Banks' financing for services sector increases by EGP90.8 bn during H1-2023

First Bank

10/29/2023 9:50:00 AM

The banks, excluding CBE, boosted their financing for the services sector in the first half of the current year. Loans to this sector jumped by about 13.80%, reaching EGP748.625 bn by the end of June 2023, compared to EGP 657.830 bn by the end of 2022, an increase of EGP90.795 bn.

The services sector serves as a key driver for both advanced and developing economies, contributing over 60% to the global GDP.

It also provides employment opportunities for approximately 50% of the global workforce. In Egypt, the services sector has witnessed significant growth, surpassing 50% of the total GDP, reaching over $ 200 bn in 2021 compared to $ 101 bn in 2010, making it a major source of employment opportunities, employing more than 50% of the workforce in Egypt.

The latest statistical bulletin from the Central Bank of Egypt revealed a 11.44% growth in banks' loans to the services sector in the local currency, totaling EGP588.077 bn by the end of June 2023, compared to EGP 527.725 bn by the end of 2022, with an increase of EGP60.352 bn.

This significant increase in financing for the services sector in the local currency is a result of the banks' increase in loans to the private services sector in the local currency, reaching EGP512.491 bn by the end of June 2023, compared to EGP446.286 bn by the end of 2022, with a growth rate of 14.83% and an increase of EGP66.205 bn.

Loans in foreign currencies also increased by about 23.40%, reaching the equivalent of EGP160.548 bn by the end of the second quarter of 2023, compared to the equivalent of EGP130.105 bn by the end of 2022, with an increase of EGP 30.443 bn.

This significant jump in the services sector in foreign currencies is due to the increase in banks' loans to the private services sector in foreign currencies by about 23.96%, totaling the equivalent of EGP134.417 bn by the end of the first half of 2023, compared to the equivalent of EGP108.435 bn by the end of 2022, with an increase of EGP25.982 bn.