Non - Banking Financial

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In an era filled with economic and political challenges at the national, regional, and international level, Egypt’s economy kick-started a new phase in its history as the state strives to implement bold reforms to realise long-awaited goals. These circumstances necessitated the presence of a vision embracing an ambitious national strategy, which copes and integrates with the recent wide economic reforms to boost the role of the non-banking financial sector.
This came in view of our staunch belief that the non-banking financial sector can play a pivotal role in supporting reform and sustainable economic development plans. We seek to streamline the investment climate directly related to efficiency and development of the financial sector and its role in accomplishing financial inclusion and facilitating access to finance, which are the main remit of Egypt’s non-banking financial sector.

The current economic conditions require unorthodox and innovative solutions to provide up-to-date tools in a bid to suit various finance needs to prop up growth, increase investment, and create jobs. This supports our endeavours to maximise the benefit from the non-banking financial sector’s enormous potential to raise savings and direct them to segments and sectors unable to access other types of finance.

Over the previous years, huge effort was made to develop the non-banking financial sector, which outstandingly paid off. However, successive events and rapid development of business communities and their needs for innovative financial solutions have heightened the necessity for creating a clear-cut institutional framework to forge ahead with restructuring and development, along with managing a strategic plan to step up the role of non-banking financial sector markets to achieve its goals and ensure the continuity of follow-up and implementation. This stressed the importance of launching a unified national strategy for developing the non-banking financial sector.

The strategy is aimed to carry out structural and legislative reforms in the sector in an effort to enhance the capability of marginalised groups to improve their living standards such as access to education, healthcare, as well as the development of human cadres. This in turn paves the way for entrepreneurs to have a bigger role and bolsters the contribution of small- and medium-sized enterprises (SMEs) in economic growth.

Moreover, the strategy works on changing the notion of the non-banking financial sector from being denominated by numbers and indexes to a more efficient, modern, and dynamic sector that reacts more resiliently to development plans, and from a sector focused on growth to development, social justice-dependent one. And from a sector whose most of its services are only beneficial to major players into an inclusive one that attracts all entities and further supports SMEs to be the key driver for production and employment. It also seeks to engage all society segments to accomplish financial inclusion and reach marginalised and poor groups.

Relatedly, we seek to create a non-banking financial sector propping up gender equality and women empowerment. We also aim to turn it from a conventional sector into a technology, creativity, and innovation-based one to keep pace with latest developments and competition.

We look forward to having a sector that embraces good governance, sustains transparency, and curbs corruption. The challenges facing the non-banking financial services industry may be a real opportunity to unlock the sector’s potential by spurring innovation, creativity, and competition, and designating sound means to engage into the international financial system, and simultaneously  maintain stability of the national economy.

Many countries have launched similar strategies for the non-banking financial sector, which in turn had a significant impact on the sector’s development and stepped up its contribution to sustainable development and access to finance, and achieved justice in income distribution. Thus, postponement of orchestrating the sector’s national strategy or the absence of adequate support poses a threat to achieve much-anticipated objectives of recent economic reforms, structural measures, and competitiveness of Egypt’s economy.

We seek to set up a roadmap for the non-banking financial sector for the 2018–2022 period to achieve ambitious objectives, and at the same time taking into consideration the importance of maintaining stability and transparency of the financial sector and protect rights of stakeholders by accomplishing the following key goals:

1. Creating an inclusive non-banking financial sector that is conducive to economic growth.
2- Enhancing financial inclusion rates and contributing to accomplishing sustainable development.
3- Improving the national economy’s competitiveness and its attractiveness to overseas investments.
4- Enhancing the non-banking financial sector’s legislative framework.
5- Improving levels of good governance and sustaining the non-banking financial sector’s institutional framework.
6- Enhancing transparency and combating corruption.
7- Developing financial markets and innovating unorthodox financial solutions and services.
8- Achieving further openness of the non-banking financial sector to the global economy.
9- Realising better management of risks related to soundness and stability of the financial system.
10- Increasing awareness and financial culture.

We believe that the next four years will be a starting point for the non-banking financial sector and the Egyptian economy if we concentrate on developing and implementing the national strategy. We have to pay more interest to navigate the international financial sector’s successive challenges and developments to be able to engage into a formal, safe, and sound system that protects rights of all parties.

Finally, the Financial Regulatory Authority (FRA) would like to thank everyone participated in drawing up this national strategy whether they are from or outside FRA. Special thank is extended to Dr. Hatem El Banna, Dr. Mohammed Omran, Mr. Abdel Hamid Ibrahim, Dr. Sahar Nasr, Mr. Hisham Ramadan, Mr. Said Arafa, Mr. Adel Khashaba, Mr. Ahmed El Sayyed, Ms. Maha Rashid (trainee), and FRA’s departments and sectors, in particular the Central Department for Research and Policies, FRA’s team of researchers, and the Non-banking Financial Services Institute. FRA is also very appreciative of any sincere effort adding to the strategy in view of our belief that teamwork is the best means to achieve the desired goals.

Dr. Mohammed Omran
Chairman of the Financial Regulatory Authority (FRA)