Egypt's banks are in a two-week sprint. Three accounts, three cards, no minimum balance. This is under the central bank's Farmer Day campaign, and the central bank says that 79% of adult Egyptians — more than 56 million people — already hold active accounts. New rules now let banks sign up customers without a branch visit. The race is no longer who gets banked. It is who turns accounts into deposits, credit, and profit. Joining me now is Dr. Mina Beshara, Group CFO of Pharma Overseas and Associate Professor of Finance. Welcome back to the show.
Hi Bassel. Thank you for having me again.
You led a university team into the top ten of the central bank's Fintech Got Talent competition, building a platform that teaches children how to manage money. How wide is the gap between Egyptians owning an account and actually using finance?
In 2020, Egypt started adopting financial inclusion. We had back then 33% of Egyptians having a bank account with a bank or Egypt Post. Now we have jumped to a much higher percentage, but this includes mobile wallets. My rough estimate for bank account holders who are actively seeking banking services — debit and credit cards, opening accounts — is around 35 to 40 million Egyptians. Banks will keep chasing customers, offering them credit cards, instalments, and loans so that the accounts will turn profitable at some point. The competition is now between traditional banking and new technology. Virtual banks have received licenses. When you think about it, do I go and wait for my turn for an hour at a bank, or do I log in with my face ID and do every transaction I want? The future is very bright for technology.
The headline is 79% inclusion. As both a CFO and a finance professor, how much of this is genuine economic activity and how much is an account that opened and went quiet?
Most of these are genuine accounts. Those who are actually non-bankable would never be exposed to banking by any means. They prefer non-banking systems entirely. The difference is who is profitable for the banks and who just opened an account or a mobile wallet for basic daily transfers. That is the huge difference.
Now that the central bank has approved rules letting banks verify customers entirely online, does remote onboarding change which institutions win the next wave of customers?
I believe Gen Z will never visit a bank in their entire life. If I can do something virtually, I would never do it in person. Younger generations will prefer everything to be as quick and as easy as possible. I do not think anyone will go to a bank to open an account. They will rely on digital banks rather than going to a traditional bank and having to do every transaction through customer service.
What does a dormant account actually cost a bank and what has to happen for an included customer to become a profitable one?
Banks chase customers because they prefer a huge customer base. Even if a low percentage converts, the bank will be profitable. Banks want payroll accounts, bank transfers, the largest customer base possible. Even if any percentage becomes active, they will use simple services like printing a bank statement for a visa. It is still chargeable. The cost of issuing a card is less than $1. Acquiring a customer for below 100 Egyptian pounds — the bank will retrieve that cost in the first month. It depends then whether this customer is just here for having an account or will use other services.
The campaign targets farmers and seasonal workers. Is being built around seasonal cash flow a genuine growth market for Egyptian banks or a risk they are not yet priced for?
It is 100% genuine as long as you have a solid model. Land itself as a guarantee — then the bank will be more than happy to lend, because if every season the farmer makes a certain amount, the bank keeps counting interest until the next season comes. It is only a problem when someone does not possess the real asset. But if you own the asset itself and it is a guarantee for the bank, I do not see any problem with lending to seasonal businesses.
Thank you, Doctor Mina.
Thank you. My pleasure. Thank you so much.
