WASHINGTON, May 25, 2010 –The World Bank’s Board of Executive Directors today approved the Third Financial Sector Development Policy Loan for Egypt in the amount of US$ 500million.
The main objective ofthe operation is to support the Egyptian authorities in implementing theirsecond generation Financial Sector Reform Program (2009–2012), which aims atfurther developing an enabling environment for financial intermediation, andenhancing access to finance through strengthening the bank and non-bankfinancial sector.
"We are pleased to continue supporting Egypt's Financial Sector Reform Program which contributesto sustained economic growth, poverty reduction, and overall prosperity forEgypt. This program represents one of the most far-reaching and comprehensivereforms to have been launched in Egypt and in the Arab World," said A. David Craig, Country Director for Egypt,Yemen and Djibouti.
Egypt has made substantial progress in the development of its financial sector which led to afriendlier investment climate. Real gross domestic product (GDP) growthincreased from an average of 3.5 percent during FY01-04 to around 7percent between FY06 and FY08. An integral component of this comprehensivereform program was a financial sector reform program.
"Egypt was able to weather the recent global financial crisis due to the Central Bank of Egypt andthe Ministry of Investment successful implementation of the comprehensiveFinancial Sector Reform Program that led to the improvement of the performanceof the financial sector and the strengthening of the sector's regulatory andsupervisory authorities, as well as the financial institutionalinfrastructure," said Sahar Nasr, theWorld Bank's Task Team Leader.
"The second-generation financial sector reforms will result in a more efficient andsound financial system that will provide improved services to Egyptiancitizens, especially the rural low-income groups, as well as micro, small andmedium enterprises, through further enhancing their access to quality anddiversifies financial services, which will contribute to sustained growth inEgypt," she added.
Getting the financial system in Egypt to function more effectively and provide the full range offinancial services is a task that will be well rewarded with economic growthand reduced poverty. Access to financial services is an important factor in thereduction of poverty and inequality, and the improvement of welfare among lowerincome families.