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> Posted by Allyse McGrath, Senior Associate, CFI

Readers of the 2015 Global Microscope, which spotlights the quality of the policy environment for financial inclusion, often focus on the countries at the top of the pack. However, some of the largest improvements in this year’s report are happening towards the bottom of the ranks. This trend appears on a regional scale, with the Middle East and North Africa, the region with the collective lowest scores, showing the most improved scores in this year’s issue of the Global Microscope. In this region, Egypt serves as an example of a country making huge strides even though it’s not among the top 10 countries. In fact, it scores among the very lowest handful of countries.

Up two spots from 53 to 51 out of 55 total markets this year, Egypt improved its score in 7 of the 12 Microscope indicators. The 8-point jump overall can be attributed to many factors, most notably the government’s introduction of a new regulation which broadens financial supervisory to a burgeoning microfinance sector and its welcoming of new electronic payments experiments.

In November 2014, the Egyptian Government enacted  Law no. 141, more commonly known as the “Microfinance Law”, which created provisions for regulating MFIs in the country, previously excluded from the legal framework. This law expanded the reach of the Egyptian Finance Supervisory Authority (EFSA) which now has control over issuing licenses to microfinance institutions in Egypt. After the law’s issuance in 2014, the number of MFIs in Egypt rose from 400 to 640. By the end of 2015, EFSA reported that it had issued 253 licenses. The law which is aimed at ensuring efficiency, transparency, and risk management also includes a list of “Executive Decrees” by which licensed institutions must abide.

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