Egypt's Financial Regulatory Authority (Photo: Al-Ahram)
Egypt’s Financial Regulatory Authority (FRA) launched on Sunday an initiative that aims to merge informal economic activities into the formal economy using digital payment instruments.
The Digital Financial Inclusion for 2021 Initiative targets micro-sized projects and their clients to encourage them to use digital payment instruments for their transactions amid the COVID-19 crisis.
Chairman of FRA, Mohamed Omran, expounded that the finance portfolio of funds, granted to such projects from NGOs and finance institutions worth EGP 18.2 billion, benefitted 3.2 million recipients to date.
He also revealed that the total transactions through digital, non-cash, instruments in Egypt — from December 2018 to the end of September 2020 — amounted to EGP 2.5 billion, with 60 percent of that amount dedicated to financing disbursements and 40 percent for repaying installments.
Projects that are owned and managed by women represented 60 percent of the clientele, according to Omran.
Omran expects that digital payments will witness a rapid and large-scale breakthrough by the end of the first quarter of 2021, especially for micro-sized projects, driven by the ongoing pandemic crisis.
E-commerce and digital payment industries in the Middle East, including Egypt, are expected to witness a significant growth in 2021, with nearly half of consumers showing a tendency to increase their online shopping over the year, according to a recent report released by UK-based payment systems provider Checkout.com.
Based on a regional survey, which polled more than 5,000 consumers in the UAE, Saudi Arabia, Egypt, Jordan, Qatar, Kuwait, Bahrain, and Pakistan, the report showed that using digital payments either over cash on delivery or bank transfers has risen significantly as consumers shop online more frequently in the surveyed countries, according to the report.
“Among those who shop online at least once a month, 62 percent usually pay by card or digital wallet, compared with 44 percent among the less frequent online shoppers,” said the report.