Banks’ loans to services sector jump by EGP 148 bn in 2023

The loans of Banks operating in the Egyptian banking market (other than the Central Bank of Egypt) have seen significant progress in the services sector over the past year, jumping by EGP 148 bn, with an increase rate of 22.49% in 2023.

According to the latest data from the Central Bank of Egypt, banks’ loans provided to the service sector recorded EGP 805.8 bn by the end of 2023, compared to EGP 657.8 bn by the end of 2022.

Banks’ loans balances for the services sector in local currency rose by 22.72% over the past year, reaching EGP 647.6 bn by the end of 2023, compared to EGP 527.7 bn by the end of 2022, with an increase of EGP 119.9 bn.

This significant surge of loans in local currency for the service sector resulted from an increase in banks' loans to the private service sector in local currency to EGP 576.5 bn by the end of 2023, from EGP 446.3 bn by the end of 2022, with a growth of 29.19% and an increase of EGP 130.3 bn.

Banks’ loans balances for the services sector rose to the equivalent of EGP 158.2 bn by the end of last year, compared to EGP 130.1 bn by the end of 2022, with a growth of 21.57% and an increase of EGP 28.1 bn.

The significant leap achieved by the service sector in foreign currencies was due to an increase in banks' loans to the private sector in foreign currency by 24.55% over the past year, reaching the equivalent of EGP 135.1 bn by the end of 2023, compared to EGP 108.4 bn by the end of 2022.

It should be noted that the services sector is one of the most important economic sectors, as it is a major driver of both developed and developing economies, owing to the fact that it is the largest contributor to gross domestic product (GDP) at more than 60% of global GDP, and that proportion has risen to more than 70% of the GDP of high-income economies by 2021. This sector is experiencing increasing growth in Egypt's economy, exceeding 50% of GDP. Its value reached more than $200 bn in 2021 compared to $101 bn in 2010, doubling the value of the service sector over the past decade. With the rise in the value of the Egyptian economy's services sector and the diversification of its sectors has become a source of job creation, with more than 50% of total employees in Egypt.

In this sector there are many opportunities in service activities that can double the export of Egyptian services, most notably banking services, where the Egyptian banking sector has made significant progress in implementing the "Basel 1,2, 3" banking control decisions of banks operating in Egypt; Thus, Egyptian banks have great opportunities to spread in Arab and African foreign markets and raise their share in regional and development banks.

Shipping and logistics services also have many opportunities, especially since Egypt is one of the countries that plays an important role in shipping services, because of its unique geographical location and possession of a global shipping corridor. "Suez Canal", which qualifies it to play an important and leading role in the field of shipping services, ports and logistics, especially in the Arab and African region and the countries bordering Mediterranean sea and Red sea, especially since Egypt has a variety of sea ports between specialized (38 ports) and commercial (18 ports) on Mediterranean sea and Red sea.