CBE boosting e-payment solutions

By Ahmed Kamel

The Central Bank of Egypt (CBE) is stepping up measures to boost e-payment solutions. To this end, the CBE has canceled fees for microbusinesses and small and medium-sized enterprises to activate electronic collection services via the Internet (e-commerce) until the end of June 2021.

The move is part of efforts to implement a strategy laid out by the National Council for Payments (NCP), which is headed by the President Abdel Fattah El Sisi.

The objective is to speed up a smooth transformation into a digital economy as well as the expansion of e-payment systems.

In 2017, President El Sisi launched the NCP to boost the nation’s cashless and e-payment solutions.

RamyAbul Naga, CBE Deputy Governor, said the initiative reflects the CBE’s keenness to increase the number of companies using electronic collection services via the Internet through websites or mobile phone applications.

He noted that electronic transactions via the Internet surged by 100 per cent on the back of the pandemic. There has been a silver lining in the cloud for cashless transactions on the back of the Covid-19 pandemic with the number of e-wallets rising by leaps and bounds since March 2020.

The CBE launched in September an e-payment initiative to boost digital payment solutions to minimize dependence on cash in daily transactions.

The CBE is seeking to reduce the financial burdens on companies by exempting them expenses to activate the electronic collection service via the Internet.  The points of sales, where e-payment solutions are accepted, rose to 500,000, up from 200,000, across the country.

The easiest cashless payment solution is prepaid cards as consumers directly buy these cards without the need to open a bank account. Prepaid cards are the world’s most rapidly growing payment instrument among the unbanked and underbanked.

CBE amends financing regulations

The CBEhas amended bank financing regulations for real estate development companies, which operate in the field of building and selling housing units. The regulations have been in place since October 2007.

The new amendments allow banks to fund joint projects between developers and government authorities or with private companies. The CBE has obligated the real estate firms to open a debit current account to disburse the financing provided by the bank.

According to the new amendments, each financed project will have two bank accounts: one for the disbursement of the bank financing, and another for all proceeds from the sale of housing units such as down payments, installments, delay fines, commissions.

The balances of the two accounts are used only for spending on the project or paying off the debts of the current account.

The CBE has added a new clause that allows banks to finance the land installments owed by their customers with existing credit facilities from real estate development companies operating in the field of building and selling housing units.

In another development, the CBE has agreed with the Ministry of Finance to amend some provisions of an initiative to support the tourism sector, which was launched in June 2020.

The new amendment set a cap of LE30 millionfor each customer and LE40 million for one customer  along with affiliated parties with for paying salaries and wages of workers in the tourism sectorpaid under the initiative.

Young people can trade on equities

The Financial Regulatory Authority (FRA) has allowed, for the first time, young people aged16-21 to invest in equities listed on Egyptian Exchange.

In the past, young people under the age of 21 could not invest directly in stocks. Only fathers or grandfathers (on the fathers’ side) could invest for young people under 21 years old.

The FRA’s decree will enable the young people aged 16-21to apply for coding on the stock exchange. The coding means that an investor’s data is registered in the database of the stock exchange via a brokerage firmselected by the investor.

The move is aimed at increasing the number of investors on the Egyptian Exchange and scaling up volumes.

The Egyptian Exchange lured 28,000 new investors in 2020, according to market data. The new investors comprised 24,907 Egyptian nationals, 643 Arabs and 1,337 non-Arabs.

Natural and legal persons totaled 26,900 and 955 respectively, market data showed.

Siula Fund lures subscriptions worth LE1b

Subscription for money market fund “Siula Fund”, launched by NI Capital Holding, closed last week almost one month ahead of the previously set date, at LE1 billion, Minister of Planning and Economic DevelopmentHala el-Saeed has said.

The nominal price was LE10 per share.

The subscription date was set to close on March 10. NI Capital’s money market fund is the company’s maiden fund, which is in the Egyptian poundwith a daily cumulative return.

Minister el-Saeed praised NI Capital, the investment arm of the National Investment Bank, for launching the fund, citing the company’s excellence in the field of non-banking financial services.

She noted that this type of products would lure more investments into treasury bills and government bonds, which would stimulate the nation’s economic development.

The fund was oversubscribed at a 21 bid-to-cover ratio. The new fund is designed to invest in highly liquid, short-term instruments and transferable securities.

It aims to yield a cumulative daily return at a low risk due to the instruments invested in as it maintains a high degree of liquidity that allows the investor to buy and redeem daily starting as of February 17.

NI Capital’s fund is designed to invest in treasury bills, bank deposits andcertificates of deposits (CDs).

Beware of high speculation!

Despite easing world gold prices as investors have been heavily buying into cryptocurrencies, especially Bitcoin, which rose to an all-time high above $52,000 last week.

However, the drastic volatility of these digital assets may be tragic, casting a shadow on this booming business. There has been high speculation driven by US tycoon Elon Musk.

According to a study entitled “Virtual Currencies and Beyond: Initial Considerations” carried out by the International Monetary Fund (IMF), virtual currencies are issued without the involvement or backing of a state.

“Some virtual currency schemes make use of ‘distributed ledger’ technologies that provide complete and secure transaction records without using a central registry. These technologies therefore allow for direct peer-to-peer transactions and eliminate the need for central clearinghouses. It is therefore not surprising that private sector interest in these new technologies has been growing, and that attention from regulators and policymakers has not been far behind,” the study said.