The Effect of Microfinance Ecosystem on Financial Inclusion in Egypt

As of 2021, 28 percent of the Egyptians live below the poverty line and, according to the Central Bank of Egypt, 43.8 percent of Egyptians don’t have access to basic financial services (CBE, 2022). Egyptians who live below the poverty line and don’t have access to basic financial services can be covered through microfinance services, which face some barriers in Egypt, such as the legislative regulations that prevent microfinance institutions from deposit-taking.

The aim of this paper is to identify areas of improvement in the Egyptian microfinance ecosystem that can allow low-income people to be financially included. This is achieved by assessing the Egyptian market against the best practices of I-SIP theory, which considers three key factors: Stability, Integrity, and Protection.

This study emphasizes the significance of saving for individuals, by analyzing data of 10 nations, gathered from the databases of the World Bank's "Findex 2021" and the International Monetary Fund. The study spans a period of 14 years, from 2008 to 2021.