Banks’ role in financing more sustainable economic activities

The Central Bank of Egypt issues guiding principles for sustainable financing

The Federation of Egyptian Banks forms the Sustainable Financing Committee as one of its permanent committees

Sustainable financing contributes to financial and banking stability. The sustainable development goals cannot be achieved without banks’ active role in financing more sustainable economic activities. The financial sector, including banks, fund managers, insurance companies, investors, and a wide range of supportive professional services should play a leading role in improving the climate.

In this regard, Egyptian banks, under the supervision of the Central Bank of Egypt (CBE), have taken positive steps toward financial sustainability and green economy. The Egyptian banks have prepared financial sustainability reports. At the same time, the Central Bank of Egypt issued guiding principles for sustainable financing, which included capacity building and necessary knowledge, as well as promoting sustainable financing and partnering with concerned stakeholders. This is in addition to managing climate change risks and applying sustainability principles to the bank’s internal activities, as well as preparing the required reports.

The CBE issued several initiatives aimed at achieving economic development and promoting sustainable financing by providing specific sums for banks to be used in granting clients with credit facilities under the umbrella of these initiatives at low-interest rates; due to its pivotal role in developing the national economy, providing youth with job opportunities, as well as reducing unemployment rates. This takes into account the social component of sustainable financing, as well as focusing on sectors such as the new and renewable energy sector, which takes into consideration the environmental factor.

The following are a number of related initiatives:

a. Small and Medium Enterprises initiative.

B. Industrial, agricultural, and contracting sector initiatives.

c. Financing Real estate initiative.

d. The replacement of dual-fuel vehicles and gas station initiatives.

Moreover; the following decisions have been made in order to achieve sustainable development goals:

a. Instructions to protect the rights of bank customers.

b. Exerting utmost efforts to achieve financial inclusion.

c. Issuing rules and regulations for digital services such as that of mobile phones and other digital payment tools.