Agricultural Bank of Egypt (ABE) is considered to be one of the biggest agricultural banks in the Arab world and Middle East as well as one of the most important development institutions for agricultural activity in Egypt.
It is considered to be a village bank covering all of the Egyptian country.
The bank business relies mainly on special underwriting system for agriculture loans. It has 1200+ branches that are scattered across rural areas of Egypt and that provide special loan types and services to the agricultural activities segment.
The bank is constantly working to develop its performance, diversify existing services and creating new services to cope with the requirements of all the investors. The bank also provides financial services for all rural and urban clients.
‘’The Agricultural Bank of Egypt will be one of the largest banks in the country within 3-4 years’’, predicted Tarek Amer, The Central Bank of Egypt governor said; Perhaps these words explain why Amer’ has chosen Alaa Farouk to be Chairman of the state-owned bank as of February 2020.
Under Alaa Farouk leadership, the bank new strategy is based on several axes; including mainly the technological development of all its sectors through working on modernising the technological infrastructure as well as creating a database that connects all its branches.
That’s why the bank has allocated investments of $ 20 million to develop the technological and financial systems, of which $ 10 million has been assigned to establish an information center.
ABE main performance indicators
The bank’s credits portfolio has witnessed a record increase registering 44 billion pounds in November 2020 compared to approximately 32 billion nine months earlier bank jumping 37.5 percent.
In addition, the bank has succeeded in attracting about 500 thousand customers reaching 3.5 million in nine months while aiming to reach a client base reaching 30 million customers and increasing the branches to 2000 within five months.
In addition, the bank will increase the client base through new banking services and various banking products, with the aim of reaching the needs of all the customers segments including financing programs for small and micro enterprises, while expanding in the issuance of prepaid cards used in payment services.
Agricultural Bank of Egypt has managed to issue 1.8 million prepaid cards (Meeza). The move comes in line with the National Council for Payments’ strategy to reduce cash transactions in the local market, and attract new segments of customers to the banking system.
Agricultural Bank of Egypt and Financial Inclusion
The bank is planning to comply with the financial inclusion strategy, mandated by Egyptian Monetary authorities, and transform their society into a cashless one.
The most important requirement for the bank was the capability of the awarded system to support their agriculture micro-financing strategy by introducing the concept of Farmer payment card
The main function of the Farmer card is to create a mechanism by which the credit facilities granted to Farmers are controlled so that Farmers’ expenditures are restricted to merchants of agriculture business and services.
The farmer card will become the first building block in a more ultimate Value chain that associates Farmers with Farming products trade and industry.
Furthermore, the Farmer Card comes as part of its cooperation with the Ministry of Agriculture and Land Reclamation, to automate the process of agricultural lands possession.
The bank has already delivered about 685,000 Farmer Cards in the governorates of Sharqeya, Gharbeya, Beheira, Port Said, Assiut, and Sohag.
These benefits include allowing new customers to open current and saving accounts for free, without any administrative fees or a minimum amount in the account.
The bank also pursues a strategy aimed at expanding electronic payments, under the National Council for Payments’ and the Central Bank of Egypt’s (CBE) directions to support financial inclusion in Egypt.
ABE aims to install a wide network of electronic points of sale (POS) at establishments and companies operating in the agricultural sector. This will see an estimated 25,000 POS terminals installed nationwide in the first stage.
Furthermore, the bank is preparing to issue the first mobile wallet for the agricultural sector. This will provide financial services to a large segment of the informal sector in the Egyptian countryside that do not have bank accounts.
The bank’s role in achieving rural development
The bank launched a microfinance programme as the latest in rural development services and financing programmes it provides. It will serve a broad spectrum of citizens in all Egyptian villages, especially the neediest and low-income groups.
The new financing programme targets owners of simple handicrafts and small merchants in the countryside, in addition to rural women. It has been put in place to empower them economically, and encourage them to produce by financing projects to raise birds, poultry, goats and sheep at home, in addition to household industries, handicrafts, dairy products, and small business.
The new financing programme also provides micro-loans of EGP 2,000 – EGP 10,000, without fees and with simple procedures and large facilities.
ABE endeavours to provide all banking and financing services to various groups of society in order to achieve financial inclusion.
About ABE
The Agricultural Bank of Egypt (ABE) was founded in 1930, with the objective of developing Egypt’s agricultural sector. In the ensuing years the bank grew rapidly to become the largest financial institution in the Arab world serving the specific interests of the farming community.
Today ABE is a full financial and banking institution and its operations are carried out through a network that encompasses an administrative head office in Cairo, and about 1200 district branches and village banks. The bank currently employs approximately 17,000 staff and serves over 3 to 4 million farmers and other rural dwellers. ABE is wholly-owned by the Egyptian government and is answerable to the Central Bank of Egypt.
