The World Bank Group’s most recent global findex database found that bank account ownership in Egypt increased significantly between 2011 and 2017. However, wealthier adults are still twice as likely as poorer ones to have an account and the share of adults who reported having saved formally over the previous 12 months was just 5%, with family and friends the largest source of borrowed funds.
The World Bank estimates that digitizing private sector wage payments could reduce the number of unbanked adults in Egypt by up to a fifth. CIB agrees that digital solutions are the key to reaching the unbanked and underbanked segments of the Egyptian population and they form a vital element of its strategy for targeting the unbanked and underbanked segments of population.
The Making Finance Work for Africa Partnership initiative notes that the percentage of the adult population that made or received a digital payment in the past year rose from 8% in 2014 to 23% in 2017.
CIB is collaborating with national entities and regulatory bodies such as the Federation of Egyptian Banks, the Central Bank of Egypt and others to achieve inclusive economic growth and facilitate Egypt’s transformation into a cashless society.
By sharing its technical expertise and newly adopted technologies to help provide financial services to the unbanked and underserved populations, it is able to support Egypt’s financial inclusion strategy – a strategy which can be expanded into other parts of Africa where CIB is actively working to address the large percentage of the continent’s population that remain unbanked.
Broadening horizons
In April 2020, CIB announced that it had acquired 51% of what is to be renamed Mayfair CIB Bank in Kenya as part of its mandate to explore and assess opportunities across Africa, help Egyptian customers benefit from regional integration efforts across the continent and take advantage of the opportunities available from membership of the Common Market for Eastern and Southern Africa (COMESA) and the African Continental Free Trade Agreement (ACFTA).
The acquisition of a majority stake in Mayfair Bank made CIB the first Egyptian bank to establish a presence in Kenya. The bank’s African expansion strategy acknowledges the opportunities that the continent offers and its presence in Kenya reflects its commitment to promote intra-African integration and business growth.
The objective is to widen the trade corridor between Egypt, Kenya and its neighboring countries, and facilitate the presence of Egyptian and international corporations with interests in Kenya while contributing to the growth of Kenyan corporates and SMEs.
CIB’s growth into Africa is part of a story of Africans reclaiming control of their financial apparatus. At the beginning of 2019, CIB had 10 correspondent banks in Africa - when it wanted to work with any other party, it typically did so through a European intermediary. Today, it covers 18 African countries through a diverse network of correspondent relationships with 24 African banks as well as pan-African banking institutions.
As CIB further broadens its geographical reach, it will continue to explore and assess innovation opportunities in the continent while creating a more connected future for Africans.
In April 2019, CIB established a commercial representative office in Addis Ababa, Ethiopia with the aim of strengthening its relationships with Ethiopian banks, promoting Egyptian exports and gaining market insights. This office represented the bank’s first step to operate in one of the most attractive markets in the region.
CIB’s entrance into Ethiopia has allowed it to further its expansion strategy. The commercial representative office works closely with Egyptian corporations operating in Ethiopia, as well as international and local financial institutions to offer creative solutions for their foreign and local financing needs.
The office also maintains and builds relationships with Egyptian expatriates in Ethiopia and focuses on developing strong ties with Ethiopian banks to pave the way for establishing local market intelligence within the country.
CIB is always on the lookout for productive, organic growth opportunities that diversify its operations, balance sheet structure, and sources of income. Its mandate to explore and assess opportunities in Africa involves building a bridge for Egyptian customers to benefit from regional integration efforts across the continent and take advantage of the opportunities available from COMESA membership and the ACFTA.
Given the fundamental similarities the region shares with Egypt, CIB management has concluded that Africa (and specifically the east African countries) is a natural geographical extension to Egypt and presents lucrative growth opportunities.