A project along the lines of the Grameen Bank is currently being established in Egypt under the auspices of Prince Talal Ibn Abdel-Aziz, president of the Arab Gulf Fund. Since the government at present dose not allow new banks to be set up in Egypt, an organisation called the Al Amal Company (Hope) was set up to implement the project in association with the Egyptian National Bank. Apart from providing some of the capital, the National Bank will assume banking responsibility and act as a fund treasurer for the project. This will include carrying out the credit activities on behalf of the company. “On the basis of the government’s promise, we are looking forward to transferring the Hope Company into the Hope Bank within two years,” Prince Talal told Al- Ahram Weelky.

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The authorised capital is LE200 million, while the issued capital should not be less than LE50 million. According to project chairman Abdel-Aziz Hegazi. LE29 million of the required LE50 million has already been secured. The main share holders are the Egyptian National Bank and Prince Talal. With LE10 million each; the other LE9 million is divided among two other Egyptian banks and individuals. Hegazi is optimistic the remaining LE21 million will be secured easily from new shareholders and donations from international organisations.

The idea for the Egyptian project was originated by Prince Talal in 1996. That year, a symposium, attended by politicians, economists and academics, was held to launch the idea. As a result, a preparatory committee of the Egypt Hope Project was set up, chaired by Hegazi, a former Egyptian prime minister.

The GB model has been the reference for the Hope Company since its inception. The main aims of the GB, which was established in 1976, are to offer banking facilities to the poor, eliminate their exploitation by moneylenders, help the poor achieve individual and collective self-reliance, and introduce the disadvantaged to the format of social organisation in a way that would enable them to understand, operate within and find socio-political and economic strength through mutual support. It has always been referred to as the bank for people who have no access to the conventional banking system.

“The GB is unique in that it has demonstrated that poverty can be removed quickly and directly by giving the poor access to credit and the means to utilise their own skills,” Imamus Sultan, deputy general manager of GB and the project’s consultant, told the Weekly. “Credit has powerful social and economic functions, as well as being a powerful social and economic weapon,” he added.

Hegazi has emphasised that the Egyptian project will rely heavily on the experience of Grameen Bank, which will then be applied in a local situation.

“A good understanding of the local culture is important to help us develop appropriate lending mechanisms,” he added.

Preparations for the Hope project are well under way and it is scheduled to begin providing credit within six months. “Meanwhile, initial estimates of the expected beneficiaries have been worked out,” said Prince Talal. The project appears to have prioritised the provision of credit to women. “The experience of Bangladesh has proved that women are very capable of utilising the credit and are serious about repaying the loans. We are very concerned about the situation of poor Arab women, especially those who are the head of the household. We are confident about their capabilities and that their access to credit would have a positive impact on the well-being of their families,” said Prince Talal. This has also raised the question of maintaining the balance between economic and social orientation. However, Prince Talal has affirmed that there will be no collateral. “Trust will be the principle in handing credit transactions since the poor have no collateral to offer,” the Prince said. The Egyptian government will not be a financial partner in the project, despite lending it its unconditional support. Instead, most of the money will be raised by the private sector. According to Prince Talal, the government’s moral support is more important than any financial contribution at this stage.

Egypt is the third Arab country to have introduced banking facilities along the line of the Grameen Bank. Lebanon and Yemen already have similar projects. “Our hope is to extend the experience to all other Arab countries,” said Prince Talal. “We will start with those who take the initiative to ask us to move in.”