The microfinance activity continued its growth, with financing balances reaching 21.61 billion pounds, and the number of microfinance beneficiaries increased to 3.256 million beneficiaries by the end of April of 2021. Commercial activity topped the balances and numbers of microfinance beneficiaries, with a market share of 61.43%, 65.23%. This growth came despite the coronavirus pandemic, thanks to 6 measures taken by the Financial Supervisory Authority, namely:
1- Facilitations for regular customers
Reducing the cost of financing for regular customers.
The agreement of microfinance agencies with insurance companies that the entity, on behalf of its clients, pays the value of the mandatory micro-insurance premiums against the risks of death and permanent total disability until conditions improve.
Providing free financial services, such as bearing the burden of the expenses of various electronic financial transactions that take place with other electronic payment entities other than banks, and/or field collection expenses.
Exempting clients from the commission for the accelerated payment of debts existing in its history.
Reducing the value of administrative expenses to renew existing finances as of its date.
2- Facilitating dealing with affected customers
Reducing/carrying over the value of the installments owed from clients by the equivalent of 50% of the value of each installment, allowing the financing bodies to cover the costs and burdens of financing obtained by the microfinance agencies from various sources of financing such as banks, the Medium, Small and Micro Enterprise Development Agency.
- Provided that the reduction continues for the period that the entity deems appropriate for each case separately, and in no less than monthly installments (March and April 2020).
3- Reviewing the pricing policy for new financings, taking into account the recent deposit and lending interest rate reduction issued by the Central Bank of Egypt on March 16, 2020, as well as any other advantages that microfinance agencies may obtain during the coming period from the facilities provided by the Central Bank of Egypt in Paying credit dues to institutional bank customers with the approval of that review by the board of directors / trustees of the financing entity within a period of 3 weeks at most from its date.
4- Forming one or more specialized committees at the level of the microfinance donor to assess the current exceptional circumstances of clients with irregular situations, especially the owners of micro-enterprises in the economic sectors most affected by the crisis, and follow up on the application of the principles of customer protection in terms of good treatment and respect for them, as well as Estimating appropriate treatment solutions according to what is provided by the mechanisms and principles of responsible financing, such as deferring installments, rescheduling, granting grace periods, exemption from delay fines, debt write-off, and the commitment of each of the microfinance companies, associations and private institutions of categories (A,B) to provide the authority at the end of Every Thursday, he worked on the portfolio's position in terms of the financing at risk, according to the principles of calculating the provisions approved by the authority, with precision, explaining the geographical areas with the largest percentage of arrears.
5- Demanding funding agencies to observe the necessary flexibility in activating the scheduling mechanism for irregular financing at an appropriate time to prevent default and according to the study on a case by case basis, and to allow for appropriate payment of the customer’s current capacity.
6- Each entity adopts a work continuity and emergency plan to achieve effective management of its human and material resources in the face of the current circumstances, and is based on spreading adequate awareness among workers and customers by following several health prevention measures, and assigning the entity’s risk officer to follow up and prepare a weekly report on its results to be presented to the Chairman/Treasurers or Managing Director/Financing Activity Manager; To take the necessary corrective measures first-hand and rely on the remote follow-up mechanism for the performance of the fund officials’ portfolio through phone calls with customers and text messages on mobile phones, and the use of field follow-up in the necessary cases and according to the circumstances estimated by each party, and work on making available the use of electronic tools and means In processing daily operations and reducing the circulation of documents within the entity and its branches whenever possible.
Microfinance means all financing for economic, production, service or commercial purposes in the fields and at the value determined by the Board of Directors of the Financial Supervisory Authority. Microfinance is considered a major means of encouraging the participation of low-income groups in economic activity, as access to various financing means for individuals and business owners Microfinance contributes to reducing unemployment and contributing to improving the incomes of the poorest families, and has a positive impact on increasing the volume of investment and employment in the national economy.
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