Microfinance sector contributes less than 1% of Egypt’s GDP: Experts

Microfinance sector contributes less than 1% of Egypt’s GDP: Experts

The microfinance portfolio in Egypt has recorded EGP 26 billion, which is under 1 percent of the country's GDP of around EGP 4 trillion, chairman and CEO of Decode for Financial and Economic Consultations Mohamed Yousef said during a virtual panel held on Sunday to discuss developments in the microfinance industry amid the coronavirus crisis.

Yousef discussed the contribution of microfinance to Egypt's GDP and how the sector can benefit from the potentials that have arisen from the COVID-19 crisis.

Yousef said that the Central Bank of Egypt (CBE) and companies that extend microfinance services should introduce more facilities to the sector, including postponing loan instalments to mitigate financial burdens on the sector's clients, as well as expanding in technology solutions to reach clients easier.

He added that the COVID-19 crisis has caused disruptions in global demand, economic slowdown, bankruptcy, supply chain disruptions and investments delays. Yousef said these challenges have resulted in a purchasing managers index decline of up to 44.6 percent, caused exports to decrease by 32.3 percent, and imports to drop to $4.2 billion in April, down from $7 billion in April 2019.

Regarding the providing of microfinancing, Yousef said that the Egyptian market has 40 banks,