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Egypt eyes digital transformation in non-banking financial services

Egypt eyes digital transformation in non-banking financial services
The micro-funding balances jumped by 40% to EGP 17.8 billion in Q1-20

Cairo – Mubasher: The Egyptian Financial Regulatory Authority (FRA) aims to achieve digital transformation in non-banking financial services such as micro- small-, and medium-sized (MSME) funding, stock market, mortgage, consumer financing, insurance, financial leasing, and factoring.

The digital transformation will help expand the base of financial inclusion and reduce costs of services, the FRA’s Chairman, Mohamed Omran, said in a virtual press conference held on Tuesday.

He revealed that the total value of compensations paid by insurance companies rose to EGP 5.1 billion in the April-June period of 2020, compared to EGP 3.6 billion in the prior-year period, reflecting an increase in claims resulted from the risks posed by the coronavirus (COVID-19) pandemic.  

Over the course of 2020, the total value of compensations paid by insurance companies increased by 3.3% to EGP 18.9 billion from EGP 18.3 billion in 2019, he added.

The value of premiums reached EGP 40.1 billion last year from EGP 35.2 billion a year earlier.

In addition, the value of financial leasing contracts grew by 4.8% to EGP 58.6 billion in 2020 from EGP 55.9 billion in 2019 and surged by 19.7% year-on-year (YoY) during the first quarter (Q1) of 2020.

The issuances of securitisation bonds rose to EGP 24.1 billion last year from EGP 22.1 billion in 2019.

The trading value jumped by 68% YoY to EGP 689.6 billion in 2020 from EGP 409.7 billion.

The value of traded stocks soared by 37% to EGP 311.6 billion from EGP 226.8 billion, while the value of traded bonds leapt by 107% to EGP 378 billion from EGP 182.9 billion.

The Egyptian Exchange (EGX) reported varied performance as the main EGX30 index fell by 22% YoY to 10,854 points, while the small- and mid-cap EGX70 EWI and EGX100 EWI surged by 69% and 42%, respectively.

The market cap value dropped by 8.2% to EGP 649.9 billion in 2020 from EGP 708.3 billion a year earlier.

Meanwhile, the micro-funding balances jumped by 40% to EGP 17.8 billion in Q1-20 from EGP 12.7 billion in Q1-19.

Over the course of 2020, the micro-funding balances retreated by 13.3% to EGP 18.7 billion, compared to EGP 16.5 billion in 2019.