Great growth ahead
"BANKING penetration in Egypt is low, but it has a great potential to grow," revealed a banking survey recently conducted by Synovate Egypt, a leading market research firm, reports Sherine Nasr
A total sample of 1,131 Egyptians representing the upper and middle-upper class in Greater Cairo, Alexandria and the Red Sea areas were asked questions related to confidence in the banking sector, local and foreign bank preferences, Islamic banking, and the use of credit cards, among other things.
Notably, only 52 per cent of those surveyed report that they deal with banks; 26 per cent do not use banks due to lack of funds, and 17 per cent don't deal with banks because it is considered usury, which is forbidden in Islamic culture.
"Although banking services have not penetrated enough, the banking sector has become more competitive over the past few years as a result of the government's financial reform programme," said Tamer El-Naggar, managing director of Synovate North Africa, adding that the traditional role of banks has shifted from servicing corporate needs to reaching out to consumers at large with customised retail products.
The study revealed that Egyptians prefer dealing with local banks due to traditional beliefs that they are safer. "[Some] 97 per cent consider trust as the main criteria to dealing with a specific bank while efficient customer service ranked second at 89 per cent. The bank branch network was the third factor to 84 per cent of the surveyed sample," the study underlined.
According to the study, current accounts topped the list of banking products, followed by saving accounts and credit cards.
Although 46 per cent of the surveyed sample is aware of Internet banking, only two per cent of Egyptians who deal with banks use the service.
"Internet banking has great growth potentials, despite concerns about online safety and low rates of computer literacy," said Mohamed Kamal, business development director for Synovate North Africa.
While recent reports have revealed that over 2.5 million credit cards are currently in use in Egypt, Synovate study underlined that 66 per cent of those surveyed have credit cards, which are mainly used for shopping, paying bills, travelling abroad and Internet shopping at 89, 48, 23, five per cent respectively.
"Credit cards companies have been active in creating awareness and offering incentives to support their growth expansion plans. The number of credit cards users is expected to reach 10 million by 2010," said Kamal.