In continuation to the banking sector’s pivotal role, led by the Central Bank of Egypt (CBE), in achieving Sustainable Development Goals (SDGs) and Egypt’s Vision 2030, Egyptian banks strengthened their efforts towards advancing the sustainable finance field through the expansion of financial and banking services that integrate environmental and social elements.
In this regard, the CBE has intensified its initiatives to promote sustainable finance by encouraging banks to finance more sustainable economic activities and projects, including financing the establishment of renewable energy power plants and waste recycling projects, as well as financing micro, small, and medium-sized enterprises (MSMEs).
Additionally, the CBE has prompted banks to innovate products and services for citizens with low to middle incomes, and Persons with Disabilities (PWDs).
In alignment with Egypt’s strategy in sustainable development “Egypt Vision 2030” and the United Nations’ Sustainable Development Goals (SDGs), Egyptian Banks have innovated more than 24 products and financing programs within the environmental and social sectors, including energy efficiency, renewable energy, agriculture, healthcare, and digital transformation.
Moreover, around 31 banks availed products that have significantly supported the goal of fostering a “Competitive and Diversified Economy”, through supporting sustainable economic growth, enhancing the resilience and competitiveness of the economy, increasing employment rates and adequate job opportunities, and improving the business environment, as well as empowering entrepreneurial culture, and promoting financial inclusion. Furthermore, banks have introduced several financing programs aimed at strengthening the social equality.
In accordance with the aforementioned, Egyptian banks have launched financing products that have substantially contributed in achieving 12 of the United Nations’ SDGs, such as offering targeted financial inclusion accounts for the most vulnerable groups, as well as financing schemes for farmers and smallholders, which have enhanced the quality of life of marginalized groups. Banks have also introduced specialized products to address the needs of PWDs, in accordance with the UN’s goal for reducing inequalities.
Additionally, banks have rolled out programs to provide funding for educational tuition fees, aligning with the UN’s goal of quality education. To address the financial needs of women, banks have created customized products and financing programs for women, including financial and non-financial services to women entrepreneurs to contribute in achieving gender equality goal.
Driven by the pursuit of clean energy and climate action goals, banks have launched a number of products, including green financing programs and green bonds.
It is important to note that the banking sector has shown its dedication to implementing Principles for Responsible Banking issued by the United Nations Environment Programme Finance Initiative (UNEP FI), where the compliance rate of the banking sector reached 75% of the sector’s total portfolio. These Principles aim to establish a sustainable banking system through the banks’ commitment to aligning their strategies with the SDGs, enhancing positive impacts on the environment and society, as well as mitigating risks. They also promote responsible customer engagement to foster sustainability initiatives and stimulate economic activities that ensure prosperity for both current and future generations, while advancing society’s development goals.
In recognition of the CBE’s commitment to sustainable finance, the Sustainable Banking and Finance Network (SBFN) – a member of the International Finance Corporation (IFC), part of the World Bank Group – has upgraded Egypt’s rating in 2024 from “Developing” to “Advancing” in its annual report. This report benchmarks the country’s progress and outlines member institutions’ efforts to develop and implement national and regional sustainable finance frameworks, in line with leading international trends and best practices. Notably, Egypt’s rating has been upgraded four times since joining SBFN.
It is worth mentioning that SBFN is one of the most prominent international platforms specialized in sustainable finance, as it represents 72 countries through 96 regulatory and governmental entities from emerging markets. The network promotes the integration of sustainability principles into financial systems towards achieving the national goals and priorities, in addition to enhancing the stability of the banking sectors.
The Egyptian banking sector’s commitment to the Principles of Sustainable Finance is a vital step towards achieving the goals of both national and international sustainable development. This contributes to building a more diversified and sustainable economy that addresses the needs of both current and future generations.
