Financial Literacy for Financial Inclusion, Egypt Case - Mona el Baradei

Financial LiteracyFor Financial Inclusion

Egypt Case

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Role of Central Banks in Financial Inclusion

• In emerging economies, Central Banks have a broader mandate beyond the traditional mandates of monetary and financial stability and banking system supervision.

• One of these mandates is to develop the banking system with the aim of capturing the unbanked categories through financial inclusion regulations and policies.

• Based on that, the Central of Egypt adopted a Financial Literacy and Inclusion Initiative.

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Why the Initiative Came from the Central Bank of Egypt?

- Population: 86.4 million (2014)- Youth : 25% and children :31%of the population

- Real GDP growth rate (%):

- GDP/ capita (current US $) :

* sources of the data are: CAPMAS, CBE, World Bank, ISDC

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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

3.2 4.1 4.5 6.8 7.1 7.2 4.7 5.1 1.8 2.2 1.5

Why the Initiative Came from the Central Bank of Egypt?

- Saving rate: 13% of GDP (2012) - Illiteracy rate : 29.7% (2010)- Unemployment rate:13.4% (2013)- 75% of the unemployed are between 15 and 29 years of age- Male unemployment rate: 9.8%, Female unemployment rate: 25.1%

(2013)- SME’s: 2.5 Million representing 75% of the total employed workforce- Poverty rate: 26.3% (2012/2013) - The lowest 30% of the population receive 13.2% of National Income - The highest 10% of the population receive 26.6 % of National Income

(sources of the data are: CAPMAS, CBE, World Bank, ISDC)

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Why the Initiative Came from the Central Bank of Egypt?

- Contribution of the informal sector to GDP: around 40% and contributes about 70% of the private sector

- Over and above these indicators, only 10% of the Egyptian population are bankable.

- All of these reasons led the Central Bank of Egypt to initiate several projects serving the Financial Inclusion and Financial Literacy purposes

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Why Did the Egyptian Banking Institute (EBI) Take the Lead?

• EBI is the Official Training Arm of The CBE• The First Internationally Accredited Training Institute

in The MENA Region by ACCET• 40 Member Banks (All Banks in Egypt)• Networking Access to All Egyptian Authorities &

Financial Stakeholders• Accessibility to Both The Supply & Demand Sides of

Financial Inclusion • International Alliances & Networks Memberships• 1800 International & National Experts

EBI Financial Literacy Activities As a Prerequisite to Financial

Inclusion

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Research Phase (2006-2010)

• Understanding worldwide best practices• Identifying essentials for applying financial literacy in

Egypt(Through conducting a number of desk-based researches,

market studies and speculations)

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Planning and Partnership Phase (2010-2012)

1. Conducting focus groups and surveys

2. Initiating collaborations with International NGOs, Donor Organizations, & Banks

3. Exploring similar countries challenges and experiences

4. Bringing Financial Education Training Material from several International Organizations - (Aflatoun- Plan- Injaz)

5. Training and motivating Banks on developing child & youth friendly products

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Implementation Phase (March 2012- present)

1. Initiating “Shaping the Future” National Initiative for Financial Literacy, with Logo and a dedicated team.

2. Establishing memberships in key organizations (Board Membership of CYFI, Full Membership of International Network for Financial Education INFE/OECD)

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Implementation Phase (March 2012- present)

3. Conducting Financial Education awareness and training (10,000++ beneficiaries in 2012)

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Implementation Phase (March 2012- present)

4. Developing Entrepreneurship training programs (4 Rounds, 60 Beneficiaries)

5. Conducting Awareness sessions for SMEs (4 Beneficiary Banks, 35 Participants)

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Implementation Phase (March 2012- present)

6. Conducting awareness sessions in Governmental and Private Universities (4 Rounds, 1000 Students)

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Implementation Phase (March 2012- present)

7. Celebrating the Global Money Week (GMW), 2013 & 2014

– GMW 2014 achieved an outreach of 360,000 Children & Youth

– Conducted TOT sessions for 2400 employees of the Ministries of Education, Youth, and banks employees

– Conducted 15 out of 20 activities set by CYFI

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Implementation Phase (March 2012- present)

8. Receiving Nominations for two International Awards by CYFI:

– GMW 2014 Award - Country Award

9. Establishing Egypt’s National Committee for Drafting Financial Literacy Strategy

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Egypt Financial Literacy National Committee

under the auspices of

H.E. The Governor of The Central Bank of Egypt

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The Role of the National Committee

To determine the current situation with regard to Financial Literacy in Egypt as a foundation on which to develop the Financial Literacy strategy. This involves:

1.Agreeing on Financial Literacy definition in Egypt

2.Identifying stakeholders as well as roles and responsibilities

3.Defining areas of intervention and identifying barriers to Financial Literacy

4.Developing the National Strategy for Financial Literacy; setting an action plan with clear milestones and timelines

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Stakeholders of Financial Inclusion(Members of the National Committee)

i. Regulators – The Central Bank of Egypt, The Egyptian Financial Supervisory Authority (EFSA), Stock Exchange Authority, Ministries of Education, Higher Education, Finance, Youth & Sports, Government Agencies and Programmes (Social Fund for Development).

ii. Academic Institutions – Universities (Cairo University, Faculty of Economics & Political Science), Training Institutions (The Egyptian Banking Institute).

iii. Development Partners and Experts – International Finance Agencies, Donor Institutions, Development Partners, Technical Experts and Advisers, the World Bank, GIZ, CGAP

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Stakeholders of Financial Inclusion(Members of the National Committee)

vi. Other Financial Institutions – Egypt Post, and Alexandria Business Association (NGO).

vii. Banks – Commercial Banks, Retail Banks and SME & Microfinance Banks (National Bank of Egypt, Banque Misr, Commercial International Bank, and Arab African International Bank).

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Conclusion• The Central Bank of Egypt and the Egyptian

Banking Institute strongly believe that raising the bankable population and including children, youth and the financially excluded citizens in Egypt will lead to the growth of saving, investment and economic growth rates, as well as poverty eradication which will bridge the inequality gap and stimulate sustainable growth.

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TIMEFRAME

. Thanks to our partners

Shaping the future Supply & Demand Partners

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Partner Banks Partners of outreach Partners of Capacity Building

Partners of Innovation Partners of operational sustainability

Partners of Products Inclusive

partners

Demand Partners:

Shaping the future Supply & Demand Partners

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Module No.-25