Friday,20 October, 2017
Current issue | Issue 1252, (25 June - 1 July 2015)
Friday,20 October, 2017
Issue 1252, (25 June - 1 July 2015)

Ahram Weekly

Preparing for a rainy day

Niveen Wahish talks to the head of Egypt Post Essam Al-Sagheir about the group’s newly launched citizen accounts

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Al-Ahram Weekly

Abu Mahmoud, 40, is an informal worker who takes his tools every day and sits in a spot in Mohandessin waiting for someone to hire him for the day. He is ready to tear down walls, carry the demolished materials, or do any other odd job for some LE100 per day.

However, a couple of years ago he fell off a wooden ramp while he was carrying bricks and almost broke his back. He spent two months in bed and could have died. If he had done so, his family would have been left without their breadwinner.

A new product offered by the Egypt Post, the national post office, is now trying to help soften such blows for people who are not formally employed and do not have insurance coverage.

The new product, called a “citizen account” enables any employer or worker to open a savings account for his employees or himself with LE50. LE11 of the deposited money will go towards monthly payments on an insurance policy while the remaining LE39 will be savings that carry the highest interest rate the Egyptian Post Office offers, explains Essam Al-Sagheir, CEO of the Post Office, to Al-Ahram Weekly.

In the event that a worker dies because of an accident, his family will immediately receive LE20,000 under the new scheme. In the case of a natural death, his family will receive the same sum if he has had the account for at least six months.

The new product targets those who do not have insurance coverage, a large number of whom do dangerous jobs and do not have fixed sources of income, and it enables them to put aside some savings, Al-Sagheir adds.

Prime Minister Ibrahim Mehleb, who launched the programme earlier this week, invited all employers to open accounts for workers in order to provide them with security. He said the product was a tool that could help to achieve greater social justice.

Al-Sagheir told the Weekly that “the insurance coverage is possible because of a mass insurance scheme that makes premiums as low as LE11, or the cost of a packet of cigarettes.”

The new programme is intended to target 11.3 million people, nine million of them men and the remainder women, and it will be organised depending on what such people earn and if and when they work. It targets individuals of 18 to 59 years of age who do not have insurance coverage It also depends on the good will of employers who may be encouraged to open accounts for their employees rather than offer them formal insurance. “Covering employees by insurance schemes is more complicated,” says Al-Sagheir, as it means that the employers themselves have to be working in the formal sector and possess commercial registration.

This is often not the case, especially in businesses such as car repairs or in the case of families hiring domestic staff or cleaning ladies.

In the case of death, the family of the account holder would receive an insurance pay-out in addition to whatever has been saved in the account together with interest payments.

Alternatively, the account holder can choose to close the account and receive simply the sum saved in the account with the interest payments. A third option would be to receive the money upon reaching the age of 60 when the insurance coverage ends.

“It’s a great idea,” says Marwa Mustafa, a housewife who has always wanted to do something for the cleaning lady who has been coming to her house for five years.

According to Al-Sagheir, the programme will also attract more people to set up savings accounts. The Post Office has around 20 million holders of savings accounts, better known as savings booklets, “a large number of whom are not welcome in banks because they deposit small sums that would not cover a bank’s overheads,” he says.

In contrast, there are Post Office branches throughout the country that are easily accessible to all, he added. 

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