
Eventually Hamboly's company was able to acquire a loan through a program offered by the European Investment Bank and the National Bank of Egypt. Hamboly, however, mainly credited the European side for his company's loan, stating that the Europeans' guidance and support enabled his company to expand and increase its profits.
Awad Fawzy, himself an SME owner currently in search of financing, affirmed that there is indeed a lack of funding available for SMEs like his company and asked the bank representatives at the conference if they were currently offering any products that target SMEs.
El-Hini stated that he hopes banks will start to devise retail programs that cater to SMEs, and that Banque Du Caire is currently looking into starting such a program.
“For SME financing, I don't think we should wait for these instruments and financial capabilities because the SMEs are not eligible and will not be eligible soon — not enough financial information is available about them and we cannot wait for this culture to be instilled,” El-Hini added.
Mounir El-Zahid, the managing director of HSBC Egypt, spoke of his bank's recently established website — Yallabusiness.com — which helps SMEs organize and structure their financials, providing them with expert advice and guidance on a wide range of sectors and import/export activities.
“We are all trying to raise awareness as we recognize the importance of this sector to the economy,” El-Zahid said.
Another main problem raised at the seminar is that facilities for long-term investments are not as readily available in Egypt as they are in other countries. Fouad Younis, a developer currently involved in many infrastructure projects, said that this lack of long-term investment facilities was a very large concern for both himself as well as many other land developers. In addition to land development, the inadequate sources for long-term investment have raised problems for other sectors as well.
“Financing for agriculture has been quite a challenge because it's a long-term investment, and the framework for that has not really developed here,” said Ramzi Nasrallah, vice president of Wadi Group, a family-run agri-business firm.
According to Nasrallah, banks were reluctant to grant a growing business a loan that would last longer than five or six years and only offered loans with high interest rates. As a result, Nasrallah stated that the Wadi Group instead pursued financing from outside the country.
Nasrallah added that the Wadi Group approached the International Finance Corporation (IFC) and was granted a long-term loan that was more affordable. In addition to better loan terms, Nasrallah stated that the guidance his company received from the IFC was superior to the guidance provided by banks in Egypt as well.
“If I compare Egyptian banks and our relationship to the IFC, we will find it is very different,” said Nasrallah. “They look at our strategy and our figures and they act as shareholders; local banks do not really get into that, and do not really help or guide us in our investments even though they have valuable market information.”
El-Hini encouraged the Egyptian government to develop and reform the corporate bond market, which would increase long- and medium-term facilities.
He concluded that this issue is a point of concern for him “as a member of the banking community, and as an Egyptian” who understands the importance of infrastructure and private public partnerships — each of which desperately require this type of funding in order to succeed.


Clic here to read the story from its source.