He said CIB aims to attract more customers to the banking sector by facilitating access to banking services and reaching out for them through traditional branches and digital channels.
According to El-Toukhy, CIB maintains its promising expansion plan with the goal of strengthening their network of branches and widening its scope of reach through the inauguration of new branches, located in diverse areas across the country.
In addition to branches, the bank also launched Smart Wallet service as part of their diverse alternative channels for providing banking services to all citizens.
What are the main products that contribute to the retail portfolio?
Personal loans account for the largest proportion of the bank’s retail portfolio followed by credit cards, and overdraft fees — for both individuals and companies — car loans and real estate finance.
What is the ratio of retail portfolio to total loan portfolio of the bank?
Retail loans account for nearly 20% of the total loan portfolio of the bank.
How can the bank expand its reach to more customers?
In CIB, we consider all segments of society based on their life styles and give each segment a bundle of products that caters to the need of each segment. We carry out geographical expansion by opening new branches, in parallel with expanding alternative channels, such as facilitating access to bank services through the internet and our newly introduced Smart Wallet.
What is your plan for geographic expansion?
A total of 21 new branches were inaugurated in 2015, bringing the bank’s current network to 187 branches. We will keep capitalising on our network, further expand in 2016, and spread our branches across the country to ensure easy access for customers throughout the country.
What is the bank’s strategy with regards to modern technological services?
The bank recently launched the Smart Wallet, a new, modern product that revolutionises the traditional payment methods.
The Smart Wallet service will be available in major provinces at first, mainly Cairo and Alexandria but eventually, in collaboration with the bank’s partners, will reach all segments of citizens throughout Egypt, including villages and hamlets.
This service supports the state’s financial inclusion drive, by offering banking services to all segments of society, and accesses the maximum number of customers possible at the lowest cost.
The Smart Wallet allows, for the first time in Egypt, funds deposit and withdrawal from the wallet through CIB ATMs without using cards. It also enables its users to directly pay for purchases through smart phones by following simple steps.
Users can also pay all mobile phone, internet, car license renewal, electricity bills, and instantly transfer money to other Smart Wallet users. Moreover it allows withdrawing and depositing funds through Fawry outlets.
Smart Wallet users are offered internet purchasing cards with a certain limit for safer online shopping. Users can also easily connect the wallet to their bank cards for easier transactions. I believe this service will see such a large turnout of all age groups considering the value-added services and the simplicity of dealing with the offered applications.
The bank will also launch an online banking service for smart phones during the first quarter (Q1) of 2016. Simultaneously the bank developed its internet services and introduced the Arabic version during the past year to fit and be appealing to all customers.
The bank also tailors special services and products that ensure satisfying the demands and needs of each category of customer, including services of loans and insurance.This categorisation aims to provide adequate, relevant services, and products to each and every category. The classification does not rely on the size of customers’ accounts but rather on their different lifestyles.
The bank will have various segments including payroll customers and the youth, who top our list of priorities.
Will recent graduate be able to open bank accounts if they do not have enough money?
We have been considering this. We seek to abolish the minimum deposit to open bank accounts for youth and offer them products that fit their salaries and their ability to save.
I would like to point out that the cost of serving young clients was more than the revenue achieved however in light of the technological evolution that has occurred in recent times, the cost was brought down much, which enabled banks to provide services for youth as well as VIPs.
Does the bank focus on particular sectors for possible expansion through retail sector?
As I mentioned earlier, we are moving in parallel lines and in all directions to attract the largest possible number of customers.
I think that the field of credit cards is very promising. The total number of credit card holders in Egypt is about 2.5m, which is very low compared to the population.
There is a problem related to the difficulty of getting those cards from banks. How will you facilitate this?
Banks used to rely on the guarantee presented from the institutions where people work as a main condition to providing them with credit cards. However after establishing The Egyptian Credit Bureau, this issue changed.
Now banks care more about the person’s credit history itself, regardless of where they work, which will make it easier to obtain credit cards.
You said the bank supports the state towards financial inclusion. Do you believe this goal to be achievable?
Certainly, this can be achieved. The ratio of Egyptians involved in the banking system to the population is very small compared to other countries that have similar conditions to the Egypt.
Figures show about 10 million of existing bank customers, excluding the Agricultural Bank and about 54 million citizens are eligible to vote, meaning that they can open bank accounts.
In light of high rates of illiteracy and poverty rates among Egyptian, do you think all those millions can deal with banks?
If we take a closer look, we find that all of those citizens have mobile phones, regardless of their education or living standards. We can attract those customers to join the banking system since most banks now are moving to provide their services through mobile phones.
Moreover modern technological services or so-called alternative channels to provide banking services have eliminated the dread that citizens felt when they dealt with banks through traditional branches, which also helps attract them to banks.
Banks also aim to facilitate transactions for citizens with state agencies. You do not have to waste your time running around to pay your different bills, whether traffic tickets, phone, water, or electricity bills. You can pay them all through simple steps using your internet or mobile phone.
What is needed to achieve financial inclusion in Egypt?
We need to spread awareness of the importance of dealing with banks. I believe that this is the core to achieving financial inclusion in Egypt.
Federation of Egyptian Banks launched an awareness campaign called “You must have a bank” that was presented through field visits to places such as universities. The campaign is supported by all banks, including CIB, that play an important role in that matter.
Another noteworthy campaign initiated by CIB–Egypt was the publishing of a financial literacy book that focuses on advising citizens on financial planning, with the goal of spreading awareness of banking services. The bank also conducted a series of seminars, free of charge to the public, during which all topics covered in the book were discussed.
It is no secret that dealing with banks, joining the banking system, and merging the informal economy to the formal one will benefit the Egyptian national economy. CIB exerts all efforts to support financial inclusion in Egypt.
With respect to modern technological services offered by banks abroad, where does Egypt stand?
Though we are still little bit behind other developed countries in this regards, banks operating in Egypt have promising opportunities for expansion in the provision of these modern services. In fact foreign countries do not have this growth potential as banks have entered a phase of saturation, unlike the Egyptian market.
What is your comment on the programme launched by CBE to finance SMEs and what is required for success?
The Central Bank of Egypt (CBE) has taken the right steps according to the market’s requirements. Banks are ready to implement this programme, whether through liquidity for financing these projects, making an effort to reach out to youth and give them funding if necessary.
But offers from CBE and banks will not be enough, unless they are backed by the state and all its bodies to ease up the processes related to establishing and efficiently running small and medium enterprises (SMEs).